#futureready Future ready for smart choices I N T E G R A T E D A N N U A L R E P O R T 2 0 1 9 - 2 0 CONTENTS Solar Power Plant in Mithapur, Gujarat Ultra Mega Power Project (based on super critical technology) implemented at Mundra in Gujarat OVERVIEW Theme Introduction Highlights FY20 About this Report Introducing Our Capitals 2 3 4 5 Introducing The Tata Power Company Limited CEO and MD's Message Business at a Glance Our National Footprint Key Milestones Corporate Governance 8 10 12 14 16 OUR EMPHASIS ON VALUE OUR VALUE‑CREATION PARADIGM How do we create value? Value-creation Model Our Strategy Stakeholder Engagement Materiality Tata Power's Commitment to UNSDG Risk Management Response to COVID-19 20 22 24 26 30 32 36 Capital-wise performance review Manufactured Capital Intellectual Capital Human Capital Social and Relationship Capital Natural Capital Financial Capital GRI Content Index Integrated Report - Annexures 40 52 58 70 98 114 120 128 STATUTORY REPORTS FINANCIAL STATEMENTS Board's Report Management Discussion and Analysis Report on Corporate Governance Business Responsibility Report 130 179 200 Standalone Financial Statements Consolidated Financial Statements 232 Notice Independent Assurance Statement Glossary 238 333 469 483 485 Developing assets to create long-term value for our stakeholders Our social responsibility Addressing the needs and aspirations of our stakeholders Future ready for smart choices Energy is at the core of a nation's prosperity. It powers aspirations, propels society and fast forwards development in its true sense. Much like energy itself, its generation and consumption also are increasingly becoming more dynamic. Today, the world over, the conversation around energy is being shaped by the growing movement for sustainability. The Tata Power Company Limited (Tata Power), India’s largest integrated power company, is shaping this drive for India’s power industry. Well established across the power value chain, we are cognisant of the energy needs of today and tomorrow. To this effect, we are establishing infrastructure and deploying resources that can mainstream smarter and sustainable energy, consistently powering the lives of our consumers. Highlights FY20 0.681 tCO2e/MWh ~10.3 LAKH Carbon intensity achieved Trees planted under the ‘Tree Mittra’ initiative 3,531 CKM Transmission 1.95 LAKH Smart Meters installed by TPDDL 61% Increase in net cash flow from operations in FY20 from FY19 13% Increase in operating profit from FY19 to FY20 4,27,420 HRS Of training provided to employees 11% Of our workforce comprises women E N V I R O N M E N T 2,600 Approximate number of trees saved through recycled paper billing in Mumbai distribution O P E R AT I O N A L 3,883 MW Clean and green energy capacity F I N A N C I A L 5.2 Net Debt/ EBIDTA ratio in FY20, an improvement from 6.2 in FY19 P E O P L E 30 Senior executives undertook the Senior Leaders’ Development Program S O C I A L 8,700 2 Energy efficient appliances provided more than 6,000 MWh of energy saving in Mumbai distribution Villages under the CSR outreach as well as 220 urban clusters 348 27.1 LAKH Total beneficiaries of our CSR activities Future ready for smart choices 3 3 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsThe Tata Power Company Limited Integrated Annual Report 2019‑20Future ready for smart choices About this report We, at The Tata Power Company Limited (Tata Power), are pleased to present our first Integrated Report 2019-20, prepared in accordance with the International Integrated Reporting Council (IIRC) -Framework. Stepping forward from our Annual Report 2018-19, the report aims to communicate our financial and non-financial information to our stakeholders, underlying the importance of our strategy towards value creation. With our strong commitment to sustainable innovation and energy transition, we continue to work towards implementing our vision of building a sustainable future. Integrated Report 2019-20 Frameworks referred Our is guided by the principles of the Framework. The content of the report is in accordance with the Global Reporting Initiative (GRI) standards: Core option. Linkages to the National Voluntary Guidelines (NVG) have been provided on Social, Environmental and Economic responsibilities of the business as well as the United Nations Sustainable Development Goals (UNSDGs) and the United Nations Global Compact (UNGC) Principles. The financial and statutory information in this report is in accordance with the requirements of the Companies Act, 2013, Indian Accounting Standards, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Secretarial Standards. Our approach to Integrated Reporting Our Integrated Report showcases our performance for FY20 in the context of our enabling environment, value creation process and strategic intent. The initial section of this report introduces the reader to the organisation’s business model, which clearly highlights how business inputs are transformed into value for each stakeholder group. This model also provides an understanding of how the Company’s vision and strategy are actualised into business outcomes. To further align our strategy to diverse stakeholder expectations and enhance relevance of the contents of this report, we conducted a Stakeholder Engagement and Materiality Assessment (SEMA). The main objective of this exercise was to understand the key issues that concern each stakeholder group. The outputs from a series of stakeholder interactions were overlaid to arrive at a list of 'material topics' or focus areas. These 'material topics' define the contours of this report. Further, the identified material topics have been categorised under the six capitals. Through these capitals, we draw emphasis on our approach to creating sustainable value. Report boundary and scope This report covers the business activities of Tata Power and It covers all our businesses of Renewables, all Distribution, Conventional its subsidiaries. Transmission Generation, and Next Gen Power Solutions, Trading as well as our Services Business for FY20 (1st April 2019 to 31st March 2020). Our detailed ownership structure has been given on page 16 of this report. We have not made any material restatement in this report and we follow an annual reporting cycle. Responsibility statement Our Board acknowledges the accountability for the integrity and completeness of this report and its contents. We have also ensured collective responsibility for the preparation and presentation of this report in accordance with the International Integrated Reporting Council (IIRC) - Framework. Assurance Non-financial information in this report has been independently assured by Ernst & Young Associates LLP (EY). The statement from the assurance provider (Independent Assurance Statement) can be found on page 483. The financial audit has been conducted by M/s. S R B C & CO. LLP (SRBC). Feedback We encourage you to share your feedback and insights on this report to enable us to strengthen our future reporting initiatives. Your suggestions may be communicated to tatapower@tatapower.com Forward-looking statements Certain elements of this report contain forward-looking statements. These may be typically identified by terminology used, such as ‘believes’, ‘expects’, ‘may’, ‘will’, ‘could’, ‘should’, ‘intends’, ‘estimates’, ‘plans’, ‘assumes’, and ‘anticipates’, or negative variations. These forward-looking statements are subject to particular risks and opportunities that could be beyond the Company’s control or currently based on the Company’s beliefs and assumptions of future events. There could be a possibility of the Company’s performance differing from expected outcomes and performance implied in this report. With a varied range of risks and opportunities facing the Company, no assurance can be provided for future results to be achieved as the actual results may differ materially for the Company and its subsidiaries. Introducing our capitals Our resources and relationships M A N U FAC T U R E D C A PI TA L I N T E L L E C T UA L C A PI TA L H U M A N C A PI TA L Our Company’s assets that are available for organisational use and its business activities with a focus on growth in renewable and other energy-efficient new business opportunities. value intangible and Our knowledge-based assets. This is seen in terms of our strategic protocols and procedures. includes our Our workforce, which employees’ knowledge and experience, and our to support an innovative work environment. initiatives Page 40 Page 52 Page 58 S O C I A L A N D R E L AT I O N S H I P C A PI TA L N AT U R A L C A PI TA L FI N A N C I A L C A PI TA L Our relationships with our community, institutions and inclusive of our key initiatives the collective to ensure well-being of our society at large. responsible Our environmental stewardship culture as well as key initiatives to foster a balanced approach through use of renewable and non- renewable resources. The funds utilised by our Company towards core business activities and our ability to create valued outcomes. Page 70 Page 98 Page 114 4 5 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsThe Tata Power Company Limited Integrated Annual Report 2019‑20Future ready for smart choices Introducing Tata Power 8 CEO and MD's message 10 Business at a glance 12 Our national footprint 14 Key milestones 16 Corporate governance Thermal Power Plant, Mundra CEO & MD’s message Raising the bar in sustainable energy Dear Readers, It gives me immense pleasure to introduce to you our maiden Integrated Report 2019-20. “Clean, cheap and abundant power is one of the basic ingredients for the economic progress of a city, state or country.” Almost a century before “sustainability” gained recognition as a subject, our Founder, Mr. Jamsetji Tata, gave this visionary message to the world. Tata Power is proudly committed to take that message as its guiding philosophy and support our country’s energy independence and sustainability. As a pioneer in technology adoption, our journey over a century has been a fascinating saga of revolutionary initiatives and responsible business practices. In our quest to deliver sustainable energy, we have been expanding our operational footprint nationwide and globally, setting new benchmarks for operational efficiencies, in global resources and redefining paradigms. Our focus on building long- lasting and trusted relationships with our customers, partners, employees and other stakeholders, and the legacy of caring for our communities, remains the bedrock of our long-term sustenance. We aim to energise consumer lifestyles by providing sustainable power. investing As we strive to lead the reform process for sustainable power, we are also committed to safeguarding the environment for future generations and developing our business in a way that adds value to the local communities. We plan to set higher benchmarks in terms of development standards, and in the implementation of cutting-edge, eco-friendly technologies and processes of energy management. Our commitment to sustainable supply of electric power has enabled us to be among the leaders in each sector of our value chain, including solar rooftop and value-added services. We have continued our migration towards renewable energy projects and, today, 30% of our total generation (domestic and international) comes from clean and green sources. We are poised to grow multi- fold on the back of latest business integrated solutions, focusing on mobility and lifestyle and powering emerging technologies for smart customers. This year, we have taken significant strides towards achieving our key goals and targets. We have been awarded the Letter of Intent by Odisha Electricity Regulatory Commission and selected as the successful bidder to own the licence for the distribution and retail supply of electricity in Odisha’s five circles that constitute the Central Electricity Supply Utility of Odisha. National Thermal Power Corporation Limited (NTPC) has awarded us a 250 MW solar project under the Central Public Sector Undertaking (CPSU) scheme of ₹ 1,505 crore. It is our biggest single order from a third party so far and consolidates our commitment to the “Make in India” mission. It has also taken Tata Power Solar’s order book to around 1,500 MW with value of approximately C 7,500 crore. This underscores our competitive and quality offering as a leading Solar EPC player in the country, achieving leadership position among utility scale, rooftop solar and solar pump business. Renascent Power Ventures Private Limited (Renascent), a 100% subsidiary of Resurgent Power Ventures Pte. Limited (Resurgent), completed the acquisition of 75.01% Equity ownership in Prayagraj Power Generation Company Limited (PPGCL). This has augmented our generation capacity by 1,980 MW. However, this is likely to be amongst the last investments in coal-based power plants as we turn our sights completely towards cleaner energy. It is noteworthy that reviving the existing thermal power plants and augmenting their efficiency marginally reduces the carbon footprint of existing capacities. With our extensive expertise and deep knowledge of the sector, Tata Power aims to transform the Indian power sector, particularly in our Distribution service. A variety of our service offerings has culminated into 26.2 lakh satisfied customers. We have set up a new subsidiary – TP Renewable Microgrid Limited (TPRML), in partnership with the Rockefeller Foundation, to become the world’s largest microgrid developer and operator. The aim is to provide access to affordable, clean and reliable power supply and also enable rural entrepreneurs to generate economic wealth and help eradicate energy poverty. TPRML has test charged 18 microgrids so far, while 25 more microgrids are in an advanced stage of project execution. Further, a pipeline of 30 projects has been created in Uttar Pradesh and Bihar. Our cash flow from operations, on a consolidated basis, has increased by 61% this financial year from FY19 due to prudent working capital management. There has been an increase in operating profit by 13% due to optimisation of operating costs across Tata Power and its subsidiaries. This has resulted in higher realisation of cash in hand as on 31st March 2020. We are proud to be associated with Jaguar Land Rover India Limited (JLR India) for end-to-end charging solutions for its range of electrified vehicles to be launched in India. As India’s leading integrated player in the EV charging space, we will provide JLR India’s EV customers with easy, universal and seamless charging experience at their homes, offices and public places. This partnership is also an endorsement of their faith in us and our ability to deal with the electrified range of vehicles that JLR will bring in India. Club Enerji, our nationwide resource and energy conservation initiative with a strategic focus on nation-building, sensitised over 26.4 million people while saving more than 31.8 million units of energy across seven cities – New Delhi, Mumbai, Pune, Ahmedabad, Bengaluru, Kolkata and Ajmer since 2007. The initiative also reached out to its digital audiences through its website, social media handles and an online module themed “Save water”. During the current financial year, the Company initiated four fresh campaigns, including 'I have the Power', 'I Live Simply', '#SwitchOff2SwitchOn' and 'I Can' to further the success of Club Enerji among the youth of India. These campaigns were also promoted on popular social media platforms like Facebook, Instagram etc., and managed to reach a large number of young audiences. The Club now has created 3.6 lakh Energy Champions along with 4.1 lakh Energy Ambassadors across the country since its inception, reaching 533 schools in the process. We believe that inculcating the value of sustainability and a broad understanding of our dependencies on scarce resources must start early in our children’s lives. Tata Power has been conferred the prestigious “Edison Award” for its “Club Enerji #Switchoff2SwitchOn” campaign under Social Innovation category and Social Energy Solutions subcategory. Apart from India, Tata Power Club Enerji also has followers overseas in countries such as France, Germany, the United States, Ireland, Philippines, Bangladesh, United Arab Emirates, South Africa and Nepal. The Club is a case study in IIM-Ahmedabad and was showcased on the prestigious TEDx platform. Our efforts have been recognised by the industry, with the Business Insider ranking us at the top of India’s ‘Most Respected Companies’. As part of our plans to maintain leadership in renewable energy, our rooftop solar solutions are now available in 26 states and 7 Union territories, with our solar arm — Tata Power Solar Systems Limited — having an installed capacity of 421 MW under EPC contracts for customers as well as operating assets under PPA. Rooftop solar is an ideal solution for consumers who are looking for a sustainable source of clean energy that has the in-built capacity to pay for itself in the long run. Furthermore, with the cost of diesel and electricity rising, solar powered water pumps can emerge as the perfect alternative for farmers as these have a low maintenance cost and a long product life. When combined with new distribution solutions like microgrid, solar rooftop and solar water pumps will play a big role in improving the energy access across the country, in both urban and rural areas. All these initiatives are poised to take our share of ‘clean and green’ energy from 30% in 2020 to around 50%-60% in 2025. One of the biggest trials facing humanity today is that of fighting climate change. Mitigating the impacts of global warming requires reconciliation of economic growth with the decrease in GHG emissions. This will only be possible through the transition to a decarbonised energy model. To contribute our share in overcoming this challenge, we are continuously exploring green technology and its applicability for our customers. We are confident of being #FutureReady and continue lighting up lives of our consumers! Yours sincerely, Praveer Sinha CEO & MD, Tata Power 8 9 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsThe Tata Power Company Limited Integrated Annual Report 2019‑20Future ready for smart choices Business at a glance A leading market disruptor in sustainable energy As India’s largest Integrated Power Company, Tata Power continues to honour its 106-year old legacy by being committed to ‘Lighting Up Lives’ for generations to come. Bringing in competency, capturing new opportunities and driving innovation-led change, we have strengthened our position in the new phase of the power industry’s dynamic growth. Our diverse portfolio is suitably geared to enable India’s green and smart transition. As an industry leader, we actively participate and regularly interact with government bodies, institutions, NGOs, industry players across several member platforms to stay in sync with the ever-changing business landscape, and we actively participate in policy advocacy. Note: Details of our memberships are listed in Annexure 1. We currently have 54 subsidiaries (including 7 foreign based), 30 Joint Ventures (JV) and 5 associates, details of which are provided in Annexure 2. 10 Our Business Our Inspiration Our Mission Value Generation Renewable Energy Generation Vision Our vision is to empower a billion lives through sustainable, affordable and innovative energy solutions. Transmission Values – SCALE We aim to achieve our Vision through: Keeping the customer at the centre of all we do. EV Charging Infrastructure Manufacturing Conventional Energy Generation Distribution Solar Water Pump Solar Rooftop Solar EPC Projects Safety Safety is a core value over which no business objective can have a higher priority. for stakeholders Care Care – our environment, customers and shareholders – both existing and potential, our community and our people (our employees and partners). Agility Speed, being through collaboration empowering employees. responsiveness proactive, and achieved and future Learning skill Building learning and sets training. Maximise usage of e-learning platform. through ready Ethics Achieve the most admired standards of ethics, through integrity and mutual trust. Operating executing benchmark technology and innovation. assets projects level and at through Sustainable growth with a focus on profitability and market leadership. an empowered Creating workforce driven by passion and purpose. ‘Leadership with Care’ for all stakeholders. Power Supply Along with supplying uninterrupted power, Tata Power provides beyond- ensure services the-meter customer satisfaction. to Solar Rooftop Tata Power is maximising the utility of idle rooftop space by providing EPC solutions to residential, commercial/ industrial institutional and consumers across India. Solar Microgrids Tata Power has set its sights on overcoming the pervasive challenge of scaling up an innovative microgrid model to provide clean, reliable and economic power to millions of rural households and enterprises. EV Charging Tata Power is establishing energy- efficient infrastructure to ensure India is EV-ready for the transition to green mobility. charging Home Automation Tata Power is reducing the carbon footprint of individual consumers by increasing the energy-efficiency of household appliances and enabling remote monitoring and operation, thereby enhancing user experience and satisfaction. Solar Pumps A range of solar pumps are also available to empower the in alignment with community renewed the focus Governmentof India. of 11 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsThe Tata Power Company Limited Integrated Annual Report 2019‑20Future ready for smart choices Our national footprint An extensive power network Tata Power, together with its subsidiaries and joint entities, is present across the entire power value chain of conventional and renewable energy and next- generation customer solution. We have a domestic footprint with a generation capacity of 12,264 MW. The changes in the Company’s holding structure since the previous year has been documented in the Board’s Report on page 132. No changes have occurred in the share capital structure and other capital formations/ maintenance/ alteration operations since the past year. Similarly, the structure of and relationships within supply chain has remain unchanged. 12,264 MW Total Generation 8,805 MW Thermal 447 MW Hydro 375 MW Waste Heat/BFG 932 MW Wind 1,705 MW Solar Domestic footprint and Generation Capacity (MW) Domestic footprint and Generation Capacity (MW) 1. Gujarat | 4,444 MW 4,150 194 100 2. Uttar Pradesh | 1,981 MW 1,980 1 3. Maharashtra | 1,749 MW 447 239 930 133 4. Jharkhand | 1,723 MW 1,597 120 5 5. Karnataka | 619 MW 569 50 14 16 6 Ajmer 17 Delhi 12 Powerlines 2 1 10 Mumbai 3 15 5 8 7 13 4 9 11 Thermal Hydro Waste Heat/BFG Wind Solar Distribution Transmission 6. Rajasthan | 400 MW 7. Tamil Nadu | 371 MW 8. Andhra Pradesh | 305 MW 9. Odisha | 175 MW 215 185 251 120 205 100 135 40 10. Madhya Pradesh | 174 MW 11. West Bengal | 120 MW 12. Delhi | 110 MW 13. Bihar | 41 MW 130 44 120 108 2 41 14. Punjab | 36 MW 15. Telangana | 15 MW 16. Haryana | 1 MW 17. Uttarakhand | 1 MW 36 15 1 1 12 The Tata Power Company Limited Integrated Annual Report 2019-20 13 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices Key milestones A decade of growth and excellence 2009 2010 2011 2012 2013 2014 2015 Commissioned 120 MW Unit at Tata Steel Works, Jamshedpur Commissioned 120 MW Unit at Jojobera Commissioned 3 MW Solar Power Plant in Mulshi, Maharashtra Commissioned 25 MW Solar Power Plant in Mithapur, Gujarat 1,050 MW Maithon Power Project commissioned First 4,150 MW Ultra Mega Power Project (based on super critical technology) implemented at Mundra in Gujarat Renewable energy received impetus with the commissioning of 28.8 MW Solar Power Project and 32 MW Wind Farm Project in Maharashtra Acquisition of 39.2 MW Wind Farm in Dwarka, Gujarat A landmark year. Tata Power entered 100th year of its operation on 9th February First cross-border Hydro Power Project successfully commissioned at Dagachhu, Bhutan (2 units of 63 MW each). This project was registered under UNFCCC’s Clean Development Mechanism (CDM) 2018 2017 2016 Customer Support chatbot launched in Mumbai Non-fossil fuel operating capacity reached 3,060 MW Sale of Telecom and Defence assets in line with the strategy to divest non- core assets to deleverage Balance Sheet Constructed 187 MW Hydro Project in Georgia Won pilot project from Ministry of Home Affairs to supply Comprehensive Integrated Border Management System (CIBMS) to Border Security Force (BSF) World's largest solar rooftop installed on cricket stadium at Cricket Club India, Mumbai Became India's first power utility company to launch loyalty programme ‘Power Rewards’ in Mumbai Commissioned the 100 MW Anantapur Solar Park, Andhra Pradesh, and developed 250 MW of solar projects in Tumkur district, Karnataka Became first power utility company to automate bill payments using e-NACH, and partnered with IDFC Bank to provide digitised solutions in Mumbai Acquired 1,010 MW renewable assets of Welspun Commissioned 44 MW Lahori Wind Farm Project in Madhya Pradesh 9,100 MW generation capacity crossed in Kalinganagar Project, Odisha India's first pad-mounted Substation designed and developed with Toshiba and Cargill 120 MW Itezhi Tezhi Hydro Power Project (Joint Venture) in Zambia was commissioned (CDM approved by UNFCCC) Inaugurated India's first all-women Customer Relations Centre at Mumbai 2019 Collaboration with AES and Mitsubishi Corporation to power up South Asia's largest grid- scale energy storage system in India BEST extends 677 MW PPA for next five years Sale of assets in South Africa- Cennergi Tata Power won multiple awards at the ACEF Asian Leaders Forum and Awards ceremony held on 28th September, 2019 14 15 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsThe Tata Power Company Limited Integrated Annual Report 2019‑20Future ready for smart choices Corporate governance Leadership with a difference Tata Power’s governance philosophy reflects the Tata Code of Conduct, the Tata Business Excellence Model, and other principles, standards and policies for practising “Leadership with Trust”. Board of Directors We are committed to upholding integrity, social obligations and regulatory compliances in letter and in spirit. These values and principles are enshrined at all levels of the organisation and ensure our alignment on the path towards sustainable and profitable growth. Ethical and inclusive Corporate Governance (CG) is a way of life at Tata Power. Our CG mechanism has been established to ensure sound management, transparency and trust to maximise long-term value for all stakeholders by maintaining the right balance between economic, environmental, individual and community goals. Our Board of Directors is the highest authority in matters of governance and management of the Company. The Board members are some of the finest experts in their respective fields and have been hand-picked to ensure a balance of industry knowledge, expertise and diversity. 1. Mr. Natarajan Chandrasekaran 2. Ms. Anjali Bansal 3. Ms. Vibha Padalkar 4. Mr. Sanjay V. Bhandarkar 5. Mr. Kesava Menon Chandrasekhar 6. Mr. Hemant Bhargava 7. Mr. Saurabh Agrawal 8. Mr. Banmali Agrawala 9. Mr. Ashok Sinha 10. Mr. Praveer Sinha O W N E R S H I P S T R U C T U R E 37.22% 45.51% 17.27% 1 3 5 7 9 2 4 6 8 10 Chairperson Non-Executive Non-Independent Nominee Independent CEO & Managing Director Executive Promoter and promoter group Public (Holding) Public (Institutional Investors) Public (Others) 16 The Board has devised the organisation's strategy around being a responsible member of the society. Additionally, Tata Power also has a sustainability model in place to establish a holistic governance structure and effectively address our stakeholders’ requirements. The initiatives are carried out with respect to our prioritised material issues and our long-standing support towards national thrust areas for development. Based on a holistic approach, several sustainability-related policies have been framed to govern the way business is conducted. Corporate Environment Health and Safety Policy Corporate Social Responsibility (CSR) Corporate Sustainability E-waste Management Policy Human Rights Policy Whistle Blower Policy Responsible Supply Chain Management Policy Leadership and Oversight on Sustainability Advocacy Institutional Structures and Systems Leadership with Care Initiatives that are based on, and are encompassing Care for our environment (society at large) Care for our shareholders and customers • Environment Conservation • Efficient use of Energy • Investment in Green tech. What needs to be done (material to both stakeholders and us) What we are good at doing/ is linked to our business Care for our community Care for our people What we should take up as national thrust areas for development What we should define as our standards; from compliance, to competing, to leading Corporate Customer Service Policy New Technology Benchmarking. Going beyond compliance Architecture of Care E X TE RNAL LINK | More information on our policies Enablers Objective and its Elements Encompassing values Compliance in Letter and Spirit Compliance is considered a matter of high priority at Tata Power. We are committed to creating a positive ecosystem in the industry and the respect and trust which the Company enjoys with its stakeholders is a testament to this commitment. There are no cases pending with regards to unfair trade practices, irresponsible advertising and/ or anti-competitive behaviour as on 31st March 2020. Similarly, we have no legal cases relating to corruption, attributable to either employees or our business partners, cited this year. Stakeholder complaints received during FY20 were: Stakeholder Employees* Vendor Investor Customer Received in FY20 Satisfactorily resolved by the management (%) 41** 7 20 1 100 100 95 100 *Including 6 contract employees **Inquiry is under progress for two concerns We firmly support human rights and the rights of all our stakeholders. We are proud to declare that we have not received any complaints regarding violation of rights of indigenous people, child labour, forced labour, freedom of association, right of collective bargaining and discrimination based on gender or social vulnerability. Equally, we have been fully compliant with products and service regulations concerning health and safety impacts, marketing communication, information and labelling. There were no pending or unresolved show-cause notices issued during FY20 from the Central Pollution Control Board or State Pollution Control Board. Our robust compliance approach has led us to be free from any significant regulatory fines or sanctions for non-compliance with local and national laws. We advocate competitiveness, effectiveness and positively contribute to the development of the Power sector in India. We achieve this by focussing on energy security, governance and administration, enhancing competition and transparency in the power sector, structural changes for facilitating capacity addition, overcoming coal-related challenges, electricity distribution reforms and promotion of renewable energy. You can read further about our corporate governance structure, committees and mechanisms. Report on Corporate Governance, Page 200 17 62.78%OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsThe Tata Power Company Limited Integrated Annual Report 2019‑20Future ready for smart choices Our emphasis on value 20 Value-creation model 22 Our strategy 24 Stakeholder engagement 26 Materiality 30 Tata Power's commitment to UNSDG 32 Risk management 36 Response to COVID-19 Executing stakeholder-centric, value-led operations Value-creation model Creating value with excellence Our business model is built on a customer-centric approach, along with sustainable value creation delivered to each and every one of our stakeholders. O U R I N P U T S O U R B U S I N E S S M O D E L O U R O U T C O M E S O U R VA L U E ‑ C R E AT I O N M O D E L D E V E L O P I N G I N T E G R AT E D S O L U T I O N S B E YO N D B E N C H M A R K E D E XC E L L E N C E Financial Capital Our financial capital is available through equity investment by shareholders, reallocation of resources, debt from lenders and retained earnings. • Net Worth (Consolidated) – ₹ 21,898 crore • Net Debt (Consolidated) – ₹ 43,559 crore V I S I O N Our vision is to empower a billion lives through sustainable, affordable and innovative energy solutions. Manufactured Capital Our plants and equipment pave the way for sustainable operations of our core business activities. This can be seen through better operational efficiency, up-scaling of renewable assets, our ventures in new and service-led energy- efficient business initiatives such as smartgrids, microgrids, rooftop solar, solar pump, home automation etc, investments in DSM programmes, leading to energy saving as well as achieving operational efficiency. Intellectual Capital Our proprietary technologies, software, licences, procedures and protocols to support a competitive advantage for Tata Power. • Collaborative efforts - TPDDL • Central Control Room for Renewable Assets (CCRA) • Dedicated R&D expenditure towards innovative technologies that ensures cost efficiency and reduces financial loss Human Capital Our strong workforce is vital to the successful operation of our businesses. Employee retention and leadership training also form an important part of our initiatives. • 8,613 employees for The Tata Power Company Limited • Tata Power dedicated 9,950 manhours to external training programmes collectively Social & Relationship Capital To create a holistic and sustainable environment for our operations, we inculcate the needs and concerns of our stakeholders into our businesses and ensure that we deliver long-term value. • ₹ 39.97 crore spent on CSR initiatives • Alignment of CSR activities and action on UNSDG (1, 2, 3, 4, 6, 8) Natural Capital Responsible sourcing, benchmark operational and maintenance practices as well as a balanced use of natural resources. • 223,769,562 m3 of water consumed for thermal operations • 19,747,659 MT of coal consumed for thermal operations Suppliers Lenders Investors Regulators Employee Unions S H I C T E Customers Community NGOs Media Employees S A F E T Y L E A R N I N G VA L U E S ( S C A L E ) E R A C A G I L I T Y S T R AT E G I C B U S I N E S S O B J E C T I V E S SBO 1 Resolution of CGPL coal cost under-recovery SBO 2 Deleveraging Balance Sheet SBO 3 Scale-up Renewables, Distribution, Services and Energy Solutions businesses SBO 4 Focus on Sustainability with an intent to attain carbon neutrality Generation Transmission & Distribution C U S T O M E R S Fuel & Logistics New & Service- led Business SBO 5 Building a customer-centric organisation SBO 6 Leveraging digital to establish new business model and enhance existing business delivery SBO 7 Create and engaged, agile and future ready workforce SBO 8 Set new benchmarks in operational excellence and financial returns for existing businesses Financial Capital • Consolidated Operating Revenue – ₹ 28,948 crore • Consolidated Operating Profit – ₹ 7,870 crore • Consolidated Net Profit – ₹ 1,316 crore • Free Cash Flow on Consolidated basis – ₹ 2,271 crore Manufactured Capital • 12,742 MW of domestic and international capacity with 30% from 'Clean and Green' sources • TPSSL’s order book for solar EPC projects stands at 1,580 MW amounting to ₹ 7,000 crore • Rooftop solar projects rolled out in 94 cities across India • Availability of affordable and reliable electricity to remote areas across India through microgrids. 18 microgrids test charged and around 55 projects are in pipeline • 170 EV charging points installed in 20 cities as part of EV charging infrastructure partnerships • Acquisition of Central Electricity Supply Utility (CESU) of Odisha (51% equity stake) through Public Private Partnership (PPP) • DSM initiative - ‘Be Green’ led to cumulative savings of over 6,000 MWh in Mumbai Distribution Intellectual Capital • TP Renewable Microgrid Limited is aspiring to end energy poverty through off-grid solution for last mile electrification • Installation of Battery Energy Storage System (BESS) • 1.95 lakh SMART meters installed by TPDDL Human Capital • 100% of our contractual employees are trained on various aspects of occupational safety • 22.2% (Workmen Cadre employees) of our employees are covered by collective bargaining agreements • 96.6% retention was achieved for employees at higher cadres Social & Relationship Capital • Presence of 2.6 million distribution consumers • 100% of our new suppliers were screened using our social criterion (PO value greater than ₹ 5 crore) • 120% CSR spent achieved over obligation on a consolidated basis • 118% beneficiary covered over target on a consolidated level • Average CSAT score (of Mumbai Distribution, Mumbai Transmission, TPDDL and TPREL) in FY20 was 92.5% up from 87.5% in FY19 Natural Capital • 100% fly ash utilisation at all thermal power plants as per regulatory requirements • 10.3 lakh trees planted • Achieved overall carbon intensity of 0.681 tCO2e/MWh 20 21 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Our strategy Our blueprint for the future With the help of its value-creation model, Tata Power continues to take positive strides towards consolidating its position as India’s largest integrated power company. FY20 witnessed steady progress across business lines enabled by a sound strategic plan. The business strategy is framed bearing in mind the Company’s core focus areas. Fuel growth in renewables business, including solar rooftop solutions Expand distribution presence and network, including microgrids Invest in Next-Gen power solutions We adopt an integrated approach to cater to the evolving needs of our review and strategy customers. A planning is conducted annually, which enables effective assessment, evaluation and appraisal of our strategy and future roadmap. We also undertake a detailed study to identify the interdependence of our business activities with external factors such as geo-political conflicts, market instability, innovation and legislative or regulatory requirements, among others. These external factors are also considered during risk identification and strategy development. We have a programmatic approach effective rollout of our strategy encompassing four key phases. enables that F E E D B A C K L O O P Gather and Analyse Encompassing internal and external analysis Set Direction By discerning strategic challenges and advantages Deploy At an enterprise level with actionables trickling down to individual KRAs Plan By chalking out clear objectives and strategic enablers Strategic Business Objectives In accordance with our leadership’s intent to present a consolidated and holistic view of the Company’s overall business performance and outlook, we have identified eight Strategic Business Objectives (SBOs). Resolution of CGPL coal cost under-recovery Targets � Optimise coal blending to minimise impact of rise in coal benchmark price � Advocacy for quick implementation of High Power Committee recommendations � Optimisation of coal transportation and handling cost SBO 1 SB O 8 S B O 2 7 O B S Strategic Business Objectives S B O 3 Set new benchmarks in operational excellence and financial returns for existing businesses Targets � Operate thermal and hydro plants at optimum efficiency � Operate RE portfolio above design parameters to increase yield � AT&C loss reduction for TPDDL, TPADL and CESU � Maximise incentives in regulated business Create an engaged, agile and future ready workforce Targets � Culture and engagement � Workforce planning � Leadership and succession planning � Capability building Deleveraging Balance Sheet Targets � Reduce debt through divestment of non-core assets and strengthen balance sheet � Adopt debt-light models through innovative financial engineering and re-structuring Scale-up Renewables, Distribution, Services and Energy Solutions businesses Targets � Increase share of clean energy/ renewables to 50-60% of the generation portfolio by 2025 � 1 crore+ customer base across business by 2025 � More than 1 lakh EV Chargers across India by 2025 Leverage digital to establish new business model and enhance existing business delivery Targets � Improve asset performance � Enhance customer experience through use of data analytics � Productise current IT assets and services � Explore new business opportunities leveraging digital technology S B O 6 SB O 4 SBO 5 Building a customer-centric organisation Targets � Roll out of value-added services for customer delight � Improve customer satisfaction � Building organisational capabilities to drive customer-centricity Focus on Sustainability with an intent to attain carbon neutrality Targets � Attain carbon neutrality by 2050 � Reduce specific fuel consumption by improving operational efficiency � Benchmark in waste management (Gainful fly ash utilisation) 22 23 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Stakeholder engagement Trust with transparent communications In our endeavour to build a sustainable future, we, at Tata Power, aim to develop strategic partnerships with our stakeholders and increasingly engage them in the Company’s activities and operations. Stakeholder inclusivity and prioritisation ensure the correct understanding and adequate response to stakeholder needs, interests and expectations. Our engagement approach has been curated to address the critical nature of our business scope and outcome. Tata Power’s Stakeholder Engagement Strategy initiatives Our stakeholder engagement strategy ensures a precise level of advocacy and transparent communication with our stakeholder groups on the challenges that Tata Power faces as well as the introduced various opportunities and to address stakeholder concerns. Accordingly, we formed strategic stakeholder groups based on specific criteria in accordance with the nature of each group. Our stakeholder engagement process has incorporated requisite channels of communication to build on our robust relationships as well as increase our understanding of stakeholder concerns and challenges. Our interaction with stakeholders also enabled us to develop a better perspective on relevant material matters for Tata Power. This, in turn, helps to improve the overall strategy and orientation of our businesses. Stakeholder Groups Why are they important Engagement Mechanisms Stakeholder Recommendations Investors Provision of financial capital that enables the sustainable growth of Tata Power � Scheduled investor meets � Quarterly results call � High Leverage � CGPL Tariff resolution � Growth and profitability of renewables � Shift focus from R&D to outsourcing technology � Better communication about progress on Company targets Stakeholder Groups Why are they important Engagement Mechanisms Stakeholder Recommendations Lenders Provision of debt capital to the expansion of Tata Power’s business activities � Periodic meetings � Financial status of Distribution Companies Regulatory Authorities Access to operating licences and the imposition of regulatory measures � Scheduled meetings � Regular liaising � Industry Forums (Discoms) � Increased disclosure on Environment, Social and Governance (ESG) aspects � Colour coding underground cables of Municipal Corporation of Greater Mumbai (MCGM)- to ensure identification and avoid damage during civil work � Consideration of micro tunnelling � Climate change awareness and alignment to Nationally Determined Contributions (NDC) � Reduce dependence on imported coal Customers Bedrock for our growth as a Company � Customer satisfaction surveys � Formal and informal feedback � Quality and reliability of power supply � Improved notifications of disruption, failures or Board of Directors & Leadership Ensures the prosperity of Tata Power through collective direction of the Company’s affairs whilst meeting the appropriate interests of our stakeholders and shareholders Employees Form the backbone of our business activities and play an important role in improving productivity, efficiency and boost our profits maintenance for customer transparency � Scheduled Board meetings � Scheduled and special Board Committee meeting � Storage and trading of renewable energy, micro grid operations, and electric vehicle charging � Focus on customer-centric policies and ethical billing � Proactive interaction with investors for ESG initiatives and strategy � Periodic review of perceived risks and impact of CSR activities � Work-life balance � Transparent appraisal and promotion policy � Stability of internal policy � Fair remuneration structure � Training and seminars � Meetings & Reviews � HR programmes � Employee satisfaction surveys � Departmental meetings � Townhall meetings � Quarterly Management communication Suppliers/ Vendors Help us develop our business ecosystem, support our sustainability initiatives and create shared value NGO Enable better implementation of our environment and social initiatives Local Community Media Employee Unions Provides a better socio-economic context in our operating environment to ensure long-term viability of our business activities Plays a vital role in keeping our stakeholders informed of business developments, new products and services as well as the impact of our business operations Help set standards for education, skill-levels, wages, health and employee benefits and working conditions of our employees � Regular Supplier/ Vendor � Formal supplier assessment to verify ESG meets performance � Contract revision and negotiation meetings � Project-based stakeholder meets � Periodic meetings � Increased awareness for partnering in green initiatives � Ethical business practices � Increased community involvement � Transparency in business practices and their impacts � Project-based stakeholder � Increased infrastructure for training community meets members � Participation in CSR activities � Safety and security of facilities as well as � Media briefings � Press releases � Marketing communication electricity supply � Increased transparency and clarity in shared information � Scheduled meetings � Dedicated surveys � Ethical and responsible business conduct � Equal opportunities for all 24 25 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Materiality Integrated smart and sustainable solutions Our materiality assessment is a foundational aspect of our Integrated Report, allowing us to gather insights on the relative importance of specific Environmental, Social and Governance (ESG) issues and their impact on value creation. Topics that are considered material to Tata Power are taken into immediate consideration, given their influence on our business activities, stakeholders and their ability to create sustainable value. Our material topics also provide further insights into our stakeholders’ expectations, and the challenges and risks our Company might face in the near future. Our materiality assessment influences are: Strategic Planning Operation Management Capital Investment Decisions Strengthening our materiality assessment For FY20, we undertook a new materiality assessment methodology in accordance with the IIRC Framework to gain a nuanced understanding of the most relevant matters that could impact our business in the short, medium and long term. Our materiality process involved an assessment of the importance of topics through the evaluation of: Magnitude of the effect (for matters that have occurred, currently exist, or will occur with certainty) Likelihood of occurrence (for matters where there is uncertainty about occurrence) The exercise provides detailed insight into the analyses of both positive and negative effects on present and future material issues. The robustness of this exercise also provides us with inputs to build a sustainable strategy, considering topics of importance to our Company from the Environment, Social and Governance (ESG) perspective. Materiality determination process For our maiden Integrated Report 2019-20, we adopted a four-step process to determine our material topics: 1. Identification of Relevant Topics sectoral The comprehensive list of material topics was collated based on business requirements, insights, stakeholder concerns, global issues and peer analysis, ensuring that we cover topics of most importance and relevance to our stakeholders as well as those which may influence intent and business our strategic activities. We also mapped the process to ESG disclosure frameworks such as GRI (Global Reporting Initiative) and SASB (Sustainability Accounting Standards Board). 2. Prioritisation of Material Topics identified material then prioritised topics The were through collective inputs from key internal and external stakeholders. During our interactions, we used survey- based assessment forms to capture stakeholder responses. Our material topics were then categorised based on the magnitude of impact and the likelihood of occurrence to facilitate our internal strategy planning. Materiality determination process 4. Refined strategic alignment with our material topic 3. Validation of material topics Our prioritised material topics enabled us to better understand challenges that could be encountered in the future. With keen insight into what these challenges entail, we have integrate a to sustainability parameters into our strategy. This process is also interlinked with strengthening our risk mitigation and management, and enhancing our decision-making processes. foundation robust our prioritisation, Post senior management validated the final list of material topics. This also enabled us to further refine our material topics and focus areas. 26 27 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Materiality TATA P O W E R ’ S M AT E R I A L T O P I C S F O R F Y 2 0 Material Topics Strategic Objective Key Actions Increase in renewables portfolio Scale-up Renewables, Distribution, Services and Energy Solutions businesses Customer relationship Building a customer- centric organisation Future ready Deleveraging Balance Sheet Human Rights Create an engaged, agile and future ready workforce Waste Management Carbon emission management Focus on Sustainability with an intent to attain carbon neutrality Focus on Sustainability with an intent to attain carbon neutrality Operational Efficiency Set new benchmark in operational excellence and financial return for existing businesses � Developing an efficient structure to grow the business into industry leadership position � Arranging capital for investments in renewable energy projects � Maintain market leadership in the rooftop solar business by targeting both urban and semi-urban areas for expansion � Focus on multi-fold growth in renewables EPC business � Develop the Microgrid Business Model � Minimise customer complaints (reduction in complaint index) and achieve benchmark CSAT-Indicator of Customer Satisfaction � Deployment of new technologies for enhanced customer experience (AI, ML, DA etc.) � Enablement of customer life-cycle management for Renewable Energy (RE) customers � Customise offerings (behind the meter BESS for C&I customers, elevated structures micro inverters for residential and SME customers and different customer financing solutions for B2B and B2C customers) � Seamless experience in every customer online touch-points � Roll out of value-added services for customer delight � Specialised services for specific customer segments like senior citizens etc. � Establish capital light structures to leverage on growth opportunities � Monetise non-core assets to deleverage and strengthen balance sheet � Continuously identify future opportunities � Strengthen our annual strategy review and turnaround plan � Adopt alternative business structure – debt light models through innovative financial structuring � Strengthening our labour management relations � Ensuring diversity and equal opportunity and non-discrimination within the organisation � Freedom of association and collective bargaining � Strict opposition to child, forced and compulsory labour � Establishing stringent security practices � Conducting human rights assessments as well as supplier social assessments � Increasing initiatives to responsibly manage waste by type and disposal � Consistently building on our innovative initiatives to reduce GHG emissions and improve operational efficiency to reduce energy consumption � Reducing carbon intensity by increasing investments in renewable portfolio � Phase out plans for thermal projects and retire existing thermal assets without life extension � Compensatory afforestation � Aggressive growth in renewable energy-based capacity (Utility scale, Microgrids, Rooftop) � Exit businesses which do not support sustainability targets � Deploy advanced technologies to manage assets � Strengthening our approach to ensure short- and long-term electricity availability and reliability � Technical interventions taken to enhance the efficiency of the power plants and renewable projects � Increasing our initiatives to reduce transmission and distribution loss SDGs Capital Linkage Material Topics Strategic Objective Key Actions SDGs Capital Linkage Corporate Governance Demand-side management Resource availability Biodiversity Training, education and development Set new benchmark in operational excellence and financial return for existing business Set new benchmark in operational excellence and financial returns for existing business Focus on Sustainability with an intent to attain carbon neutrality Focus on Sustainability with an intent to attain carbon neutrality Create an engaged, agile and future ready workforce Impact on business due to change in Coal tax or coal pricing Sustainable investing Innovation in process, service & solutions Occupational Health & Safety Resolution of CGPL coal cost under-recovery Scale-up Renewables, Distribution, Services and Energy Solutions businesses Leveraging digital to establish new business model and enhance existing business delivery Set new benchmark in operational excellence and financial return for existing businesses Capitals � Provision of trainings and awareness programmes on anti-corruption and anti-competitive behaviour at Tata Power � Building awareness among stakeholders on change in regulatory norm � Board-led architecture on high quality of governance and risk management � Robust organisational structure to drive the culture of ethics (Tata Code of Conduct) � Increasing initiatives towards Demand Side Management (DSM) programmes including residential, commercial, institutional and industrial � Increasing net investment made in DSM programmes and corresponding MWh saved or MW load shifted � Building on our actions/future plans taken to ensure business continuity during periods of water scarcity and coal deficits � Promote resource efficient technology � Improvement in operating parameters to reduce consumption of coal and water � Ensure and implement responsible business practices in areas of high biodiversity value Increase value added trainings conducted for employees � Ensure regular performance and career development reviews for employees � Increase health and safety trainings for contractors and sub-contractors � Leadership and succession planning � Introducing integrated talent management system and leadership competency model � Focus on E-learning and blended learning � Build new competencies for growth � Use of technologies like virtual and augmented reality for future learning � Discussion with the respective state discoms for implementation of High Power Committee recommendation � Ensure periodic review of tax governance, control, and risk management � Ensure frequent review of stakeholder and management concerns related to tax � Investment decisions to increasingly encompass sustainability linked parameters � No greenfield and brownfield thermal project going forward � Enhancing partnerships and collaborations with new technology start-ups in the energy solutions and services domain � Integrating digital technology to improve asset performance and enhance customer experience � Ensure detailed coverage of health and safety topics in formal agreements with trade unions � Increase initiatives towards the reduction of safety incidents and occupational hazards � Consistently establish industry best practices on health and safety 28 29 Financial Manufactured Intellectual Human Social And Relationship Natural Corporate Governance and Risk & Opportunities OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Tata Power’s commitment to UNSDG In alignment with global goals We, at Tata Power, have committed to align our business activities with the United Nations Sustainable Development Goals (UNSDG). Additionally, our policies at Tata Power are also based on the UNSDG. We undertook a detailed SDG mapping study in FY18, where we prioritised the SDG focus areas, identified high impact initiatives and developed a roadmap to drive change. This was carried out through a detailed stakeholder engagement, interlinkage with our materiality assessment and sector-specific priorities with an understanding of the Company’s strategic intent and national priorities. The key outcome of this exercise led to strategic bifurcation of business activities and CSR initiatives along with the mapping of the respective SDGs through a priority analysis. In developing our roadmap, we have adopted three-year targets for each prioritised business in alignment with the relevant UNSDG. Additionally, our initiatives under each thrust area have an impact across our prioritised SDGs. Our Company has prioritised 10 Sustainable Development Goals (SDGs): Health & Sanitation MAMTA, SAMMAAN Education VIDYA SCALE Livelihood & Skill-Building DHAAGA, ABHA, ROSHNI, DAKSH Financial Inclusivity ADHIKAAR Emission reduction Increasing operational efficiency, Innovation Circular Economy Fly ash utilisation, reduce dependency on mined resources Business Thrust area CSR Thrust area Business Oriented Tata Power Initiative CSR Oriented Water AMRUTDHARA Livelihood & Skill-Building DHAAGA, ABHA, ROSHNI, DAKSH Renewable Energy Tata Power Renewable Energy Limited Microgrids TP Renewable Microgrid Limited 30 31 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Risk management Building a future ready business We endeavour to thrive in an ever-dynamic business landscape with myriad risks and opportunities. To ensure continuous value-creation for our stakeholders, we periodically update our understanding of risks and opportunities that can influence our business. We focus on identifying risks, understanding the magnitude of impact, and potential time horizon of occurrence. Once we gain this understanding, we build our mitigation strategies to enhance the resilience of our business against various potential risks. We have devised a Risk Management Policy, which can be accessed on our website at https://www.tatapower.com/ corporate/policies.aspx. Aligned with this policy, we have implemented a standardised Risk Management Process and System. The process of risk identification is guided by the Company’s objectives, external environment, industry reports, internal stakeholders, among others. The risk identification process covers the whole gamut of risks, including strategic, tactical and operational. Once risks are identified, we designate a risk owner and risk champion, who is responsible for devising plans outlining mitigation actions for the assigned risks. The identified risks with mitigation actions are then mapped onto our internal system with details of allocation of responsibility and timelines for achieving the targets. The Risk Management System facilitates Cluster Risk Management Committees (CRMCs) to closely monitor and review the risk plans. The mitigation strategy devised as part of the risk plan also encompasses the frequency of revision and is closely monitored at various levels. A measure called the Risk Mitigation Completion Index (RMCI) is used to determine and monitor the level of completion of each mitigation action area, where the RMCI percentage is lower than the target, is monitored with justifications sought for any deviation. Further, strategies are devised to improve the (RMCI) score. Learnings from mitigating a risk are also captured in the risk plan. This helps in cross- functional and experiential learning across the organisation, enabling effective and comprehensive risk management. Our Risk Register clearly lays out details of mitigation plans. CRMCs are responsible for closely monitoring and reviewing the risk plans and mitigation action pertaining to various business functions. As per the listing regulations, a Board Risk Management Committee (RMC) has been constituted which comprises three Independent Directors and two Non-Executive Directors. The RMC meetings are held regularly to review critical strategic risks. Key risks are monitored at the CRMC level. Corrective actions, if any, are discussed and the mitigation plans are revised accordingly. Our risk management approach also focuses on ensuring compliance with all relevant legislations. Tata Power Group employs a proprietary software to run the Compliance Management System (CMS) to closely monitor the status of compliance with all the applicable laws and regulations. The Compliance department updates the compliance report to the senior management independently to ensure oversight on compliance practices. Currently, Tata Power and all material domestic subsidiaries are covered under the CMS umbrella. This software sends alerts informing us of any changes in regulations/laws and accordingly updates the database. Additionally, the legislations which are no longer applicable are disabled in the system. For the remaining entities not under the CMS umbrella or an IT-enabled system, the Compliance Monitoring Cell of Tata Power seeks their status of compliance and reports to the respective Board, in accordance with the Compliance Monitoring and Reporting framework. The present structure of governance and a uniform online reporting system through CMS enables the Tata Power Group to have an integrated reporting of compliance to its Management. Senior Management Compliance Monitoring Cell (CMS) Apex Compliance Committee (ACC) Chief Legal Office (Chairman and Convener) � Chief - IA & RM � Chief - Thermal � Chief - Renewable � Chief - Transmission & Distribution � Chief - Corp F&A � Chief - Business HR � Chief - Digital & Info Technology � Chief - Compliance 32 33 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Risk management Internal Financial Controls and Systems The Management has implemented robust processes to ensure that all Internal Financial Controls (IFCs) are effectively working. The Company has an in-house internal audit function which reviews the sustained effectiveness of IFCs by adopting a systematic approach to its work. To fulfil the requirements of the Companies Act, 2013, the internal audit team has integrated IFCs into Risk Control Matrix (RCM) of enterprise processes which are tested as per the approved internal audit plan. Upon review of the internal audit observations and corresponding actions taken, there remain no adverse observations which have a financial and commercial impact or material non-compliances which have not been acted upon. Tata Power continues with the Control Self-Assessment (CSA) process, whereby responses of all process owners are used to assess internal controls in each process. This helps the Company to make process improvement plans, identify focus audit areas, design the audit plan and support CEO/CFO certifications for internal controls. Description Mitigation strategy Sr. No. 1 Classification of risk Sector specific risk 2 Technology risk � The poor financial performance of the state Discoms (collection of tariffs in accordance with PPAs) � In renewables, creditworthiness and business continuity of the customer remains an issue Cyber security risk threatening data privacy and having potential to impede operational transactions Strategic Linkage SBO 3 SBO 8 � Close monitoring of financial health of the Discoms through Discom Ratings by Ministry of Power � Sustained advocacy with distribution companies and regulatory bodies � Diversification of renewable portfolio across various procurers, tariff structures and states � Continuous enhancement in automated detection and SBO 6 preventive solutions to address evolving threats � Continued reinforcement of security policies and procedures � Enterprise-wide training and awareness programmes on information security � Inputs from Computer Emergency Response Team (CERT) and other private Cyber Intelligence agencies, and enhanced awareness of emerging cyber threats � Periodic testing to validate effectiveness of controls through Vulnerability Assessment and Penetration Testing � Regular internal and external audits � Investment in Cyber Insurance � Continuous advocacy with procurers to execute revised PPA following HPC recommendations � Advocacy with state ministry and regulatory bodies at SBO 1 SBO 8 various levels � New avenues to utilise fly ash in ready mix concrete, slag cement, fertiliser, etc. for 100% fly ash utilisation, study for implementation of Flue Gas Desulphurisation plant (FGD) and advocacy measures for passthrough of that cost � Policy advocacy at the central and state level and exploration of possibilities of legal remedial action, selective bidding and avoiding specific identified states � Credit risk assessment of private customers during bidding, SBO 3 SBO 4 securitisation of payment through LC, advocacy for enforcement of payment security mechanism of LC � Mitigation through prudent operations management, resource optimisation, leveraging upon diverse portfolio, correct forecasting of cost escalations at the time of bid, leveraging on presence across value chain from manufacturing to operations, stringent IRR criterion at the time of bidding, procurement of solar module from tier 1 suppliers or own manufacturing unit guaranteeing satisfactory yield 3 Regulatory risk 4 Commercial risk � CGPL coal cost under-recovery delay in implementation of High Power Committee (HPC) recommendations � Non- renewal of PPA for Trombay Power Plant beyond FY24 � Water securitisation of Hydro Plants- Risk of reduced generation in non- monsoon months due to eastward diversion of water � Risk of violating environment norms � Non-adherence of Government/ discoms to PPAs and opening up PPAs for renegotiations, especially for specific renewable assets � Risk accumulation in large projects, EPC business and rooftop solar � Moderation of solar and wind tariff putting pressure on margins in renewable sector Sr. No. Classification of risk Description Mitigation strategy 5 Financial risk � Availability of cost-effective capital: availability of debt in terms of current level exposure of the banking sector to stressed asset � High leverage: Increased borrowings over last few years primarily due to losses in CGPL � Renewal of license of KPC mine in Indonesia � Diversification of lenders base by reaching out to lenders who have not breached exposure limit, diversification to overseas borrowing, ECBs, ECAs, etc. � Monetisation of non-core assets and other investments to deleverage � Advocacy with Indonesian government along with JV partners 6 7 Business risk Availability of fuel for thermal plant at optimal cost Exploration of alternative coal sources, liaise with coal companies to understand their production and dispatch plan, reduction of coal consumption though operational efficiency Climate change and Business continuity linked risks � Availability of fuel for thermal plant at � Lowering of carbon intensity by focusing more on the renewable portfolio as well as venturing into energy efficient businesses like Rooftop Solar, EV charging, Microgrids, etc � Improvement in operational efficiency for thermal power plants � Installation of pollution control and energy efficient equipment � Establishment of robust Business Continuity and Disaster Management Plan (BCDMP) evidenced through recertification on ISO 22301:2012 from the British Standards Institution (BSI) optimal cost � Climate change linked transitional risk: possibility of government capping the amount of carbon emissions generated � Climate change linked Physical risks: operations located in coastal area may get affected with rise in sea level, fluctuations in weather conditions leading to rise in water temperature potentially affecting processes, extreme weather events such as floods and droughts, fuel and water scarcity � Risk of pandemic and other natural disasters Strategic Linkage SBO 2 SBO 8 SBO 4 SBO 8 O v e r v i e w O u r E m p h a s i s o n V a l u e l O u r V a u e - c r e a t i o n P a r a d g m i S t a t u t o r y R e p o r t s i F n a n c i a l S t a t e m e n t s 34 The Tata Power Company Limited Integrated Annual Report 2019-20 Future ready for smart choices 35 Response to COVID-19 Track. Adapt. Transform. Achieve. The advent of the global pandemic, COVID-19, has accentuated the need for sustainability to be ingrained at the heart of our business operations. Apart from the acute health impacts, COVID-19 has also severely affected business operations and the economy across the globe. Leveraging our commitment to ‘Responsible Growth’, Tata Power has shown its strategic preparedness by analysing future risks the Company could face with respect to the causatum of the pandemic. A COVID-19 Apex Response Committee was formed to oversee organisational preparedness and management of the pandemic from a business continuity as well as employee safety perspective. In addition to segregation of essential and non-essential staff, location-wise Emergency Response Teams (ERTs) were formed and work from home or sites was assigned on a rotational basis. We are humbled to state that all our business operations of Power Generation, Transmission & Distribution and Renewables were fully operational during the outbreak. We worked tirelessly during the pandemic to set up COVID-19 guidelines and standard operating procedures (SOPs) across the organisation. Apart from ensuring a safe strategy to combat the COVID-19 crisis in the short-term, we have also initiated long-term resilience mechanisms to strengthen our response to future risks or disasters. This involved the upgradation of our Business Continuity Plans to a new normal condition post lockdown, handholding of various divisions to articulate site-specific scenarios and establish operating strategies for business continuity. O U R S T R AT E G I C WAY F O R WA R D I S P R O V I D E D B E L O W: Pre-lockdown During lockdown Post-lockdown Pre-planning � Safe practices � Awareness drive � Emergency protocols and a guidelines for all � Essential services planning � Communication to employees and associates SOP Long-term BCP � Entry/Exit norms (social distancing, � New-normal long-term business multilayered screening, self declaration etc.) � Work from home � ROTA for critical functions � Guidelines for works, offices and colonies � Communication drive continuity preparedness � BCP template shared with divisions for assessment and feedback considering various scenarios O v e r v i e w O u r E m p h a s i s o n V a l u e l O u r V a u e - c r e a t i o n P a r a d g m i 36 The Tata Power Company Limited Integrated Annual Report 2019-20 Future ready for smart choices 37 S t a t u t o r y R e p o r t s i F n a n c i a l S t a t e m e n t s Our value-creation paradigm 40 Manufactured Capital Intellectual Capital 52 58 Human Capital 70 Social and Relationship Capital 98 Natural Capital 114 Financial Capital Developing assets to create long-term value for our stakeholders Manufactured Capital The future of energy infrastructure Over the next decade, the Indian economy will continue to grow at a rapid pace and a key enabler of that will be India’s ability to fulfil its energy needs. Our future growth would be to enhance customer experience of the energy consumer like never before by focusing on innovation and technology, with emphasis on renewable power, power distribution and service-led business. This will bring in greater value and help us align with emerging consumer needs. Mr. Praveer Sinha, CEO and MD Tata Power relies on developing assets to create long-term value for its stakeholders. We are committed to growing responsibly and delivering superior products and services to our consumers. Our growth is driven by our strategic objectives, which take into account the material issues that impact our business. We also factor in the inherent risks involved in asset development and address relevant stakeholder concerns. Our asset and product development influence our performance across other significantly capitals as well. Our asset portfolio • Power generation facilities • Power transmission facilities • Distribution and substation facilities • Solar cell and module manufacturing Our product portfolio • Solar PV panels • Microgrids • Solar pumps • Batteries • Smart appliances EV Charging • Infrastructure • Solar RO systems PE R FO R M A N C E H I G H L I G H T S 421 MW 1.9 GW Of Solar rooftop EPC business, including 28 MW of solar rooftop under PPA Solar PV modules shipped globally by Tata Power Solar Systems Limited 312 MW Of solar power generation capacity added in FY20 700 MW Solar projects under various stages of implementation under Tata Power Renewable Energy Limited 51% 170 Stake in Central Electricity Supply Company of Orissa Ltd EV charging points in 20 cities in India IMS COMPLIANT Thermal stations Strategic Objectives Material Topics Addressed Key Risks Considered Stakeholder Recommendations Addressed SDGs Focused SBO 3 � Increase in renewables � Moderation of solar � Prioritised focus Scale-up Renewables, Distribution, Services and Energy Solutions businesses energy portfolio � Operational efficiency SBO 8 Achieve benchmark operations, attain market leadership and outperform set targets and wind tariff putting pressure on the margin � Credit worthiness and business continuity of the customer towards renewables � Dependence on imported coal � Quality and reliability of power supply � Storage and trading of renewable energy, microgrid operations, and electric vehicle charging I M PAC T O N OT H E R C A PI TA L S Our performance in Manufactured Capital has a significant influence across other capitals. Social & Relationship Capital Impact � Availability of affordable and reliable electricity to remote areas across India � Promote rural entrepreneurship and improve quality of life � Cost effective solutions through rooftop solar Natural Capital Impact � Reduction in carbon emissions due to initiatives like microgrid installation, solar rooftop, etc. � Reduction in overall carbon intensity due to implementation of efficiency improvement measures as well as increased investment in renewable portfolio Manufactured Capital Human Capital Impact � Adequacy of competent manpower and safe working conditions during asset development Financial Capital Impact � Increased revenue generation opportunities � Reduced margins in renewable sector due to aggressive expansion Intellectual Capital Impact � Innovation to improve generation and transmission efficiencies � Innovation in microgrid and solar rooftop domain O v e r v i e w O u r E m p h a s i s o n V a u e l O u r V a l u e - c r e a t i o n P a r a d g m i S t a t u t o r y R e p o r t s i F n a n c i a l S t a t e m e n t s 40 The Tata Power Company Limited Integrated Annual Report 2019-20 Future ready for smart choices 41 C U M U L AT I V E A N N U A L C A PA C I T Y A D D I T I O N Fuel Source State Location TATA P O W E R H A D A N O P E R AT I O N A L G E N E R AT I O N C A PA C I T Y O F 12 , 26 4 M W D O M E S T I C A L LY A N D 478 M W O V E R S E A S F R O M VA R I O U S F U E L S O U R C E S : Normative Capacity under Management (MW) PPA Tenure Return Profile 4,150 Long term Bid-based Category Total (MW) 8,805 Thermal – Coal / Oil / Gas Gujarat Mumbai Jharkhand Jharkhand Mundra Mumbai Maithon Jojobera 930 [additional 500 MW capacity (Unit #6) is classified as assets held for sale] 1,050 547 Power generation Over the past decade, we have increased our generation capacity by almost five-fold. Currently, the majority of our generation comes from coal-based thermal power plants. In an endeavour to drive resource conservation and increase sustainability of our business, we are focusing more on energy efficiency, renewable energy, and a shift in fuel mix towards non-fossil fuel. Furthermore, our Business Continuity and Disaster Management Plan is firmly in place to increase the resilience and reliability of our assets during disaster events and mitigate financial losses, thereby supporting our sustained growth in the sector. ) W M ( y t i c a p a C e v i t a u m u C l 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 100% 80% 60% 40% 20% 0% 9 0 Y F e r o f e B 9 0 Y F 0 1 Y F 1 1 Y F 2 1 Y F 3 1 Y F 4 1 Y F 5 1 Y F 6 1 Y F 7 1 Y F 8 1 Y F 9 1 Y F 0 2 Y F F U E L M I X ( M W ) ( D O M E S T I C + I N T E R N AT I O N A L ) 12,742 MW Total 375 Waste Heat Recovery/ BFG 8,859 Thermal 932 Wind 871 Hydro 1,705 Solar D I S T R I B U T I O N O F I N S TA L L E D C A PA C I T Y ( D O M E S T I C + I N T E R N AT I O N A L ) (%) Odisha Kalinganagar 40 Uttar Pradesh Prayagraj 1980 Rithala (Gas based) Jamshedpur 108 120 Kalinganagar 135 Haldia Bhira Khopoli Bhivpuri 120 300 72 75 Wind Farms 932 1,705 Solar Photovoltaic (PV) Thermal – Waste Heat Recovery Hydro New Delhi Jharkhand Odisha West Bengal Maharashtra Maharashtra Maharashtra Renewables Maharashtra, Gujarat, Madhya Pradesh, Karnataka, Tamil Nadu, Rajasthan, and Andhra Pradesh Andhra Pradesh, Bihar, Delhi, Gujarat, Haryana, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh and Uttarakhand Domestic Total I N T E R N AT I O N A L A S S E T 70% Thermal 70% 30% 42 13% Solar 7% Hydro 7% Wind 3% Waste Heat Recovery/ BFG Fuel Source Thermal – Coal / Oil / Gas Hydro Country Location Normative Capacity under Management (MW) PPA Tenure Return Profile Indonesia Bhutan Zambia Georgia PT Citra Kusuma Perdana Dagachhu Itezhi Tezhi 54 126 120 178 Long term Bilaterally negotiated (captive) Short term Merchant Sale Long term Regulated Long term Regulated International Total Grand Total Medium term Regulated Long term Long term Long term PPA Long term PPA Regulated � Regulated returns � Bilaterally negotiated (captive) Tolling / Fixed tariff Under Platform Management None PPA is being pursued Long term PPA Long term PPA Short term PPA Medium term PPA Bilaterally negotiated (captive) Bilaterally negotiated (captive) Merchant sale and bilateral contracts Regulated 375 447 Long term PPA Feed-in tariff and bid-driven contracts 2,637 Long term PPA Feed-in tariff and bid-driven contracts 12,264 Category Total (MW) 54 246 178 478 12,742 43 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Transmission and distribution Transmission and distribution loss is a cause for concern at Tata Power. Not only does it directly contribute to revenue loss, but it also increases greenhouse gas (GHG) emissions, cost to consumers and may even put public health and safety at risk. To address this, we have steadily enhanced our operational efficiency and reduced technical and commercial losses while expanding our transmission and distribution infrastructure. O U R I N I T I AT I V E S T O R E D U C E T E C H N I C A L & C O M M E R C I A L L O S S P R I M A R I LY F O C U S O N : Process Management Workforce Engagement Infrastructure � Special electricity court for theft and electricity dues � Outsourcing collection of outstanding amounts � Inclusion of ABHA for revenue collection from jhuggi jhopdi clusters � Customer counselling group leading the recovery � Disconnection drives along with zonal staff for recovery � Recovery of Disconnection with Due cases (DW) arrears � Focus on reading and billing quality check � High-revenue customer data analysis � Mass enforcement raids in high-loss areas � Camp connections in slum areas � Optimising revenue billing cycle � Data Analytics – defaulter/ theft prediction � Utilisation of existing lightly loaded feeders through load balancing � Elimination of intermediate voltage ratio in phased manner to reduce technical loss involved in voltage transformation within the grid � Installation of electronic meters and automated meter reading for high-revenue customers � Revision of meter specifications � Increasing payment avenues � SMART metering � Increasing digital payment avenues � Reducing load on heavily loaded feeders and optimising circuit length by utilising new sources, i.e. grids and transformers � Optimising overall DT loss by adding new DTs at load centre to reduce the LT circuit length and for mitigation of overloaded DTs � Replacing sick assets, i.e., PILC cables, sick DTs, tampered service lines and energy meters which are damaged or worn down O U R C U R R E N T T& D P O R T F O L I O Transmission (Regulated) Mumbai Transmission Powerlinks (Joint Venture) Total T&C losses Mumbai Distribution Tata Power Delhi Distribution Tata Power Ajmer Distribution Distribution (Regulated) Mumbai Distribution Licence Delhi Distribution Licence Ajmer Distribution Franchises Total CKM 1,206 2,325 3,531 FY19 0.7% 8.0% 11.2% FY20 1.4% 7.9% 10.0% Consumers (in lakh) as on 31st March, 2020 7.2 17.5 1.5 26.2 O v e r v i e w O u r E m p h a s i s o n V a u e l O u r V a l u e - c r e a t i o n P a r a d g m i S t a t u t o r y R e p o r t s i F n a n c i a l S t a t e m e n t s 44 The Tata Power Company Limited Integrated Annual Report 2019-20 Future ready for smart choices 45 Our Renewables Story T O TA L R E N E WA B L E P O R T F O L I O ( M W ) India has immense Renewable Energy (RE) potential (ground mounted solar: 750 GW; wind: 300 GW and rooftop solar: 210 GW). Solar and wind energy resources could change the dynamics of the power sector. Currently, RE power is cost-competitive to fossil fuel power plants, and a transition from fossil fuel to RE sources is clearly underway. This is further reinforced by India’s commitment at COP21 to reduce its GHG emissions intensity per unit GDP by 33-35% below 2005 levels, by 2030. To meet its commitment, India has set an ambitious target of achieving an installed RE capacity of 175 GW by 2022. The target was further recalibrated in 2019 to 500 GW by 2030, with a set of favourable policies and framework in place which provided a fillip to the renewable industry in India. Realising the potential and importance of RE, Tata Power had commissioned its first wind asset at Supa in Maharashtra in 2001 and its first Solar asset at Mulshi in Maharashtra in 2011. As an environmentally responsible business entity, Tata Power has steadily added renewable assets, both wind and solar, to its portfolio since then. To fast track its commitment to increasing renewables in its portfolio mix, Tata Power in 2016 acquired 1,010 MW of renewable assets of Welspun Energy, one of the largest renewable acquisitions at that time. Currently, with 2,637 MW of operational wind and solar capacity in India, we are the third largest in the RE market. Today, we are adequately equipped to expand our RE footprint in India and select geographies overseas by using our expertise in project design and development, operations, maintenance, asset management, and safety. This expertise is being further leveraged to set operating benchmarks for every RE asset as well as create a robust capacity development pipeline. I N S TA L L E D C A PA C I T Y O F R E N E WA B L E E N E R G Y ‑ 2 , 637 M W FY20 932 FY19 FY18 FY17 932 932 811 1,705 1,393 1,190 935 FY16 623 56 FY15 519 FY14 FY13 487 487 56 30 30 FY12 416 30 FY11 228 4 FY10 218 FY09 FY08 100 100 Wind Solar 1,705 Solar commissioned 700 Under- construction Solar 932 Wind Gujarat | 694 MW Karnataka | 619 MW 100 400 194 569 50 Rajasthan | 550 MW Maharashtra | 422 MW Tamil Nadu | 371 MW Andhra Pradesh | 305 MW 215 150 185 133 50 239 251 120 Madhya Pradesh | 174 MW Uttar Pradesh | 101 MW Bihar | 41 MW Punjab | 36 MW 130 44 1 100 41 205 100 36 Telangana | 15 MW Jharkhand | 5 MW Delhi | 2 MW Uttarakhand | 1 MW 15 5 2 1 Operating solar asset Operating wind asset Under construction solar asset We have developed a strong portfolio of 1,705 MW solar generation capacity across 14 states and a Union territory. The aggregate wind energy capacity stands at 932 MW across seven states as on 31st March 2020. We constantly strive to improve the operational efficiency of our RE power plants to ensure maximum utilisation and increased generation to serve our customers. Few initiatives undertaken were: Currently, five of our renewable projects are registered with the Clean Development Mechanism (CDM) programme of the United Nations Framework Convention on Climate Change (UNFCCC) – one wind project each in Gadag (Karnataka) and Khandke (Maharashtra), two in Saurashtra (Gujarat), and one solar project in Mithapur (Gujarat). In FY20, we traded 1,28,196 Carbon Credits (CERs) from these projects, generating gross revenue of ₹ 6.36 crore. Walwhan Renewable Energy Limited (WREL) has eight CDM registered projects, but no CERs were issued or traded in FY20. � Drone-based thermal imaging to identify underperforming solar assets in large solar fields to reduce generation loss and improve efficiency � Seasonal tilting of solar panels to reduce pointing error and enhance yield from solar PV plants, leading to efficiency improvement by 1-2% Power-up technology is being explored for implementation in FY21 to enhance the power output of wind turbines, as well as e-security integrated with drones 46 47 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 D O M E S T I C S O L A R P V P R E S E N C E ( I N M W ) 1,705 Total 215 Rajasthan 130 Madhya Pradesh 36 Punjab 2 Delhi 569 Karnataka 205 Andhra Pradesh 100 Gujarat 15 Telangana 1 1 251 Tamil Nadu 133 Maharashtra 41 Bihar 5 Jharkhand 1 Uttar Pradesh Haryana Uttarakhand D O M E S T I C W I N D E N E R G Y P R E S E N C E ( I N M W ) 932 Total 185 Rajasthan 50 Karnataka 239 Maharashtra 120 Tami Nadu 44 Madhya Pradesh 194 Gujarat 100 Andhra Pradesh Microgrids – empowering every individual In recent years, grid-electrification coverage and adoption have increased significantly among rural households. However, rural consumers at many places are still deprived of reliable power supply and continues to face outages, load shedding, and voltage fluctuations. These issues inhibit them from taking a grid supply, especially rural enterprises which rely on diesel generators. For these people, affordability is also one of the key barriers to exploiting electric power for economic growth. Keeping those constraints in mind, TP Renewable Microgrid Limited (TPRMG) plans to set up the world’s largest number of decentralised solar microgrids that will position India as the global leader in clean, decentralised, affordable and reliable power supply. We also aim to catalyse a wave of energy-enabled rural economic development driven by micro-entrepreneurs. We have a strategic plan to develop demand for mini and microgrids and set up 10,000 microgrids over the next six years catering to about five million households. Once at scale, TPRMG anticipates supporting 100,000 rural enterprises, creating 10,000 new green jobs, and providing irrigation for over 400,000 local farmers. This venture will also ensure lowering effective electricity costs and carbon footprint and will amplify the Government of India's ongoing campaign to provide electricity to rural areas, unleashing the potential of renewable microgrids to serve households and businesses that suffer from poor reliability and coverage by traditional grid-based power. Tata Power is currently looking at regions in Bihar and Uttar Pradesh, which are power starved or face issues of quality in power supply, for setting up microgrids. Microgrid projects are being executed in the adjoining villages of Muzaffarpur and Samastipur districts in Bihar, and Gonda and Bahraich district in Uttar Pradesh, with 18 microgrids commissioned and charged as on 31st March 2020. Further, we have created a healthy pipeline of 55 microgrid projects covering both the states. The microgrid installations could experience policy and regulatory hurdles, and legal and technological risks. Accordingly, we have identified mitigation measures for the key business risks linked with their wider implementation to ensure that our capacity enhancement is not impacted. O v e r v i e w O u r E m p h a s i s o n V a u e l O u r V a l u e - c r e a t i o n P a r a d g m i S t a t u t o r y R e p o r t s i F n a n c i a l S t a t e m e n t s 48 The Tata Power Company Limited Integrated Annual Report 2019-20 Future ready for smart choices 49 Rooftop Solar Tata Power Solar Systems Limited, TPSSL has been India’s top solar rooftop EPC player since the past six years. Compelling industrial economics, especially for the commercial and segment, favourable government policies, and increased environmental awareness have been the key growth drivers. We serve customers across residential, commercial and industrial segments and institutions. Our approach to rooftop solar can be broadly classified into two categories – own and operate solar rooftop assets under PPA and build rooftop projects for other customers under EPC contract. Our total portfolio is about 421 MW (as on 31st March 2020), of which 28 MW is under PPA. For 29 years, Tata Power, through its solar arm, TPSSL, has been manufacturing cells and modules by focusing on cutting-edge technology and world- class innovation. With over 1.9 GW of modules shipped globally, our cells and modules are recognised for their quality and reliability across the world. We offer bankable tier-1 solar modules to multiple customer segments, with a range of configurations, power outputs and module sizes. TPSSL became the first solar manufacturer in India to achieve the milestone of shipping 1 GW modules worldwide, cementing its position as a leading player in the global PV module manufacturing industry with in-house production capacity of 300 MW cell line and 400 MW module line. EV Charging Infrastructure – towards greener mobility We intend our state-of-the-art and customised EV charging solutions to form the infrastructure backbone for a growing EV ecosystem and provide customers access to this energy- efficient option with ease. Tata Power is a strong supporter of the government's National Electric Mobility Mission. Being part of the Tata Group enables us to derive synergies from other group companies, particularly Tata Motors’ planned roll-out of electric cars. Starting from our first EV charging station set up in Mumbai, we have set up 170 EV charging points across 20 cities including Mumbai, Pune, Delhi, Bengaluru and Hyderabad as on 31st March,2020. We are also located at Tata Motor dealerships and retail outlets of other Tata Group Companies like Croma, Star Bazaar, Titan among others. As part of the customised solution, we have partnered Prakriti E-mobility Solutions, an app-based EV service provider, to provide charging infrastructure and support their EV taxi fleet in Delhi and NCR. As part of the agreement, Tata Power will design, procure, install and manage all charging infrastructure – which will see installation of about 50 charging stations near Delhi airport, Gurgaon and North Delhi. We have also joined hands with Jaguar Land Rover (JLR) to provide end-to-end EV charging solutions. We will facilitate the installation and management of chargers across JLR’s retail network of 27 outlets in 24 cities and at their customers’ residence or office. To enhance our portfolio and strengthen cross-industry partnerships, we have signed a memorandum of understanding for setting up commercial EV charging stations with Hindustan Petroleum Corporation Ltd., Indian Oil Corporation Ltd. and Indraprastha Gas Ltd. W O R L D ’ S L A R G E S T S O L A R R O O F T O P I N S TA L L AT I O N 16 MW at Radha Soami Satsang Beas, Amritsar 19,000 tCO2e offset annually W O R L D ’ S L A R G E S T S O L A R R O O F T O P I N S TA L L AT I O N O N A C R I C K E T S TA D I U M 82.8 kWp at Cricket Club of India, Mumbai 840 tCO2e offset annually W O R L D ’ S L A R G E S T S O L A R C A R P O R T 2.67 MW at Cochin International Airport, Kerala 1,868 tCo2e offset annually Solar Water Pumps Solar water pumps has been a focus area for the Government of India, as it aligns with the twin priorities of agriculture and renewable energy. Through the Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM KUSUM) scheme, the government plans to provide solar water pumps to 3.5 million farmers. Tata Power, with its strong brand, robust products and channel network, is well poised to reach out to rural India. Till date, we have built a portfolio of over 25,000 solar water pumps across India. Highlights of Tata Power’s EV charging infrastructure � Diverse charging standards and specifications � Different EV vehicle categories and manufacturers � Variety of use-case scenarios — EV fleet solutions, commercial spaces and office charging, public charging etc. � Charging infrastructure set up across 20 cities, including Mumbai, Pune, Delhi, Bengaluru and Hyderabad � Smart charging with Tata Power Mobile � Last-mile charging We firmly believe in empowering communities from all walks of life and are in the process of increasing our generation, distribution and transmission portfolio as well as service offerings to journey ahead reliably power and responsibly. For detailed insight into some of our value-added services, please refer to the Social and Relationship Capital on page 70. India’s 50 51 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Intellectual Capital Driving change through innovation India is at a cusp of a huge disruption in the energy market with utilities venturing into IoT and digital services backed by innovation. We, at Tata Power, are prepared to embrace this paradigm shift with our consumer-centric growth plan. These initiatives are a testament to Tata Power being the driving force of tomorrow’s Smart Consumers. Mr. Praveer Sinha, CEO and MD At Tata Power, our intellectual capital primarily consists of our intellectual property such as patents, copyrights, software, rights and licences and our institutional knowledge which is embedded into our business activities. We aspire to become the “lead adopter of technology with a spirit of pioneering and calculated-risk taking,” thus enabling the adoption of advanced and disruptive technologies. This supports the development of products and technological processes through a structured short-, medium- and long-term technological roadmap. Our innovation projects are tailored to address stakeholder needs directly. We further aim to make the distribution grid robust and automated through technological interventions. Our performance in intellectual capital has a significant impact across our capitals as well as internal and external factors that have a certain degree of influence on the Company. INNOVATION COUNCIL Formed in June 2018, first-of-its-kind PE R FO R M A N C E H I G H L I G H T S D 4 CRORE Expenditure on installation of grid-scale, battery-based energy storage system in Rohini, New Delhi, by TPDDL NEW ADDITIONS Solar Rooftop Services, Electric Vehicle infrastructure, Home Automation and Microgrids, SMART meters and battery based energy storage. 52 D 95 CRORE Expenditure on Advance metering infrastructure and installation of smart meters in Radio Frequency (Mesh) network, by TPDDL ADDED EFFORTS 1. Collaborative efforts in TPDDL 2. Setting up the Central Control Room for Renewable Assets (CCRA) Strategic Objectives Material Topics Addressed Key Risks Considered Stakeholder Recommendations Addressed SDGs Focused � Increase in renewables portfolio � Customer relationship � Carbon emission management � Operational efficiency � Innovation in process, service and solutions � Renewables and thermal capacity utilisation � Climate change and business continuity linked risks � Prioritised focus on renewables � Quality and reliability of power supply � Storage and trading of renewable energy, microgrid operations, and electric vehicle charging SBO 3 Scale-up Renewables, Distribution, Services and Energy Solutions businesses SBO 5 Building a customer- centric organisation SBO 6 Leverage digital technology to establish new business model and enhance existing business delivery I M PAC T O N OT H E R C A PI TA L S Our performance in Intellectual Capital has significant influence across all other capitals. This has further been elaborated in this chapter. Natural Capital Impact � Home automation services to minimise electricity consumption � Technological enhancement in business operations to enable waste and emission minimisation � Replacing diesel generator with Multi- Fuel Biomass energy generator at Microgrid plant Social & Relationship Capital Impact � Smart energy meters for rural customers, special invertors etc. � Partnership with various academic institutions and businesses to develop and evaluate new sustainable technologies � Demand side management schemes and offers for end customers for savings in energy cost � Development of small micro enterprises — cost effective energy through microgrids � 1.95 lakh Smart meters installed by TPDDL � Battery energy storage system � Home automations, IoT based solutions leading to energy savings and reduction of bills Intellectual Capital Human Capital Impact � Integration of technologies to digitally augment the efficiency of management systems and processes Financial Capital Impact � Dedicated R&D expenditure towards innovative technologies that ensure cost efficiency and reduce financial loss Manufactured Capital Impact � Innovative technologies to enhance the operational efficiency of our infrastructure and assets � EV charging, microgrids and solar rooftop infrastructure 53 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Tata Power’s journey of Innovation Our Innovation Councils At Tata Power, we are guided by our four pillars of innovation. This enables us to develop projects around our core technological requirements and accordingly evolve a required timeframe. We follow a multi-step process for ideation, innovation and implementation. Pillars of Innovation Technological Initiatives and Progress Mapped Building Innovative Capabilities � Shortlisting of ideas followed by council reviews and periodic review by the MD to track project Assessing Market Needs progress � Through E-hackathon challenges and training programmes to encourage employee participation � Innovation efforts recognised as part of the formal employee PMS � Long-term strategy planning with keen insights into emerging customer needs � Technology roadmap exercise with plotting of short-term, medium-term and long-term (potential) technology developments and identification of areas to focus on Leveraging Partnerships � Partnerships with academic institutions such as IIT Bombay as the industry partner in the Clean Coal Centre to look for long-term solutions to the issue of emissions from the power sector � Clean Energy International Incubation Centre (CEIIC), a joint initiative of the Government of India and Tata Trusts, to encourage and create large-scale sustainable, commercially viable, high quality and affordable solutions Evaluating R&D Projects � Annual Business Planning exercise to track progress and improvement in projects across every division/function � A separate budget is earmarked for undertaking work on innovation projects that have met a certain minimum criterion defined in the stage-gate process Our approach to innovative transformation Our innovation is not solely driven by the management, rather our employees form the foundation of our innovation culture. To build capability on innovation, the first innovation council was formed in June 2018. The members of this council were selected from the brightest of our employees, with a focus on diversity and inclusivity. The 40-member council was subdivided into six teams to push innovative ideas with a strong yet practical outlook towards implementation. The councils have an established objective to meet challenges, improve performance and create an environment of innovation in the organisation. They also give the necessary impetus for follow-through of ideas, culminating in the implementation of shortlisted projects. We also build a baseline of ideas received through various competitions and forums such as Shikhar, ACE, Idea Crucible, Ideation Hackathon and Cleantech. This process involves evaluation and selection of shortlisted ideas for current business priorities. The final investment decisions are made based on Board approval. Innovation Council Members Initial and Shortlisted Ideas Corporate Innovation Council Hydro Innovation Council Trombay Innovation Council T&D Innovation Council 43 21 13 18 75 initial and 8 shortlisted 145 initial and 5 shortlisted 181 initial and 4 shortlisted 21 initial and 6 shortlisted Our Innovation Hub In addition to our innovation councils, we have a single database for the Tata Ideas Platform that integrates the entire employee database for a seamless sign-in process. The introduction of the Innovation Hub provides a go-to site for innovation at Tata Power. Tata Innovation Management System (IMS) provides a platform for posting and tracking ‘blue sky’ ideas and addressing business challenges. This includes Tata Innovista to recognise breakthrough and step-change innovations. Other features are blogs, conversations via @Yammer page, news and updates, repository of intellectual property documents, quick links to the ‘Innovation Council sub-site’ and ‘Tata IMS platform’, and a photo and video gallery. The benefits of having an integrated employee base results into an augmented amount of ideas on these platforms, complemented with diversity and ‘out of the box’ thinking. 54 55 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Our domains for core innovation Our collaborative projects in innovation and CCRA Our R&D expenditure is dedicated towards improving energy efficiency, renewable energy technologies, distributed energy, transmission and distribution technologies, advanced generation technologies and innovative sustainability-related services. Investments towards smart grid technologies such as smart meters, sensors, Internet of Things (IoT) in transmission and distribution aim to make the network more intelligent and efficient. 1. Building on Renewable Energy Technologies 5. Innovative sustainability related services � Grid-injected solar plants, which largest utility owned 1MWp grid-connected rooftop solar plant commissioned in 2010. This received recognition as an innovative approach at Innovista include the � Robots for high rise painting and tunnel inspection � Solar PV panels have been provided to replace diesel generators for 25 telecom towers. Thin film technology is able to overcome shadow effect of nearby structures and can augment power to local grids � Deployed Radio Frequency (RF) mesh canopy in areas of operation and introduced smart meters for customers � Launched IoT-based Smart Consumer Substation, enabled by Tata Communications � Utilisation of drones and pile assessments, thermal open switch yards Image Analytics imaging of PV for coal farms and The Central Control Room for Renewable Assets (CCRA) is currently deployed for 1.2 GW of renewable assets. The CCRA aims to augment upcoming and work-in-progress renewable assets. The monitoring and analysis of production level KPIs involve data acquisition, visualisation and a wide range of analytics. Supplementary to a data repository for renewables, the CCRA also helps improve operational efficiency and reduces downtime. 2. Distributed Energy 6. Technology absorption, adaptation and innovation � Demand response Hot Spot and Energy transition with renewables-based tariff for open access consumers � First SAP ISU implementation in Rajasthan 3. Transmission and distribution technologies � For FY20, installation of Battery Energy Storage System (BESS) – 10 MWh system at Rohini Grid Station � The system addresses: − Peak Load Management − Deviation Settlement Charges − Congestion Management − Asset Life Enhancement − Investment Postponement − Enhancing Solar Grid Capacity − Support to Delhi Metro during exigencies − Implementing multi-fuel power and heat generation systems for rural microgrid applications 4. Driving Energy Efficiency � Demand Side Management Schemes and offers for end customers � These initiatives include: − AC replacement scheme − Super-efficient BLDC fan − LED lighting products − Ground fault neutraliser system in FY20 to help with earth fault without the need of any outage enhancing reliability − Community storage at DT level in FY20, a customised bus arrangement for battery storages to reduce asset stress during peak hours 56 � Launch of web-based digital signage software, enabling self- healing features and a robust client-computing solution. � Comprehensive adaptation of responsive and intuitive User Interface (UI) in multiple home-grown applications such as Training-Information-System-Dashboard, My-Companion- Short Notes and GYAN SANGAM discussion forum. Implementation of E-Security technology to be integrated with drones piloted at Solar PV sites. � 7. Knowledge Based Platforms � Presence of group level knowledge-based platforms such as IdeaLogy, Tata Edge and Tata Innovista. for in-house portals � Launched knowledge-based T P D D L‑ C O L L A B O R AT I V E J O U R N E Y platforms such as: − SHINERGY (platform for registering of improvement projects) − Gyan Sangam (repository for SEEKH sessions organised throughout organisation) − IMS Process Approval and Document Availability − IMS and 6S Audit System − Business Excellence Maturity Index 8. Advanced generation and technologies � Rural microgrids with two pilot projects in Tayabpur and Behlolpur villages of Vaishali District in Bihar to provide affordable power and electricity access in rural areas, funded by Tata Trusts and co-created by TPDDL with the Massachusetts Institute of Technology � 70 households in Tayabpur and 85 households in Behlolpur given electricity connection through prepaid meters, in different packages of 5/12/24 hours 100+ Collaboration Partners 16 Global Funding Agencies 59 24 Industries Institutions 150+ Employee Engagements In order to cater to futuristic and emerging customer requirements, TPDDL has partnered with technology providers, research institutes and funding agencies to build a diverse knowledge base of new products, services and solutions. Collaborations have taken place under specified categories: � Enhancing operational efficiency, especially at the low tension level � Development of low-cost and scalable solutions for the power sector � Employee development and engagement � TPDDL branding At TPDDL, we conduct pilots for establishing Proof of Concept identified (PoC) and validating the business case for all opportunities. The pilots that present a business case are routed through a regulatory approval process and scaled up after obtaining concurrence. Our other Digital Initiatives are described in Management Discussion and Analysis (MD&A) (Page 192-193). 57 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Human Capital Engaged, agile, future ready workforce Once you got the best people, the people who shared our values and ideals, we left them free to act on their own. We do not fetter them. We encourage them and give them opportunities for leadership. J.R.D. Tata Chairman, Tata Sons (1938 – 1991) Our employees are the primary enablers of our vision and are at the core of achieving our organisational objectives. Their passion, dedication and conscientious approach to work is at the crux of our organisational success and operational excellence. Our Human Resource strategy focuses on a shared journey that facilitates continuous growth and development of each of our employees towards achievement of their full potential and thereby enriching their experience at Tata Power. PE R FO R M A N C E H I G H L I G H T S CO-CREATION GYANKOSH YOUTH POWER CONFLUENCE Of HR policies based on regular crystallisation of feedback from employees An e-learning platform for all our employees to enable them to learn at their own pace For new entrants to showcase their talent and accomplishments to fuel their growth in the Company INCREASE IN EMPLOYEE ENGAGEMENT SCORE IN FY20 Overall engagement score increased by 9% to 83% making our score one of the best within the Industry as well as Tata Group LEADERSHIP COMPETENCY MODEL - ASPIRE-MOTIVATE- PERFORM (AMP) A competency building model to create a future ready workforce Strategic Objectives Material Topics Addressed Key Risks Considered Stakeholder Recommendations Addressed SDGs Focused SBO 7 Create an engaged, agile and future ready workforce � Human rights � Training, education and development � Occupational health and safety � Workplace health and safety � Talent and succession � Work-life balance � Appraisal and promotion policy � Remuneration � Equal opportunities for all I M PAC T O N OT H E R C A PI TA L S Our performance in Human Capital has a significant influence across all other capitals. Social & Relationship Capital Impact � Improved employee experience through increased participation in voluntary initiatives of Arpan Natural Capital Impact � Increased awareness and efforts towards environmental conservation through voluntary employee participation Financial Capital Impact � Investments made in training and development for knowledge and skill enhancement of employees Intellectual Capital Impact � Increased employee participation at Tata Innovation forums � Establishment of innovative technologies to ease manual intervention in system procedures Human Capital Manufactured Capital Impact � Exceptional resilience of sites to disasters with our Business Continuity and Disaster Management Plan (BCDMP) � Timely and effective commissioning of projects, sustained operation at benchmark levels due to highly skilled and competent workforce O v e r v i e w O u r E m p h a s i s o n V a u e l O u r V a l u e - c r e a t i o n P a r a d g m i S t a t u t o r y R e p o r t s i F n a n c i a l S t a t e m e n t s 58 The Tata Power Company Limited Integrated Annual Report 2019-20 Future ready for smart choices 59 Our Human Resource strategy To enable employees to perform at their full potential, it is imperative to create a work environment that is collaborative, enriching and fosters a culture of learning and growth. Our HR strategy adopts a multipronged approach touching seven key facets that enable employee development and organisational success. n u i s i t i o t i o n e n c q e t t A d R a l e T n n a Employee Engagement and values The alignment of our employees' individual aspirations with the Company's ideals is a central pivot that enables value generation for our customers, the society and the environment. n a m u H s t h g i R S u Human Resource Management c c P l a e s n s i o n i n n g Diversity H e S a a l t f e h t a y n d Em ployee Welfare Employee Category Senior Management Middle Management Junior Management Workmen** FDA and SE*** Total Contractual Workers Permanent Employees with Disabilities**** Tata Power’s workforce * Tata Power's workforce FY20 Female Male Aged <30 years Aged 30-50 years Aged >50 years 18 60 741 66 49 934 555 3 353 1,048 4,222 1,844 212 7,679 20,350 29 0 3 1,370 118 137 1,628 N/A N/A 137 748 2,914 1,062 113 4,974 N/A N/A 234 357 679 730 11 2,011 N/A N/A Total 371 1,108 4,963 1,910 261 8,613 20,904 32 *NOTE: Includes only manpower numbers of Tata Power, TPREL, CGPL, TPSSL, TPRMG, PTL, WREL, MPL, IEL, TPTCL, TPADL, TERPL, TPCDT, FENR, SED, NELCO, TPDDL **Workmen includes Non-Management Employees ***FDA and SE include employees and supervisory trainees on direct contract with the Company ****Number of permanent employees with disabilities is included in the total workforce strength Employee Engagement at Tata Power Platforms that enhance qualitative employee engagement Our work culture enables continuous dialogue with our employees. We actively listen to their needs, aspirations and ambitions, making their voices heard and their inputs valued, and thereby facilitating an open channel for two way communication. We consciously seek feedback on any organisational changes and keep our employees adequately informed to ensure smooth transition. Unique appraisals for enhanced performance Our Performance Management is a key talent management process that drives a high performance culture and helps create excellence by enabling achievement of organisational plans. All our employees, across all levels, received regular performance appraisal and feedback during the reporting period. The process involves setting the individual’s Key Result Areas (KRAs), which are cascaded from the strategic goals of the organisation, cluster and divisions/ functions. Competency building-AMP Model We consider it equally critical to evaluate the potential of an employee in his/her current role as well as future growth. We define the Key Behavioural Attributes (KBAs) of an employee based on the competencies identified in Tata Power’s new Leadership Competency Model called AMP (Aspire-Motivate-Perform). Recognising the need to evolve Tata Power’s own talent framework that is more fit- for-purpose and more likely to address the business challenges, an in-house exercise was undertaken wherein the competencies were identified which were required for leaders to succeed in the future in the context of Tata Power’s plans while retaining our core. The leadership competency model is the outcome of such research based approach involving the Board Members, MD, CFO and other senior leaders. The AMP model is highly contextual to Tata Power and is a mix of existing and future facing competencies. Employee Engagement Survey Integrating human inspiration with innovation While we formally engage with our employees through the appraisal process, we also encourage them to actively participate in the forums of the Tata Group such as Tata Innoverse and Tata Innovista (annual celebration of innovation in the Tata Group). We also use various innovative strategies to engage with our employees and support their growth within the Company. Some of our key programmes are: � Talent Next : Through this programme, high-performing officers are given the opportunity to showcase their potential to the management and thereby fast track their career progression � Youth Power Confluence : Newly joined cadre/trainees can showcase their talent and exceptional work through this platform to fuel their growth in the Company � Ullas: Through this cultural platform, we enable our employees to showcase their talent � Gyankosh: Tata Power’s e-learning platform provides and development opportunities learning best-in-class for employees We also conduct an annual Employee Engagement Survey (EES) to gain a clear understanding of various aspects of our workforce’s functioning, the engagement level and areas of improvement in work environment. The EES 2020 was conducted by a reputed external partner, Kincentric and focused on understanding the role of three key stakeholders in influencing the work experience-the manager, the senior leadership and the HR. The survey saw a record participation rate of 98% and increase in the overall engagement score by a significant 9%. � Town Hall: Organised regularly to facilitate conversation between employees and senior leaders � Employee Assistance Programme (EAP): Provides professional counselling services such as 24/7 e-counselling, telephonic, face-to-face counselling, wellness coaching, online health risk assessment tools, self-help library/self-assessment tests, e-workshops, among others. This programme also helps deal with issues such as personal development, work, relationships and marriage, parenting, physical and emotional wellness 60 61 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Talent acquisition and retention Building and retaining strong employee skills Technological disruptions are redefining work paradigms across industries. At Tata Power, we empower our employees with requisite skill-sets to help them keep pace with these developments. We provide employees with various channels to express their creative energies. While we provide avenues for employees to tap into their innate talents, we enable their growth and development in new areas as well as invest in their health and safety. The training needs assessment and identification process for both functional and behaviour skillsets factors in: 1. Business Strategy Plans 2. Individual Development Needs and are derived development Training the needs organisation's growth plans, core competencies, emerging competencies and thrust areas. strategy, from the encompasses learning This needs of all employees which are identified during the 'goal setting' in consultation with their exercise ascertained appraiser. Gaps through Competency Assessment and development needs are arrived at by the People Potential Development System. Functional are 4. Succession Management Development needs are identified for successors (short/medium/long-term) to ensure business continuity. 62 3. Focus Group Needs Training needs are identified through an ongoing dialogue between the Capability Building Team, Business HR Heads and HODs, which captures emerging training and development needs of a Department/Team. Career level transition/ stage linked (work developmental promotion/transfer) for desired needs are employee each outcomes transitioning to a new role. identified for Our training modules and programmes Training needs are also identified at the time of ‘goal setting’ during the appraisal process. Once identified, we impart training and development through various modes such as internal training, external training, focused group training and support for higher education. 9,950 MAN-HOURS Tata Power covered 611 employees through external training programmes and dedicated man-hours Our training modules cover: 1. Safety and job specific skills 2. Housekeeping 3. Contractor Safety Code of Conduct 4. CMG - documentation training 5. TCOC and POSH sessions 6. Protection and testing of electrical equipment 7. IMS external audit, among others During FY20, we also nominated several employees for external training programmes. These are either open public institutions, leading programmes by agencies, seminars, conferences, certifications, or specialist programmes. Nominees are shortlisted based on their performance in the current role, identified high potential performers, identified successors, technical specialists, etc. Tata Power also supports its officers to pursue higher education to build competencies and prepare them for future roles, as per the Higher Education Sponsorship Programme (HESP) policy. The policy team publishes and updates the list of courses at regular intervals. to pursue An officer may choose higher education through one of the following modes: � Full time: Courses for up to two years on study leave without pay � Part time: Courses for a maximum duration of three years We have covered 142 employees since the launch of this policy Our Work Integrated Learning collaboration in Programme with enables Pilani BITS to get an diploma-holders In FY20, engineering degree. 43 employees were covered under this initiative. Average hours of training per employee in FY20 Employee Category Senior Management Middle Management Junior Management Workmen FDA Contractual All employees and contractual workers Male Female 19.48 24.17 24.47 8.47 4.93 12.20 14.29 19.56 20.63 29.14 6.62 2.61 5.58 18.03 63 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Our permanent employees are also required to attend applicable trainings out of the following 13 Critical Safety Procedure programmes which can be completed through e-learning or classroom-based training platforms. Safety Induction Working at Height Procedure Lockout and Tag Out Procedure Excavation Safety (Shoring and Sloping) Procedure Confined Space Entry Procedure Scaffold Safety Procedure Work Permit Procedure Office Safety Defensive Driving Heavy Equipment Movement Procedure Mobile Crane Safety Procedure Job Safety Analysis Procedure Electrical Safety Procedure targets for each of For enhanced engagement with safety-linked themes, we set safety- related the operational sites and entrust the responsibility of achieving them with the top management of the site. This infuses accountability in our safety management system and encourages managers to make dedicated efforts to drive the safety agenda. Permanent Employees Safety Induction Training Safety Capability Training Casual/ Temporary/ Contractual Employees Safety Induction Training Safety Capability Training 9,744 man-hours 82,532 man-hours 5,82,644 man-hours 2,35,800 man-hours O v e r v i e w O u r E m p h a s i s o n V a u e l O u r V a l u e - c r e a t i o n P a r a d g m i S t a t u t o r y R e p o r t s i F n a n c i a l S t a t e m e n t s Nurturing future leaders In order to have a secure pipeline of leaders to guide the Company towards further growth, we actively in providing dedicated training for leadership development. In addition, we sponsor consistently high performing leaders and managers in a critical role to open programmes at globally recognised institutions such as Harvard, Wharton and INSEAD. In FY20, we nominated one high performer for the Leadership Vanguard – Exchange Programme with Xynteo Limited. invest We recognise that strong leadership acumen is imperative for business success and strategic growth. Our HR team has conceptualised, designed and launched interventions for Apex and Senior leaders to enable them to achieve their full potential fulfilling organisational objectives. Consequently, towards for top management and senior leaders an Integrated Senior Leaders' Development Program (SLDP) has been designed combining the "Advanced Management Program" at the Indian Institute of Management, Ahmedabad with coaching journey christened "mYCoach". 30 senior leaders participated in a customised niche senior leaders’ development programme, in FY20. We have also devised a leadership development programme, 'Achieving Your Leadership Potential', in collaboration with the Tata Management Training Centre (TMTC). Catering to our high performance officers, this nine-day aspirational programme is delivered in three modules of three days each, with six-week gaps in between by the renowned faculty members of TMTC using a blended learning pedagogy interspersed with action learning projects, including case studies on existing challenges of Tata Power. In FY20, two batches covering 43 participants completed this programme. As a result of these programmes, FY20 saw 96.6% retention of employees in the higher cadre. Safety Linked Training Every employee at Tata Power, is trained and empowered to identify unsafe work environments and make proactive decisions to avoid accidents. We have a strong safety capability building process in place. Once we determine safety-linked training needs, we prepare detailed plans at corporate and divisional levels. Safety training is imparted through classrooms, practical demonstrations and e-learning modules. Our safety-linked training covers: 1. Employee Safety Induction programme 2. Risk exposure-based safety programmes (working at height, electrical safety, lifting and slinging, etc.) 3. Behaviour-based safety programmes 4. General awareness programmes like firefighting, defensive driving and office safety, among others 100% of our contractual employees are trained on various aspects of occupational safety We train our employees to ensure they understand their rights and embrace a proactive safety approach. This takes place through the Tata Power Skill Development Institute (TPSDI) as well as through online modules on safety standards and procedures. The safety capability building of contract workers is integrated in the Contract Safety Management Process. They are trained during their induction and undergo specific trainings based on their area of work. These trainings are also conducted at the TPSDI with various levels of certifications (L1, L2, L3) awarded at the end of the process. In addition to certification training, prior to executing any job, ‘Toolbox Talk’ is conducted at the site through which work related risks and adequate control measures are highlighted once again. 64 Future ready for smart choices 65 The Tata Power Company Limited Integrated Annual Report 2019-20 Our approach towards the protection of human rights At Tata Power, we are committed to uphold the highest standards of human rights aligned to our organisational ethos. We have a dedicated Human Rights Policy, which is aligned to the principles of the International Labour Organisation and United Nations Global Compact. We emphasise � Prohibition of child labour � Prohibition of forced labour � Freedom of association and right to collective bargaining � Protection from discrimination We have a zero-tolerance policy towards child labour and forced labour. Given our commitment to strictly prohibit child labour and forced labour across the value chain, we have been able to build our business in such a way that none of our operations or suppliers breach this Company policy. It is our responsibility to ensure an inclusive work environment where no employee is discriminated on the basis of age, gender, marital status, personal beliefs, religion and spiritual practices, political affiliation, sexual orientation and HIV/AIDS, among other distinctive individual attributes. We also have zero-tolerance towards harassment of any form and in FY20 we addressed all three cases registered for sexual harassment. Further, as of FY20, 22.2% (workmen cadre) of our employees are covered by collective bargaining agreements. We sensitise our employees on various facets of human rights protection, ensuring our vision for the protection of human rights is realised each day at our workplace. The pre-induction training and periodic refresher modules also cover the tenets of soft skill ensuring conducive working conditions and protection of human rights. We ensure that all our security personnel and contractors adhere to the Tata Code of Conduct, which covers detailed aspects of human rights. We have had no instance of violation of any of the human rights and have not received any complaints in this regard, which showcases our commitment towards the protection of human rights. Celebrating equality and diversity at our workforce At Tata Power, we celebrate and strive to enhance the diversity of our workforce. The unique blend of a multitude of perspectives and aspirations is key to infusing operational excellence in our service delivery. We are an equal opportunity employer, and we base our decisions – from talent acquisition to performance appraisal — exclusively on merit, competency and potential. Our policies clearly communicate our commitment to promoting diversity and equality in every aspect of work spanning employment terms, training and performance management. Further, our Gender Diversity and Inclusion Policy empowers women by promoting an inclusive and inspiring work environment. 66 Our Health and Wellness Policy covers an employee and his or her close family, including support for chronic illness. We also provide various benefits to promote diversity. This includes provisions to support employees at various stages of life from higher education, marriage, child rearing preferences, illness and old age. We started providing six months of maternity leave even before it was mandated by law. This is a testament to our organisational ethos of being inclusive and supportive to all our employees' needs. At Tata Power, we are committed to ensuring the all-round well- being of employees. Our Health and Wellness Policy covers an employee’s close family and includes support for chronic illness. Our medical fund provides coverage for medical expenses over and above the employee’s eligibility under the Mediclaim scheme and is an industry benchmark for employee benefits. 20% WOMEN TPDDL leaders on our Board has been recognised amongst India’s Best Workplaces for Women in FY20 *Employee category Senior Management Middle Management Junior Management Trainees Ratio of basic salary of women to men Ratio of total remuneration of women to men 1 : 1.02 1 : 0.91 1 : 1.11 1 : 1 1 : 1.06 1 : 0.92 1 : 1.12 1 : 1 *NOTE: Considers remuneration for employees of Tata Power, TPREL, CGPL, TPSSL, TPRMG, PTL, WREL, MPL, IEL, TPTCL, TPADL, TERPL, TPCDT, FENR only *Employee category Senior Management Middle Management Junior Management Trainees *NOTE: Considers remuneration for employees of SED *Employee category Senior Management Middle Management Junior Management Trainees *NOTE: Considers remuneration for employees of NELCO *Employee category Senior Management Middle Management Junior Management Trainees *NOTE: Considers remuneration for employees of TPDDL Ratio of basic salary of women to men Ratio of total remuneration of women to men 1 : 34.90 1 : 15.20 1 : 5.92 1 : 4.0 1 : 38.03 1 : 15.26 1 : 5.91 1 : 4.0 Ratio of basic salary of women to men Ratio of total remuneration of women to men 1 : 21 1 : 11 1 : 06 N/A 1 : 21 1 : 13 1 : 05 N/A Ratio of basic salary of women to men Ratio of total remuneration of women to men 1 : 1.02 1 : 1.10 1 : 1.16 1 : 1 1 : 0.94 1 : 1.16 1 : 1.18 1 : 1 Employee Category FY20 Attrition Female Male <30 30-50 >50 Total Senior Management Middle Management Junior Management Workmen FDA Total 2 2 83 0 1 88 11 45 220 5 16 297 0 0 194 3 10 207 7 38 106 2 6 159 6 9 3 0 1 19 *NOTE: Includes attrition numbers of Tata Power, TPREL, CGPL, TPSSL, TPRMG, PTL, WREL, MPL, IEL, TPTCL, TPADL, TERPL, TPCDT, FENR, NELCO, TPDDL, SED 13 47 303 5 17 385 67 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Safety First: Our Approach to Achieving Safety Excellence At Tata Power, we believe good health and safety of our people is one of our biggest assets. We strive to safeguard the health and safety of all our stakeholders, including employees, contractors, suppliers and partners who help us realise our organisational goal of excellence in service delivery. We adopt a proactive and pre-emptive approach to occupational health and safety within the organisation. We have mandated use of Personal Protective Equipment (PPE) for all types of operations and maintenance jobs for Generation, Transmission and Distribution utilities. We embrace a beyond- the-curve approach to ensure that we are not just aligned to global best practices but also innovate and ideate to set new benchmarks through our safety-centric culture. We strive to achieve a track record of zero injuries and fatalities. Moreover, we ensure that each employee actively imbibes those safety- linked practices. We have designed a programmatic approach with three key focus areas: organisation and culture, systems and processes, and equipment and facilities. This approach anchors our operational philosophy of “No Harm/No Injuries”. We have aligned all our operations to international safety standards and procedures and have a safety management system that identifies hazards, monitors safety incidents and devises corrective strategies. We have also established a Business Continuity and Disaster Management Plan (BCDMP) to make our sites resilient to natural and manmade disasters. Further, we have a Consequence Management Policy that sets out the general approach to managing safety deviations and establishes processes for corrective counselling. standard operating procedures and systems are Our continuously reviewed to enhance their robustness and ensure all our contract workers and suppliers are in compliance with our operational principles of safety. We have designated safety officers, first aid personnel and emergency response teams for each operational site to effectively tackle any adversity. Further aligned to the Indian Factories Act, each operational site has a Central Safety Committee with representation from the major departments. These departments further have divisional sub- committees with representation from the workers. ORGANISATION AND CULTURE "Be Proactive, Be Safe" SYSTEMS AND PROCESSES Tata Power is the first TATA group company to implement the SAP-EHSM platform for Incident reporting S A F E T Y V I S I O N To be a leader in Safety Excellence in the global power and energy business EQUIPMENT AND FACILITIES Adequate supply of Personal Protective Equipments and robust operations and maintenance practices Monitoring Our Safety Performance Close monitoring of our safety performance has helped our safety procedures evolve over the years. Through effective monitoring, we have been able to identify hazard hotspots and avenues for improvement. To monitor safety-linked performance, we maintain records of safety-linked training and incident dashboards. These records are reviewed periodically at the cluster level and by the corporate Employee Health and Safety (EHS) team. All reported incidents are thoroughly investigated using root cause analysis. For high potential, high severity incidents and near-misses, a cross-functional team is formed to investigate causes and identify suitable corrective and preventive actions to avoid recurrence. Our Suraksha mobile app is one such intervention that enables employees conveniently to report unsafe conditions. Description Injuries Occupational disease cases Lost days Man-Hours worked Fatalities Description Injury rate Occupational disease rate Lost day rate Description Injuries Occupational disease cases Lost days Man-Hours worked Fatalities Description Injury rate Occupational disease rate Lost day rate Key safety-linked metrics (permanent employees) Male Employees Female Employees 2 0 68 16,261,937 0 Key safety-linked metrics (permanent employees) Unit per 100 workforce per 100 workforce per 100 workforce 0 0 0 1,774,997 0 Total 0.11 0.00 3.77 Key safety-linked metrics (contract employees) Male Employees Female Employees 6 0 385 48,138,020 0 Key safety-linked metrics (contract employees) Unit per 100 workforce per 100 workforce per 100 workforce 0 0 0 3,450,566 0 Total 0.12 0.00 7.46 We have adopted a SAP-EHSM platform to enable effective incident reporting and investigation. This platform also provides details of audits and inspections. We have developed various innovative means to make it easier for employees to grasp the concepts of a proactive safety approach and participate in the Company’s safety-linked endeavours. In addition, we have digitalised and consolidated our safety management system into a centralised safety communication system and dashboard that showcases KPIs. We have an online Fire Preparedness Index (FPI) that enables communication, monitoring, reviewing and decision-making around fire safety. 68 The Tata Power Company Limited Integrated Annual Report 2019-20 69 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices Social and Relationship Capital Strengthening our communities to build sustainable societies In line with the Tata group ethos, we, at Tata Power, believe in improving the quality of life of our communities and being a neighbour of choice by implementing strategic CSR initiatives. Mr. Praveer Sinha, CEO and MD At Tata Power, we recognise our responsibility towards people and the planet, and thus strive to create long-term social and economic value. This commitment is aligned with the nature of our business and strategy to drive sustainable growth for our customers, suppliers and local communities. PE R FO R M A N C E H I G H L I G H T S 90% 98% CSAT score, Mumbai Distribution, for FY20 CSAT score, Mumbai Transmission, for FY20 27.10 LAKH Beneficiaries covered at Tata Power group level, as against annual target of 22.90 lakh 348 Villages covered under CSR outreach 220 Urban clusters, in 16 states, covered under CSR outreach D 39.97 CRORE Spent on CSR initiatives in FY20 on a consolidated basis EXCELLENCE IN TRAINING & DEVELOPMENT TPSDI honoured at the 6th Global Training & Development Leadership Awards Strategic Objectives Material Topics Addressed Key Risks Considered Stakeholder Recommendations Addressed SDGs Focused � Customer relationship � Demand side management � Cyber security and Data Privacy � Climate Change SBO 4 Focus on sustainability with an intent to attain carbon neutrality SBO 5 Building a customer- centric organisation SBO 6 Leveraging digital technology to enhance business delivery � Quality and reliability of power supply � Improved notifications of disruptions, failures or maintenance ensuring customer satisfaction � Formal supplier assessment to verify ESG performance � Increased awareness for partnering in "Green" initiatives � Ethical business practices � Community involvement � Transparency in business practices � Enhancement of infrastructure for training community members � Safety and security of facilities as well as electricity supply I M PAC T O N OT H E R C A PI TA L S Our performance in Social and Relationship Capital has a significant influence across all other capitals. Natural Capital Impact � Reduction in emissions due to successful demand side management initiatives � Voluntary initiatives leading to improved biodiversity and reduction in waste Intellectual Capital Impact � Focus areas for technology development and service improvement � Cutting-edge energy efficient technologies and “Be Green” initiatives Financial Capital Impact � Increased customer loyalty leading to enhanced business opportunities and revenues � Goodwill among communities around areas of operations increasing viability of project, leading to better financing terms Manufactured Capital Impact � Better customer insights to guide improvements in business efficiency and service offerings � Social licence to build, own and operate new projects leveraging on goodwill built among communities and the Tata brand image Social and Relationship Capital Human Capital Impact � Enhanced employee experience through increased participation in voluntary initiatives 70 70 The Tata Power Company Limited Integrated Annual Report 2019-20 Future ready for smart choices 71 71 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Tata Power’s customer relationship Relationships with our customers play a crucial role in our value-creation journey. The focus of our operations revolves around our statement, “To earn the affection of customers by delivering superior value and superior experience, thereby making them our ambassadors”. We also have a 3D approach to incorporate our ‘Customer Promise’, which is communicated through our Corporate Customer Service Policy. This resonates with our commitment to continuously exceed customer expectations and be the most admired organisation in the power sector. E X TE RNAL LINK | More about Corporate Customer Service Policy Our 3D approach to inculcate ‘customer promise’ Develop Deliver Delight Insights into customer needs Quality products and services Customers with great experience Developing insights into customer needs Caring for our customers We conduct Customer Satisfaction Surveys to systematically measure the satisfaction and dissatisfaction levels of our customers. These surveys are conducted through a third-party market research agency annually across all customer segments, i.e., commercial, industrial and residential. Feedback is captured in detail, collated, analysed and shared with respective Business Heads for implementation to enhance customer satisfaction. Furthermore, this process also enables us to capture customer satisfaction levels on our value-added services like energy conservation measures, energy audits, safety audits, and demand responses. We arrive at our CSAT score by calculating the percentage of customers rating us 2 or higher (on a 5-point scale). Caring for our customers is engrained in our DNA and forms a bedrock of all our business endeavor. It starts with addressing our customers’ data privacy concerns. We have a privacy policy (https://www.tatapower.com/) in place to address concerns about data storage and outline the measures taken to safeguard our customer information. Customers can also submit their complaints or concerns regarding data privacy through our various grievance redressal channels, which are regularly monitored. During the reporting period, we did not receive any complaints regarding customer privacy breach, or leak, theft or loss of customer data. Improving CSAT scores across clusters Our satisfaction score has improved last year due significantly from to targeted initiatives taken by the organisation Mumbai Distribution FY20 FY19 90% 89% Mumbai Transmission FY20 FY19 TPREL FY20 FY19 TPDDL FY20 FY19 98% 85% 87% 82% 95% 94% Average FY20 FY19 92.5% 87.5% We also conduct mandatory annual health check ups. In addition, we ensure health and safety communication for 100% of our products and services through safety signage in and around our substations in customer premises and public places as a continuous procedure. All our product and service categories are assessed for health and safety impacts across the lifecycle of electricity supply from generation to distribution. Safety signages are displayed at prominent locations, including the sub-stations. We also provide appropriate information to market and label our products and services with relevant regulations, laws and codes. For FY20, there have been no incidents of non-compliance with regulations or voluntary codes concerning product information and labelling as well as marketing communication. Valuing Health and Safety of Our Customers With Safety being one of our core ‘SCALE’ values, we extend our value-added services to our key customers to improve their health and well-being as well as create awareness on safety at the workplace. We conducted a safety training for 13 technicians of CRISIL to improve safety skills and practices. We organised a medical camp at the Vitrum Glass Factory, where 105 employees availed medical check-ups and consultation. The camp was customised to include Lung Function Tests specifically for workmen in the glass factory. A similar camp was organised for 85 personnel of Supreme Housing & Hospitality, in association with L. H. Hiranandani Hospital and Titan Eye Plus in Powai. The camps also included additional tests in consultation with doctors for specific ailments. 72 73 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 We earn the affection of customers by delivering superior value and superior experience, thereby making them our ambassadors. Deliver quality products and services In order to enhance value creation with our customers, we are transitioning from a B2B or a B2G towards a B2C enterprise. With unique differentiation as well as value-added services, B2C businesses will enable direct interaction with our customers. Working with customers to improve product and service delivery We customise our product and service delivery according to customer needs (e.g., built an aesthetic substation aligned with the design and architecture of the Mumbai International Airport) and offer customers a combination of power supply sources to minimise costs (e.g., providing solar rooftop EPC solutions to customers who draw power from the distribution grid), among others. We have also created a WhatsApp group with other utilities to swiftly communicate faults and outages. During our interactions with customers, the key issues raised were voltage fluctuations for HV customers, higher tariff and reliability, as well as power quality. Accordingly, technical solutions based on a study conducted by IIT, Mumbai were implemented to reduce voltage fluctuations. We also implemented measures to reduce cost, which was reflected in the reduced tariff in the Multi-Year Tariff (MYT) proposal. Our initiatives to improve product and service delivery Issues/Concerns Initiatives Network reliability � Implemented auto reclosing of high voltage transmission lines with protection modification � Commissioned two 220 kV lines for interconnecting with Adani Electricity Mumbai Limited, in order to improve reliability of power supply to customers fed from Versova and Malad Receiving Stations Availability of lines � Implemented hot line working and carried out hot line washing Tripping of transmission lines due to bird hits Failures and tripping of lines; quality of power � A remote operation of line isolators carried out from SCADA to reduce outage time � Commissioning of new 220 kV Gas Insulated Switchgear at Versova Receiving Station and 125 MVA Transformer at Mahalaxmi Receiving Station to meet load growth � 3,000 bird-repelling contraptions installed on transmission towers � Ensured line patrolling, thermal vision scanning and sensitisation of people regarding hazards due to high voltage transmission lines � Replaced old insulators � Implemented systems to reduce fault level and impact of voltage fluctuations at six Receiving Stations � Old 220 kV Gas Insulated Switchgear at Carnac and Borivali have been replaced with new Gas Insulated Switchgears Voltage fluctuations � Capacitor banks were added at four Receiving Stations Clearances at metro crossings Electrical safety awareness among communities � For Mumbai’s Metro 2A project, installed 18 monopoles for 110 kV Borivali- Malad lines � Tata Power collaborated with SAAD (Social Awareness Advocacy & Development) Foundation as a part of its 'Ghar Ghar Me Jan Jagruti Abhiyan' which involves street plays and interaction with the people in Mumbai, Maharashtra. The initiative aims to sensitise the community about the adoption of safety measures to be taken in the vicinity of transmission lines � It also stressed upon the importance of using ISI marked electrical equipment, among others 74 74 The Tata Power Company Limited Integrated Annual Report 2019-20 75 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Nurturing relationships through transformation In our constant endeavour to transform the power sector, we aim to build our service business comprising distribution, rooftop, microgrids and solar pumps. We have launched several value-added services to improve energy efficiency and drive our sustainability objectives. EV Charging We have made significant impact in developing the EV ecosystem and encouraging EV adoption in India. We are committed to playing a key role in the nation’s transition to electric mobility. In FY20, we partnered with Tata Motors and JLR for developing EV charging infrastructure for their customers and dealers, present in 20 cities across India. In FY20, we launched the Beta version of our software platform and mobile app which enable customers to locate EV charging stations, charge EVs and make bill payments. As on 31st March, 2020 we have installed 170 EV charging points in 20 cities. We expect to expand our network of EV charging points to 700 by 2021. ESCO With the accreditation of Grade 1 ESCO by the Bureau of Energy Efficiency, Government of India, we have been providing energy services for more than 10 years to the Commercial, MSME and Industrial segments. In addition to enabling customers to lower their energy consumption, we provide an entire range of energy efficiency services – from investment grade energy audit to project management, financial support and operation of energy conservation measures. This aids our strategy to reduce wastage of energy, ensure cost efficiency for our consumers by leveraging analytics, Internet of things (IoT) and installing energy-efficient systems such as Waste Heat Recovery. The ESCO vertical also helps to substantially reduce carbon footprint. Home Automation Even with arrangements in place for adequate power, balancing the increasing gap between base load and peak load is very challenging for Discoms. The availability of power is uncertain due to the lack of fuel resources or congestion of the transmission network. This also results in tariff increase for customers to offset higher power purchase cost. To address this problem, we offer an IoT-based Demand Side Management (DSM) solution to both Discoms and customers for efficient management of electricity demand. Our home automation business encourages customers to implement efficient and cost-effective solutions to minimise electricity consumption. We plan to launch the business in Delhi and Mumbai, starting with IoT devices for remote control and monitoring of home appliances like lights, fans, ACs, geysers, etc., through our mobile app, ‘EZ Home’. Rooftop Solar and Other Customised Solutions TPSSL, our solar manufacturing unit, expanded its Rooftop Solar portfolio to 421 MW as on 31st March 2020. We have undertaken awareness campaigns and influencer programmes, and have strengthened our digital presence to expand our outreach and Channel Partner Network. We have also offered other customised solutions to utilise space to generate solar energy. One case in point is our panels on the facades of Dell building in Bengaluru. Our ‘100 city Rooftop Awareness Campaign’ initiated in FY19 aimed to cover 101 cities across Tier I, Tier II and Tier III with a focus on the residential segment. By FY20, we have covered around 94 cities. This campaign creates awareness among customers about the benefits of solar rooftop solutions, leading to greater savings and earning opportunities for customers from idle rooftop spaces. Financing for residential and MSME customers, launch of off-grid products, I-Taps and Floating Solar plants are some of the services we provide. These services also aim to address myriad challenges such as ease of availability, connecting remote areas and unreliable grid connectivity, addressing customer complaints, and generating cost-effective energy. Digitisation and customer satisfaction are at the core of our activities in this business. Our influencer programme has identified 500+ influencers pan- India for reaching out to a larger population base. We also initiated engagement with State Association of Electrical Contractors to get more relevant people in the programme in order to spread the message on Green Energy effectively. Microgrids In India, as on date, around 300 microgrids provide reliable services to rural consumers at affordable costs. At present, the cost of electricity from microgrids is lower than that from DG sets or other alternative sources. With economies of scale, the cost could further reduce, resulting in significant financial benefits for MSME and commercial customers. Rural micro-enterprises like agricultural services, rice husk mills, oil expellers can benefit substantially through reliable and economical supply in this route. Our short-term objective is to strengthen the microgrid and distribution network infrastructure to provide reliable, quality and affordable supply to rural customers. This would augment accessibility for millions. The long-term objective is to create an entire ecosystem to eliminate energy poverty and drive economic development of the community. This is also in sync with the Government of India's continued thrust on providing electricity to rural areas, unlocking the potential of renewable microgrids to serve households and businesses that suffer from inadequate reliability and coverage through traditional grid-based power. 76 77 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Benefits across domains Customers Utility Social Reduces energy expenditure Reduces cost of service Conserves resources Improves productivity Improves operational efficiency Reduces environmental degradation Meets electricity demand Improves customer service Maximises customer welfare Improves value of service Improves value of service Mitigates climate change impact Encourages safe behaviour Reduces capital needs Under the ‘Be Green’ initiative, we offer Mumbai customers an opportunity to purchase energy-efficient appliances at a discount along with extended warranty and doorstep delivery. More than 8,700 such appliances were provided to consumers in FY20 with the Maharashtra Electricity Regulatory Commission (MERC)-approved rebate of ₹ 85 lakh. This led to cumulative energy savings of more than 6,000 MWh. Additionally, 93 customer-owned rooftop solar plants, with 5.4 MWp capacity, were integrated with the grid. For bulk consumers, energy audits are carried out by the Bureau of Energy Efficiency (BEE) accredited auditors to provide actionable recommendations for energy savings. For FY20, energy saving recommendations of more than 3,900 MWh were provided with MERC-approved rebate of ₹ 12 lakh. D 12 LAKH MERC-approved rebate as a result of giving energy saving recommendations of more than 3,900 MWh in FY20 Demand side management Tata Power is a torchbearer in propagating energy conservation and efficiency, which results in substantial benefits for customers. To optimise utilisation of services provided, we proactively engage in Demand Side Management (DSM) initiatives. Together with the utility and customers, along with energy service companies or trade allies, we explore options to increase efficiency of energy utilisation and provide support for implementing appropriate solutions. Our DSM initiatives � DSM appliances programme (ceiling fans/ split ACs/ refrigerators/ LED tube lights) � DSM energy audit programme � Net metering facility for customers with installed Rooftop Solar PV in their premises (within the regulatory framework) � Safety awareness programmes 78 79 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Delight customers with a great experience Customer engagement and feedback At Tata Power, we have numerous touchpoints for customers to raise their queries and concerns as well as a structured process of tracking complaints and ensuring resolution within pre-defined timelines. A mechanism of obtaining feedback post-transaction and upon complaint closure has also been established. Our systematic complaint management process ensures that corrective action is taken on priority basis and the complaint is resolved within 24 hours. We also have an Internal Grievance Redressal Cell, which can be approached if the customer finds the resolution unsatisfactory through the regular channels. All complaints are captured in the SAP-CRM system and are routed to appropriate departments for resolution. The stages of the complaint are also monitored with automated system generated reminders and escalation mechanisms. As of 31st March 2020, there were no customer complaints or consumer cases pending beyond the turnaround time. Our Customer Engagement Platforms � Customer Relation Centre (24/7 support): List https://cp.tatapower.com/sap/ b c /u i 5 _ u i 5/s a p / z t a t a p o w e r s e r v/ i n d e x . h t m l #/ Writetocustomercare/CP available (CRC) on � Email: customercare@tatapower.com � Customer Web Portal: https://cp.tatapower.com/sap/ bc/ui5_ui5/sap/ztatapowerserv/index.html � Customer Support Chatbot: https://cp.tatapower.com/ � Call Centre: 1800-209-5161 / 19123 (Short Code for Mumbai Consumers) � Mobile App: Android: https://apps.apple.com/in/app/ tata-power-mumbai-app/id1479983897 https://play.google.com/store/apps/details?id=com. tatapower.cp.fiori � SMS: Send NS<12 digit Consumer No> to 9223170707; Few more Commercial in nature services available. � WhatsApp: 7045116237 � Twitter: https://twitter.com/TataPower � Facebook: https://www.facebook.com/tatapower/ � Communication by letter: Dharavi Receiving Station, Near Shalimar Industrial Estate, Matunga, Mumbai 400 019 � Microsoft Kaizala: https://aka.ms/tatapower Customer-centric technology development Innovation and digitalisation are vital to sustainable growth in the power sector as well as to address our customers’ key issues and challenges. Technology also provides us a competitive edge by integrating customer centricity in our business activities. From this perspective, we have developed and implemented various initiatives. Revamped Customer Portal Power Rewards VoiceBOT TINA E-Payment All Women Customer Relations Centre WhatsApp Service E-NACH Know Your Energy Consumption (KYEC) Mobile Application QR Code E-Wallets Strategic partnerships with our suppliers Our Responsible Supply Chain Management (RSCM) Policy (https://www.tatapower.com/corporate/policies.aspx) is an important indicator of our commitment to sustainable and responsible growth. It is another indicator of our commitment to uphold key ESG parameters while striving for sustainable and responsible growth. Our suppliers and contractors, both domestic and international, are required to comply with the RSCM policy, covering Environment, Health & Safety, Human Rights, and Ethics & Compliance parameters. We ensure that they adhere to our policies on emission, environmental regulations, provisioning a safe and healthy work environment, and prohibiting child labour, among others. The Tata Code of Conduct also covers our relationships with our stakeholders, including our suppliers. It acts as a guiding principle ensuring fair and transparent selection of suppliers and the criteria that govern their selection. Supply chain management at Tata Power is also governed by a procurement policy which caters to multiple business requirements. These processes are implemented by distinctive structuring of verticals for Fuel Sourcing, Material & Services Procurement, Material Management and Inventory Management. We follow a stringent selection process of business associates based on credentials and past services and/or material quality. For FY20, there were no significant changes to the organisation’s size, structure, ownership or supply chain. Our supplier screening/assessment process We, at Tata Power, recognise that our customers, employees and partners have a subsequent impact on the environment and community. Our ESG evaluation ensures that our suppliers endorse the need for adherence to environmental, social and governance policies that are also consistent with the values of Tata Power. In order to implement this, we make sure that our vendors/contractors/suppliers are on the same platform and undertake sustainable practices in their business activities. Vendors are assessed based on specific ESG parameters with a preferred above average score greater than 50 eligible for onboarding. For FY20, 100% of our new suppliers, with a purchase order (PO) value above ₹ 5 crore were screened through these ESG criteria. These vendors represent 83% of the total value of POs issued in FY20. None of the suppliers were found to have significant actual and/or potential negative social impacts . Sustainable and local sourcing Tata Power practises responsible sourcing with respect to environment, safety, human rights and ethics, apart from economic considerations. Strict conformation labour principles and related laws are mandatory requirements for all our suppliers to qualify. Work method and standards, along with performance of supply and services, form a critical part of our technical evaluation. In addition, safety evaluation and qualification are an integral part for the award and online vendor registration process. to We also take initiatives to enhance skill and capacity development of the local workforce and community that are present in our supply chain. For example, the contract workforce is trained at TPSDI on multiple industrial vocations and safety aspects to enhance their skill and efficiency in work practices. We thus contribute to the capability building of our contractors and their workforce, so that they are adequately trained to safely perform the job along with a higher level of productivity and quality standards. As part of our Affirmative Action (AA), we ensure inclusion of vendors from SC/ST communities in business opportunities, which is driven by the Corporate Contracts department with a single point of contact at the corporate level as well as division/site level. The AA process for vendor enlistment and ordering was primarily deployed to encourage and evolve entrepreneurship skill among the communities and enable them to be part of the ecosystem. 22,858 TPSDI trainees in FY20, with 2,113 unemployed youth, of which 38.6% were from SC/ST communities; 91% of the eligible youth were provided employment opportunities O v e r v i e w O u r E m p h a s i s o n V a u e l O u r V a l u e - c r e a t i o n P a r a d g m i S t a t u t o r y R e p o r t s i F n a n c i a l S t a t e m e n t s 80 The Tata Power Company Limited Integrated Annual Report 2019-20 Future ready for smart choices 81 Strengthening our communities to build sustainable societies At Tata Power, we have always undertaken initiatives with an aim to improve the quality of life and ensure holistic development of our surrounding communities. Our initiatives focus on diverse, community-based projects and interventions in our effort to build a better and sustainable society through the Tata Power Community Development Trust (TPCDT). Our primary goal is to transform the lives of the community through a result-oriented participatory approach. The Company's programmes and impact assessments are guided by our core CSR strategic objectives of: Alignment and action on UNSDG (1, 2, 3, 4, 6, 8) Encouraging employees to commit 15 hours of volunteering per year Excellence in programme management leading to sustainable interventions Learning and benchmarking for driving positive outcomes Fostering sustainable partnership with civil societies, corporates, governments and academia Focus on Affirmative Action to cover at least 30% of overall beneficiaries’ coverage O U R C S R V I S I O N To make Tata Power the neighbour of choice of communities and earning the right to co-exist and co-create by working jointly for social well-being and improvement in quality of life. At Tata Power Group level, ₹ 39.97 crore was spent in FY20 against annual CSR obligation of ₹ 33.30 crore. Contributing towards building a sustainable society Thrust areas CSR Mission 2025 Financial Inclusivity � 100% coverage of marginalised and deprived communities to access government entitlements and schemes Programmes ADHIKAAR Education � 100% enrolment and zero dropout up VIDYA to secondary level � At least 80% academic performance � 100% villages open defecation free with access to basic sanitation � 100% immunisation and institutional delivery � 100% access to safe drinking water and irrigation (tanker free villages) � Increase in ground water level to ensure water availability MAMTA SAMMAAN AMRUTDHARA � At least 80% youth gainfully engaged/ placed to address migration � Achieve 5x daily per capita income ($10 against SDG target of $2) DHAAGA ABHA ROSHNI DAKSH Health and Sanitation Water Livelihood and Skill-Building 82 Tata Power’s CSR programmes and impact assessments Our Corporate Social Responsibility policy guides our CSR activities. Feedback on our CSR programmes are incorporated through independent monitoring and evaluation frameworks that have been adopted to ensure refinement of our initiatives. The overall impact of our CSR initiatives is measured through the Community Engagement Index (CEI) tool, which is used to determine engagement levels of various stakeholders across the stages of CSR intervention. The CEI survey conducted in FY19 showed 84% achievement against the score of 82% in the previous year. Additionally, we have also conducted an Independent Social Return on Investment study for three flagship initiatives, and year-on-year trend analysis indicated an increase in return by ₹ 5.04 on every rupee spent (70% improvement on y-o-y basis). The methodology used was based on the global framework of Social Value – The SROI Network, UK. Our CSR initiatives are categorised into five thrust areas through which we also aim to improve the quality of life at the household level. These programmes reach out to 27.10 lakh beneficiaries across 348 villages and 220 urban clusters spanning 15 states. We focus on achieving synergy, scale and simplification for process improvements. We at Tata Power ensure that all our community development projects work with the concept of ‘Leadership with Care’ at our heart, which translates as ‘Care for Community’. 83 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Our CSR initiatives are categorised into five thrust areas through which we also aim to improve the quality of life at the household level. We focus on achieving synergy, scale and simplification for process improvements. Financial inclusivity: ADHIKAAR Financial inclusion forms an essential aspect of our vision to augment inclusive growth. The initiatives under this thrust area are aligned with various government schemes for benefits towards communities below poverty line (BPL). The Adhikaar programme is an interlinked socio-economic and scheme-based initiative that aims to inform, enable and empower marginalised communities. The programme also involves self-help groups (SHGs). B E N E F I T S 3.12 LAKH Beneficiaries in FY20 84 Education: VIDYA For FY20, our first objective was to encourage enrolment and increase our reach to rural and urban schools in locations and communities near our operations. Our second objective aimed to control and, improve the quality of academics in rural and urban schools, primarily in slum areas and locations of our operations. To ensure qualitative implementation of our initiatives, our projects are partnered with various NGOs that work on interventions in this area. Our employees also participate in numerous projects and interventions. Under this thrust area, our initiatives include: � Digital learning � Teachers’ training � Academic coaching and counselling up to primary level � Stakeholder sensitisation The Vidya initiative focuses on remedial coaching for school children as well as digital education and training of teachers. This has also strengthened the transformation of school management committees. APP-BASED Learning B E N E F I T S 60% Improvement in academic performance 2.68 LAKH Beneficiaries in Education in FY20 Case Study of Tata Power’s Education Impact Amit saw something interesting happening in 8th grade. One of Tata Power’s volunteers was teaching electrical circuits. He listened to the entire session, and during class break, requested the resource person to explain it to him again. After a month, he came up with a speed boat that runs on a motor and uses a plastic bottle head as its propeller. 85 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Health and Sanitation: MAMTA & SAMMAAN We, at Tata Power, aim to improve the level of immunisation, improve access increase health awareness as well as to government health services. Our initiatives are carried forward through partnerships with NGOs and government health machineries for communicating behavioural change, community mobilisation and spreading awareness on mother and child healthcare. Under this thrust area, our initiatives include: � MAMTA – Maternal and child health � SAMMAAN – Health and sanitation Tata Power was recognised for promoting maternal and child health initiatives as part of the World Breastfeeding Week (August 2019) by the World Agency on Breastfeeding Alliance (WABA). We also observed the National Nutrition Week across locations at Anganwadi centres for promoting local food models. B E N E F I T S 12,000+ 5.41 LAKH Sanitation units (household toilets) built through government partnership; behaviour change communication sessions held for usage Beneficiaries under Behavior Change Communication (BCC) maternal and child health and integrated health care Community Led Total Sanitation (CLTS) CLTS is a behavioural change programme that follows an integrated approach to enabling and sustaining an open defecation free (ODF) status in villages. It focuses on behavioural change and community mobilisation, rather than on hardware/ monetary support/subsidy approach. It brings about a change in the community thought process to analyse their sanitation and waste situation to influence collective decision-making and stop open defecation. Awareness is increased through sensitisation and strong messages on the negative outcomes and ill impacts of open defecation and unhygienic living conditions. This is communicated through art, street plays, storytelling as well as capacity building for masons. Water: AMRUTDHARA Tata Power aims to improve service delivery through integrated development of water conservation. Our initiatives include innovation in irrigation practices across the farming sector as well as sustainable drinking water management systems. Water initiatives are often carried out through partnerships with various government schemes, thereby increasing our reach. Our CSR programme has adopted a dual approach to address water availability for drinking and household purposes. It also aims to undertake demand and supply-side management for agriculture through Participatory Ground Water Management (PGWM) and efficient use of water through innovative conservation techniques. The PGWM system deals with water management and supply with programmes to harvest rainwater and maintain water level, which is scaled across eight locations in seven states. We utilised funds worth ₹ 2.5 crore from NABARD and Win Watsan Foundation to demonstrate PGWM at the Kankavati Sandstone Aquifer of coastal Kutch in collaboration with ACT, Coastal Gujarat Power Limited (CGPL), and Geo Science Services (GSS). B E N E F I T S 32.59 LAKH 11.85 LAKH Cubic metres increase in ground water through recharging techniques Beneficiaries covered under PGWM and drinking water initiatives INCREASED STRATEGIC Community and youth knowledge of geo- hydrological knowhow Use of water by farmers with a strong scientific basis and ecologically sensitive methods PGWM Won Bronze medal in Asian Customer Engagement Forum (ACEF) CSR excellence Award in 2019 Case study of transformation Water initiatives at Ahmednagar resulted in sustainable impact and ground water availability enhancement in collaboration with NABARD funding of ₹ 1.25 crore for four years. The impact and benefit spanned four villages of Agadgaon, Devgaon, Ranjni, and Mehekari. Water availability was ensured throughout the year to make tanker free villages and 250 hectares of land was covered as catchment area. 86 87 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Livelihood and skill-building Our objectives under this programme include microenterprise- based capacity building initiatives, income generation training for women, and income generation for self-help groups (SHGs). Another important aspect is imparting and facilitating vocational skills and training to youth as well as building social development and leadership skills among women on various governance aspects. We have taken a collaborative approach with our partners to help augment income generation. B E N E F I T S 1.63 LAKH Beneficiaries as part of our outreach in FY20 Under this thrust area, our initiatives include: � SAMRIDDHI – livelihood (farm and non-farm) for farmers/fishermen � ABHA – Skill building for women � DAKSH – Skill building for youth � ROSHNI – SHG formation and strengthening � DHAAGA – Garment and handicraft making � POWER OF SPORTS – Sports is a women-based micro-enterprise Initiative in focus: DHAAGA Dhaaga initiative of Tata Power. This initiative has led to the promotion of local talent and conservation of traditional art form. It also facilitates skilling for garment and handicraft making to augment household income. The Rabari women artisan and tribal Santhal women of Gujarat and Jharkhand, respectively, are engaged in this initiative. We also launched Dhaaga retail outlets in November 2019 in Delhi and Pune and formed market Indian Hotels, Tata Motors, Amar Kutir Society, Kalaraksha, and other corporate offices. We have augmented the outreach digitally via Amazon Saheli and the Dhaaga Instagram page. linkages with Okhai Initiative in focus: ABHA Abha is an initiative to encourage skill development and empowerment for girls through the ‘earn while you learn’ approach in JJ clusters of Delhi. The initiative covers 2,246 beneficiaries in collaboration with the UNDP and Urban Clap across Maharashtra and Delhi. Under Abha, we have established: � 300 Women Literacy Centres (WLC) covering 25,000+ women Maternal and Child Health � 24 vocational centres (Roshni) for women empowerment in Delhi, Maharashtra and Jharkhand. � A Maha E-Seva centre for inclusivity (government scheme linkages) � Maternal child health sessions by ASHA workers � Paper bag making, beautician courses and tailoring sessions for income augmentation Initiative in focus: DAKSH The initiative aims to augment skill building among the unskilled youth who represent a substantial number of dropouts. Various vocational courses such as beauticians, industrial trading and nursing, among others, are imparted. Daksh covers 11 locations primarily focusing on girl trainees. Post-training placement is at 80% with an average salary of ₹ 8,000 - ₹ 10,000 a month. 80% Placed post training with an average monthly salary of ₹ 8,000-10,000 I M PA C T C R E AT E D D 60 LAKH Order value generated by Dhaaga in FY20 50+ Exhibitions across Delhi, Mumbai, Bengaluru, Pune, Thane and Kolkata D 20.92 LAKH Revenue generated in FY20 DHAAGA Won gold medal in Asian Customer Engagement Forum (ACEF) CSR excellence award in 2019 Women Skilling Integrated Approach Women Literacy Centres Financial Inclusivity Remedial Coaching E-Seva: Linkage to Govt Schemes Abha Centre for Skilling-Delhi WLC Centres- Delhi initiative creates opportunities Initiative in focus: SAMRIDDHI The for communities, particularly farmers, to build assets, adopt new livelihoods and seek new opportunities for themselves and their families. These opportunities are provided through agricultural practices and employability for farmers and fishermen. Delight Mushroom and X-Compost address farm-based livelihoods. The objective of Delight Mushroom is to increase mushroom cultivation. The objective of X-Compost is to empower farmers and SHGs by scaling up vermicompost practices for better agri yield. With focus on skill building to meet job market needs, promoting sustainable agriculture and fishery practices, and channelling energy through sports, the initiative has had significant beneficial impact on the livelihood of youth, farmers and fishermen. D 8,000 Average rise in monthly income of farmers/fishermen 88 89 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Livelihood and skill-building Initiative in focus: Tata Power Skill Development Institute (TPSDI) TPSDI helps develop employable skills, especially in the power and allied sectors. It also aims to address the skill gap faced by the Indian power sector. The institute provides modular training and certifications. TPSDI operates five training centres and has trained 40,000+ youth on various trades with safety and soft skills as an integral part of the modules. In alignment with the programme’s vision, we launched TPSDI Skills on Wheels to make skill training accessible to people and provide Recognition for Prior Learning (RPL), Motor Rewinding, and Solar Skills, among others. A paradigm shift in power sector skilling: ABHA at TPSDI A special initiative of TPSDI is to enhance employability of women. Currently, training is provided on 10 trades such as domestic wiring, power systems, solar skills, among others. More than 75% women trainees opt for higher education. More than 300 women were trained under this initiative, enabling them to generate a monthly income of ₹ 8,000 on average. TCS – Tata Power Youth Employability Programme This is a collaborative effort between TCS and Tata Power. The programme aims to increase employability of unemployed youth in organised sectors. The training covers soft skills, business communication and etiquette. On completion, the trainees undergo a written test, and those qualifying go through three rounds of interview with the HR department of TCS, Kolkata. Further, they are then directly placed in the BPS/KPO services of TCS. The programme was started in Naraj Marthapur and is now available in Maithon and Kalinganagar. ISO 29990:2010 HONOURED Certification awarded to TPSDI by the Bureau Veritas, a certification body accredited by the National Accreditation Board At the 6th Global Training and Development Leadership Awards for ‘Excellence in Training & Development’ In a free enterprise, the community is not just another stakeholder in business, but is in fact the very purpose of its existence. Jamsetji Tata, Chairman, Tata Sons (1868 – 1904) ISO 9001:2015 Certification awarded to TPSDI by the Bureau Veritas, a certification body accredited by the National Accreditation Board 90 Initiative in focus: Maval Dairy To support women empowerment, we established an all women dairy-based enterprise with about 1,500 members from 26 villages of Maval. The Dairy 10000 LPD Plant was successfully commissioned is Maharashtra’s first and India’s second all women dairy farm. We are now scaling the membership base to 3,000 across 41 villages. The dairy provides 1 lakh litres of bulk supply with a turnover of around ₹ 1 crore. in December 2019. It Initiative in focus: Creating employability through microgrids The programme primarily targets micro-entrepreneurs to sustain demand for microgrids. Teaming up with the Rockefeller Foundation, we set up Tata Power Renewable Microgrid Limited (TPRMG) to enable access to reliable and renewable electricity for 25 million Indians. On an average, two micro-entrepreneurs with two associates each will be supported by our proposed microgrid of 30 kW. With 10,000 microgrids, 5,000 micro- entrepreneurs will be created, who will, in turn, employ 10,000 associates. To achieve this, adult literacy centres, self-help group centres and vocational training centres are being explored to enable gainful employment. TPRMG’s three-pronged approach to develop capacity On-ground demand creation team � Deploy a demand creation team on ground to work in collaboration with TPRMG team � Work towards mutually agreed targets � Monitor performance and suggest course correction Create long-term demand partner ecosystem � On-board MED partners for different demand activities � Develop capacity of partners to work independently with the TPRMG team Sourcing and training the TPRMG workforce � Create training modules and different delivery mechanisms (online, classroom, on-site) � Engage with NGOs/ foundations for sourcing trained manpower � Training delivery to TPRMG employees for demand creation and operation and maintenance 91 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Our CSR performance Responding to the COVID-19 crisis FY20 coverage of 27.10 beneficiaries target of 22.90 lakh in FY20 against lakh annual Education Financial Inclusivity 1.91 2.68 2.52 3.12 Health and Sanitation 4.29 5.41 Livelihood & Skill Building 0.74 1.63 1.81 2.41 11.63 11.85 22.90 27.10 AA and Others Water Grand Total Annual Target FY20 Achievement FY20 Awareness building on prevention measures Face mask making and distribution through Dhaaga women members Enabling mobility of basic items to villages (water and fodder) Government scheme linked essential items distribution for migrants and vulnerable communities 1,00,000+ Face masks supplied by Dhaaga members People supported with foodgrain (one food packet ensures five meals) 5,000 3,600 Migrant workers surveyed for essential services benefit Cattle supported with 43,000 kgs of uninterrupted fodder supply 3,00,000 30,000 KG People linked with PDS to get 50 kgs of foodgrain Vegetables supplied by SHG members to local ‘mandis’ The following actions were taken to ensure active awareness of our people and help the COVID-19 pandemic: communities during 65,600 1. Awareness generation on social distancing and distribution of hygiene kits to villagers and migrant workers across 13 states 2. Uninterrupted water supply through water ATM run by community 3. Facilitation of 53 Hunger Relief Support Centres to ensure provision of essential items and food packets 4. Two mobile dispensary vans deployed to create awareness among slum clusters 5. Uninterrupted supply of drinking water for transient fishermen and other migrants 6. Coordination with local authorities for converting academic institutes into quarantine and isolation centres 7. Supply and spray of disinfectant in peripheral villages of Jharkhand 8. Distribution of grocery items (flour, salt, sugar, tea, spices, lentils and potatoes) for daily wage workers O v e r v i e w O u r E m p h a s i s o n V a u e l O u r V a l u e - c r e a t i o n P a r a d g m i S t a t u t o r y R e p o r t s i F n a n c i a l S t a t e m e n t s 92 The Tata Power Company Limited Integrated Annual Report 2019-20 Future ready for smart choices 93 Affirmative Action Policy As part of our Affirmative Action (AA) policy, we work with the marginalised and disadvantaged communities. It covers tribal villages, vulnerable children who need care as well as communities in need of protection and improvement in the quality of life. Tata Power works towards upholding rights and entitlements through various initiatives for the socio-economic development of communities. The initiatives under this policy are in addition to the five thrust areas of the CSR programme and focus on the five prime areas of Education, Employability, Employment, Entrepreneurship and Essential Amenities. Stakeholder Engagement for Leveraging Resources Promoting Tribal Education Reaching beyond its neighbourhood, Tata Power implemented an in integrated community empowerment programme Kadachimate village of Jawhar Block (Palghar district). Being primarily a Tribal dominated area with poor development indicators, we undertook the following initiatives: � Designed and executed specific long term and short term interventions to address the needs of 130 families to augment the income of these marginalised communities � Aimed to improve socio-economic indicators and quality of life of people through community participation and building community institutes for self-sustainable growth. This involved promoting formation of village development committees, empowering women through formation of Self- Help Groups and organising youth groups. � Promoted sports development to channelise youth energy and enhance engagement � Conducted employability through local Industrial Training Institutes and Tata Power Skill Development Institute for youth training Organic Farming for Better Yield Mushroom Cultivation for Livelihood � Successfully executed a Public Private Partnership model (Government, Tata Power and Community) for construction of farm ponds 2.41 LAKH Beneficiaries coverage under AA initiatives 24.55% Coverage of beneficiaries achieved in FY20 against target of 18.05% Volunteerism at the heart of our community welfare At Tata Power, we encourage volunteers in our CSR initiatives. We launched an employee volunteering portal, ARPAN, which resulted in a 250% increase in volunteering hours. ARPAN was launched with the objective of providing our employees an avenue to actively participate and contribute to social causes across all locations. FY20 volunteering highlights � Clocked 1.7 lakh volunteering hours � Received five awards at the Tata Group level for promoting volunteering across locations as well as for highest per employee volunteering hours � 86 tonnes of plastic waste were collected by 9800+ volunteers in the SHS campaign � Launched Tree Mittra drive at Dharavi with our customers as well as senior leadership; planted around 10.3 lakh saplings across locations � Adhikaar Champions enrolled 500+ beneficiaries in Health, Right to Food (RTF) campaign, Senior Citizens and Income Certificate schemes � Received National Volunteering Award from iVolunteer in Best Corporate for Promoting Employee Participation in Volunteering category 1.7 LAKH Volunteering hours in FY20 Beyond our thrust areas: Club Enerji The Tata Power Club Enerji, launched 12 years ago, is a sustainability initiative that aims to create awareness among school students on energy and resource conservation. The programme is based on the four-stage model of Educate (sensitise school children about energy conservation practices), Engage (empower energy champions to spread awareness among peers and the community), Enhance (enthuse schools to participate and contribute to Club Enerji initiatives), and Empower (create self-sustaining mini clubs to lead the movement). The initiative also reached out to digital audiences through its website, social media and online module themed ‘Save water’. In FY20, we initiated four new campaigns – ‘I have the Power’, ‘ILiveSimply’, ‘#SwitchOff2SwitchOn’ and 'I Can' – to further the success of Club Enerji among the youth. These campaigns were also promoted on popular social media platforms to reach to a larger section of the targeted audience. Club Enerji in Limelight � Won the highest accolade in the field of innovation – the Edison award � Won gold and silver for the best environmental behaviour change campaign with the new Club Enerji anthem winning award for the best social media campaign � Won an award in the ‘Cause Branding’ category at Global CSR Excellence & Leadership Awards 2019 � Awarded for its website under the ‘digital newsletter category’ at the PRCI (Public Relations Council of India) Excellence awards � Club Enerji along with Tata Power’s customer initiative ‘Be Green’ won an award for ‘Overall Content’ at CMS (Content Marketing Summit) Asia Awards 2019, South Asia Edition 533 26.4 MN 31.8 MN Schools covered under Club Enerji Citizens sensitised Units saved, with a total of 3.64 lakh Energy Champions as well as 4.1 lakh Energy Ambassadors 94 95 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Our accomplishments and recognitions Excellence is at the core of Tata Power’s operations, which has been regularly recognised by the market and industry globally. Tata Power and its subsidiaries have excelled in a range of domains like Health & Safety, Employee Well-being, Gender Diversity, CSR, Quality, Energy Conservation, Risk Management, Procurement, and Skill Training. 1. Tata Power won multiple awards at the ACEF Asian Leaders Forum and Awards ceremony held on 28th September 2019. The awards were won for CSR, Branding and Marketing activities and took home three gold, two silver and one bronze category awards for several of our campaigns such as #ThisIsTATAPower, Tata Power Club Enerji, #SwitchOff2SwitchOn and more 2. Civil & Estate Division of Tata Power won gold at for Quality Concepts International Convention the 2019, Tokyo, Japan 3. TPDDL has been recognised amongst India's Top 75 15. Tata Power won two awards - the 'Best Risk Management Framework & Systems - Power' and 'Business Continuity' – the 5th Edition of The India Risk Management Awards 2019 16. Tata Power won two awards at the 58th Annual Association of Business Communicators of India Awards 17. Tata Power won twin honours at the Central Board of Irrigation and Power (CBIP) Awards, 2019 18. Tata Power won the prestigious Global Edison Awards under "Social Innovation (Social Energy Solutions)" category for its 'Club Enerji - #SwitchOff2SwitchOn' campaign Workplaces for Women 2019 19. Tata Power was ranked as One of India's Most Respected Companies by Business World 20. Coastal Gujarat Private Limited awarded Environment Excellence Award by the Indian Chamber of Commerce 4. Tata Power's Chief Sustainability Officer, Shalini Singh, named Asia's Top Sustainability Superwoman for 2019 5. Tata Power was awarded at the 10th CII ENCON Awards for energy conservation 6. Tata Power was awarded for 'Procurement Excellence' at SAP ARIBA Customer Success Day, Mumbai 7. Tata Power was honoured with The CSR Journal Excellence Award for Education & Skill Training 8. Tata Power's Mumbai Distribution team won the theme of "Digitisation" Practices in the sector of " Services" at the 7th CII National Excellence Practice Competition 2019 9. Tata Power won the platinum award for Occupational Health & Safety from the Indian Chamber of Commerce 10. Directorate of Vocational Education & Training, Government of Maharashtra felicitated Tata Power for its efforts in vocational education and training 11. Tata Power recognised for addressing challenges of open defecation by Government of Netherlands 12. TPSDI was honoured at the 6th Global Training & Development Leadership Awards for 'Excellence in Training & Development' 13. Tata Power won two awards at the Global CSR Excellence & Leadership Awards 2019 14. Tata Power was ranked among the top 10 companies in 2019’s Indian Corporate Governance Scorecard, which is developed jointly by BSE Limited, the International Finance Corporation and Institutional Investor Advisory Services India Limited (IiAS), with the financial support of the Government of Japan 96 21. TPSSL won the Gold Award for “Rooftop Solar EPC Company of the year” at the India Rooftop Solar Congress 2020 22. “Best asset management team - EPC "Utility Award" given to Tata Power Solar at the RE Asset Management Awards 2020 23. TPSSL was adjudged No. 1 Rooftop EPC Company six times in a row by BTI, a leading cleantech consulting and knowledge services provider 24. Tata Power was recognised as the Best Corporate in Promoting Employee Volunteering at National Volunteer Conclave, organised by iVolunteer, a national platform for promoting volunteering. It also bagged five awards at Tata Group Volunteering Recognition platform 97 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Natural Capital Leading the New Energy World Sustainability being our core philosophy, Tata Power leads the way in generation of non-emitting sources of energy that provide low-cost electricity and help reduce carbon emissions. With a 30% clean energy portfolio, aiming to be 50-60% by 2025, Tata Power comprises the entire gamut of alternate sources to power the world. Mr. Praveer Sinha, CEO and MD strongly believes resource conservation, energy in Tata Power efficiency, habitat protection and enrichment and development of local communities in and around its areas of operations. We are working to set standards in the development and implementation of cutting-edge eco-friendly technologies and processes for reducing our carbon footprint. This effort is augmented by collaboration with policymakers and regulators to standardise technology, strengthen the renewable energy portfolio, accelerate the development of cost-effective energy-efficient programmes while managing consumer demand for electricity. We understand that we must function in partnership with our stakeholders to make significant progress on our strategic objectives and grow sustainably. Our track record of over a century of innovation and leadership in the energy industry gives us confidence to find ways that address sustainability issues in a manner that will deliver benefits to our customers, shareholders and society. PE R FO R M A N C E H I G H L I G H T S 100% Fly ash utilisation in all thermal plants as per applicable guidelines 10 .3 LAKH 0.681 tCO2e/MWh Saplings planted in FY20 Carbon intensity achieved in FY20 Strategic Objectives Material Topics Addressed Key Risks Considered Stakeholder Recommendations Addressed SDGs Focused SBO 4 Focus on sustainability with an intent to attain carbon neutrality � Carbon emission management � Waste management � Resource availability � Biodiversity � Climate change linked “transitional risks” due to enforcement of mitigation measures, e.g., emission caps � Resource scarcity, e.g., fuel, water � Increased disclosure on Environment, Social and Governance (ESG) performance � Increased disclosure on environment aspects � Reduce depletion and pollution of natural resources from business activities � Climate change awareness and alignment to NDC I M PAC T O N OT H E R C A PI TA L S Our performance in Natural Capital has a significant influence across all other capitals. Social & Relationship Capital Impact � Improved health and well-being due to reduced pollution � Improved water security � Reduction of carbon footprint leading to cleaner environment � Mitigating impacts of climate change � Rural electrification through microgrids, delivering unique customer experience by leveraging technology as well as social engagement leading to creation of entire ecosystem Intellectual Capital Impact � Opportunities to improve operational efficiency of thermal plants to reduce emissions and stress on resources � Innovation to maximise efficiency of wind and solar plants � Innovative low cost yet reliable product such as Smart energy meter, multi-fuel biomass energy generator etc. Financial Capital Impact � Difficulty in financing thermal assets with capital moving to renewables � Distribution companies avoiding long-term PPAs for thermal assets Natural Capital Manufactured Capital Impact � Installation of pollution control and energy efficient equipment � Gradually phasing out our thermal assets � Opportunity for expanding portfolio in renewables-linked services, renewables and new energy efficient businesses Human Capital Impact � Opportunities to volunteer for initiatives to improve the environment and bio- diversity, enabling a sense of togetherness in the organisation O v e r v i e w O u r E m p h a s i s o n V a u e l O u r V a l u e - c r e a t i o n P a r a d g m i S t a t u t o r y R e p o r t s i F n a n c i a l S t a t e m e n t s 98 The Tata Power Company Limited Integrated Annual Report 2019-20 Future ready for smart choices 99 Since the start of the Industrial Revolution, our planet’s natural equilibrium has been progressively disturbed which, among other factors has accelerated the global warming process, restricted natural habitats and put a strain on available resources. This will impact our future generations in ways that will be hard to mitigate if we do not act and continue business as usual. As a responsible member of the society, Tata Power is committed to play a leadership role in combating adverse climate change while achieving sustainable growth. We are aligning our interventions with the United Nations Sustainable Development Goals (SDGs) and India’s Nationally Determined Contributions to translate the world's needs and ambitions into sustainable business solutions. These solutions will enable us to better manage our risks, anticipate consumer demand, build positions in growth markets, secure access to needed resources, and strengthen our supply chains, while moving towards a sustainable and inclusive development path. SDGs. This covers environmental, operational, innovation or technology-linked, and growth-related parameters for our operating divisions and supporting functions. The dashboard includes key performance indicators from the erstwhile Green Manufacturing Index (GMI). Tata Power has a dedicated Environmental Policy, along with policies on energy conservation, sustainability, e-waste management etc. These policies encourage the Company to conserve resources, reduce environmental impact, seek to enhance awareness among employees and make business decisions. We are fully compliant with prescribed permissible limits as per the Central Pollution Control Board (CPCB) and respective state pollution control boards (SPCBs) for air emissions, effluent discharge, and solid and hazardous waste generation and disposal. In addition to the statutory parameters, the beyond compliance parameters, like CO2 intensity, efficiency of the operating plant, water conservation and waste recycling are also monitored. Embodying this spirit, we have introduced the SDG dashboard for monitoring business-related parameters on four prioritised 100 The Tata Power Company Limited Integrated Annual Report 2019-20 Our efforts at reducing emissions Emission management The impact of pollution from burning fossil fuels are being keenly felt across the globe. To mitigate the impact, Tata Power is in the process of transitioning to less-polluting sources of energy with minimal adverse impact on climate change and biodiversity. We are steadily building up our green portfolio. The acquisition of Welspun Energy (1,010 MW) in 2016 was a step in this direction. We are also developing an exit plan to phase out our existing thermal power plants and have pledged not to pursue greenfield or brownfield projects in that sector. An increased share of renewables in the total energy portfolio, coupled with increased energy efficiency, is projected to consistently reduce our total CO2 emission intensity in the near future. S U M M A R Y O F G H G E M I S S I O N S ( S C O P E 1, S C O P E 2 A N D S C O P E 3) Description Scope I (tCO2e) Scope II (tCO2e) Scope III (tCO2e)* Total Unit 34,952,981 22,051 1,226 34,976,258 *The source of emission factors used for the calculation of Scope III emissions is IPCC tool version 2.6. Along with GHG emissions, release of air pollutants is a major source of concern for our stakeholders. While the former has long-term impacts on our climate, the latter has immediate health impacts for our community, leading to acute and chronic respiratory ailments as well as other serious health disorders. We aim to control air pollution at source by utilising efficient generation technology, efficient controllers and tall stacks for wider dispersal. Measures undertaken to control air pollution: � Improved efficiency of boilers by implementing sub-critical technology at Trombay, Jojobera and Maithon units, while CGPL became the first plant in India to implement super- critical technology � Use of bag filters to minimise dust at coal junction towers and bunker galleries � Use of low-ash coal and electrostatic precipitators to reduce PM10 and PM2.5 emissions � Adopted seawater-based Flue Gas Desulphurisation (FGD) at Trombay unit for SO2 control, predating government stipulation F O U R M A J O R T H E R M A L P O W E R P L A N T S — J O J O B E R A , T R O M B AY, C G P L A N D M A I T H O N Description Particulate Matter (PM) Oxides of Nitrogen (NOx) Oxides of Sulphur (SOx) Unit 4,254 MT 76,105 MT 111,553 MT 101 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices A U X E N E R G Y C O N S U M E D To further achieve operational excellence, several initiatives have been planned or already commissioned to enhance the efficiency of our power plants. Improving operational efficiency Energy consumption In the present scenario of deteriorating climate conditions, energy conservation is an effective tool towards the mitigation of CO2 emissions. We, at Tata Power, believe that energy conservation is the most economical solution to energy shortages faced by India. Tata Power strives to be efficient in its operations by utilising auxiliary energy conservatively and installing energy efficient devices. Our energy-saving initiatives in generation � Switchover to Variable Frequency Drive from constant large pumps across various power in speed drive plants operated by us � Standardising AC temperatures to 24°C � Replacing electric water heaters with solar water heaters at canteens � Solar-based LED lighting in selected areas, including streets � EVs for movement within plant premises Currently, Trombay leads the way in least auxiliary (aux) energy consumption among thermal power plants. CGPL Maithon Trombay Jojobera 7.7 5.9 5.4 9.9 IEL (Powerhouse 6) 6.9 IEL-Kalinganagar 9.2 Haldia Hydro 7.9 1.7 0.0 2.0 4.0 6.0 8.0 10.0 12.0 % of Total Energy Generated Initiatives implemented in Trombay to optimise auxiliary consumption: � Arresting air infiltration and replacing RAPH seals and baskets at Unit 8 3,350,469 MWh Total auxiliary energy consumed in FY20 � Refurbishing cartridge of BFP 8C main pump � Reducing pressure set point for air compressors at Unit 5 and Unit 8 and optimising usage of non-essential air M A I T H O N P O W E R L I M I T E D ( T H E R M A L ) J O J O B E R A ( T H E R M A L ) Integration study and minimum Based on System parameters required for reliable full load operation of the plant, Condensate Extraction Pump (CEP) de-staging assembly has been incorporated at Maithon Power Limited, with a view to achieve the best possible auxiliary power reduction, without affecting the reliability of the plant operation. Auxiliary power saving by CEP de-staging with 90% station availability was about 1.58 MUs for FY20. During winter, under favourable weather conditions and low Plant Load Factor, we established an interconnection at the Circulating Water (CW) system. This enabled us to stop one CW pump, which saved auxiliary power without affecting the required vacuum for the unit. In FY20, 0.60 MUs of auxiliary power was saved through this approach. K A L I N G A N A G A R ( T H E R M A L ) K O D I H A L L I ( S O L A R P V ) A Robot has been deployed to clean solar panels, which helped bring down operating expenses, and increase generation efficiency of the solar plant. I Y Y E R M A L A I ( S O L A R P V ) In the monsoon season, isolated modules and strings caused ground faults leading to 0.42 GWh of generation loss, notwithstanding the major steps taken to correct it. In FY20, re-conduiting of cables was done to avoid increase generation. Around ground 0.42 MUs of generation loss was avoided in FY20 by re-conduiting the cables faults and Energy performance of HT drives was improved by undertaking CW interconnection, optimisation of boiler feed pump during partial load, optimisation of cooling tower fans during winter and night, reduction in feed water header pressure, etc. C O A S TA L G U J A R AT P O W E R L I M I T E D ( T H E R M A L ) VFD for Condensate Extraction Pump (CEP) Variable Frequency Drive (VFD) for CEP was installed to achieve reduction in Auxiliary Power by decreasing the frequency of the pump below design considerations and keeping deaerator control in open condition. In FY20, 11.74 MUs of auxiliary power was saved through this initiative, reducing CGPL’s total auxiliary consumption by 0.04%. Reduction of clean up cycle time The clean-up process at start-up was reviewed and benchmarked with other utilities. Major recommendations were implemented in the area of clean-up process, as well as operational and chemistry aspect of start-ups. These measures reduced auxiliary consumption by 0.2 MUs and saved 1,000 m3 of De-mineralised (DM) water in FY20. Improvement of Hot Re-Heat (HRH) temperature and adjustment of Yaw mechanism This approach is used to fine tune the Yaw setting, thereby minimising flue gas maldistribution in the upper furnace. This led to an improvement in HRH steam temperature and in the heat rate by 3.5 kcal/kWh in FY20. 102 103 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Heat Rate is calculated for all thermal power plants by comparing the energy consumed by each plant and the corresponding energy generated. The Energy intensity Ratio (Heat Rate) for thermal plants is represented below, with CGPL leading the way, on account of various innovative measures undertaken. Building on these accomplishments, we have further plans to implement more initiatives to bring down the station heat rate at our various power plants. M A I T H O N P O W E R L I M I T E D ( T H E R M A L ) An Artificial Intelligence (AI) and Machine Learning (ML) model-based project has been implemented for overall Station Heat Rate (SHR) improvement and moving towards autonomous power plant. Digital twins at Unit 1 and 2 will recommend heat rate optimisation for steady state (full load or partial load), which will, in turn, help run the plant automatically at optimum level. H E AT R AT E (G J/ k W h) CGPL 0.00886 Maithon 0.00998 Trombay 0.01000 Jojobera 0.01075 Resource conservation C O A S TA L G U J A R AT P O W E R L I M I T E D ( T H E R M A L ) technology (SPPA-P3000 Combustion Laser-based Optimisation Technology) has been planned for implementation at one unit of CGPL Mundra. It involves measuring and homogenising the combustion process to avoid local emission and temperature peaks. This gives room for the optimisation of excess air level, which is beneficial for both emissions and efficiency. We take cognisance of the perils of over-consumption of natural resources in the short- and long-run. Currently, majority of the coal for thermal power plants is sourced from coal mines in Indonesia. The ongoing transition to renewable energy is enabling us to reduce our dependence on non-renewable resources, especially imported coal, and drastically reduce the associated impacts from mining of these raw materials. We are focusing on energy efficiency, renewable energy, and shift in fuel mix to more sustainable options in order to drive resource conservation and sustainable business operations. Power station Coal consumption (MT) Light Diesel Oil (kL) Heavy Furnace Oil (kL) Natural Gas (MT) CGPL Maithon Trombay Jojobera IEL (Powerhouse 6) 11,010,596 3,870,977 2,345,432 2,520,655 N/A 624 678 124 2,102 1,483 4,232 1,367 556 N/A N/A N/A N/A 234,505 N/A N/A � Rinse water recovery � Reduction of service water consumption by continuous replacements of corrugated service water and fire water line � Utilisation of Sewage Treatment Plant (STP) water for gardening � � Installation of flow meters in service water system to identify consumption pattern Installation of isolation control valves before fire water line replacement Case study: At IEL Kalinganagar, our customer had formally requested for the reduction of specific water consumption as it was contributing to their overall cost of product. After exploring several possibilities, it was decided to recover seepage water from cable trenches. Water management We appreciate the importance of sustainable water management in our operations. Water is a critical natural resource for thermal power plants, which still constitute 72% of Tata Power’s domestic electricity generation portfolio. Best management practices are implemented across stations to minimise specific water consumption. All the plants have implemented various water saving initiatives, resulting in a significant decrease in the specific water consumption. � Demineralisation (DM) plant - backwash water recovery � Cell overflow recovery Case study: At CGPL, Specific water consumption has improved from 0.193 m3/MWh in FY19 to 0.157 m3/MWh in FY20 with the following initiatives: This has been achieved by: � Corroded Fire and Service water line (made of mild steel) has been replaced by carbon steel pipelines with corrosion protection coating. � Fire Line configuration has been changed from underground to above ground for early detection of leakages and ease of maintenance. � DM water consumption has been optimised through various operational practices. � Clean up cycle time has been reduced to minimise DM water consumption. CGPL received the 1st runner up award in the “Best Water Efficient Power Plant over 500 MW” category at Water Optimisation–2019 event organised by Mission Energy Foundation on 3rd May 2019. We were able to recover 13,500 m3 of water, reducing our specific water consumption by 0.033 m3/MWh. In FY21, it is estimated that 45,000 m3 of water will be recovered amounting to significant savings for the customer. We are also exploring options to recover water from GIS cable vault and other neighbouring trenches. 104 105 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Further, all the major effluents (service water effluents, coal handling plant effluents, ash pond overflow) are treated in Effluent Treatment Plant (ETP) as per statutory norms of the respective state pollution control boards before reusing, recycling or disposing. Along with these initiatives, many plants and select receiving stations have initiated rainwater harvesting to ease the strain on existing water sources. Additionally, all the other effluents, including the boiler blowdown, are treated in the ETP, and the treated water is utilised subsequently for horticulture or green belt development, and for control of fugitive emissions from coal yard. The cooling tower blowdown is cooled further and used as make- up for the service water system, coal handling plant water system, ash water system, firefighting, etc. The treated water is reused internally for horticulture/plantation/green belt development, as well as used for control of fugitive emissions from coal yards. All power plants are operating with a “minimum water requirement and minimum effluent generation” system. All thermal power plants have cooling towers, except Trombay and CGPL, which have sea water-based once-through cooling system. Process water required for thermal and hydro power plants forms the bulk of our water consumption. Water source for power plants WAT E R C O N S U M P T I O N B Y P O W E R P L A N T S I N F Y 2 0 � Trombay Thermal Power Station – Fresh water (supplied by Brihanmumbai Municipal Corporation) for processes and services, Seawater for cooling processes � CGPL – Desalinated water for processes and cooling purpose. It is the only power plant in India which generates fresh water for itself � Haldia – Hooghly River � Kalinganagar – Kharsua river � Maithon – Maithon dam � Jojobera - Subarnarekha River 5,175,563,739 m3 1,262,708,995 m3 Sea Water Surface Water* 5,211 m3 Rain Water *includes Municipal water supply As part of the water sustainability strategy for being future ready, we are taking efforts in all our operations to recycle and reuse wastewater. Currently, Jojobera and Maithon power stations have achieved zero-liquid discharge. Further, all wastewater generated at the captive power plants at Kalinganagar and Haldia are sent to our customer's ETP for recycling and reusing in their processes. WAT E R R E C YC L E D, R E U S E D A C R O S S O U R T H E R M A L A N D H Y D R O P O W E R S TAT I O N S Power station CGPL Maithon Trombay Jojobera IEL (Powerhouse 6) IEL Kalinganagar Haldia Bhira Hydro^ Bhivpuri Hydro^ Khopoli Hydro^ Water withdrawn (m3) Wastewater recycled/ reused (m3) Wastewater discharged (m3) 4,439,035,230* 15,043,816 737,333,846* 10,112,521 2,243,502 3,095,877 2,437,053 694,586,200 267,902,200 266,487,700 52,327 686,561 52,252 509,795 47,701 0 0 440 33 692 4,248,927,880* 0 736,604,404* 0 0 380,829# 548,241# 694,586,200 267,902,200 266,487,700 *Figures for Trombay and CGPL include sea water withdrawn and discharged for once-through cooling system. #Wastewater generated at Kalinganagar and Haldia is sent to customer for recycling and reuse. ^ Hydros use water collected in catchment area for power generation and release it entirely outside the project boundary for downstream consumption. These stations don't consume any surface water in process of generating electricity. Further, the transition towards RE projects is expected to substantially decrease water requirements, thereby reducing the cost and water footprint of our customers, as well as immensely benefiting the community and the environment. 106 The Tata Power Company Limited Integrated Annual Report 2019-20 107 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices Waste management We manage our generated waste in an environment friendly, socially responsible and techno-commercially viable manner. The single largest form of solid waste generated from Tata Power’s thermal power plants is coal ash (from combustion of coal), besides other types of wastes such as municipal or domestic wastes, hazardous wastes, biomedical wastes and e-wastes. There are no significant solid wastes associated with generation of electricity from oil and gas-fired plants. Hydropower, wind and solar power produce insignificant, if any, amount of solid waste. We ensure that the best waste management practices are implemented to reduce, reuse and recycle the waste generated. In addition to recycling, a strong focus is placed on identifying opportunities to prevent waste or bring new life to materials that might otherwise be discarded. Tata Power has implemented several initiatives to responsibly manage the waste � Compost produced by waste converter at Maithon plant and township minimises emissions and waste used for gardening and plantation (1,285 kg compost produced in FY20) � Fly ash generated at Jojobera is reutilised in the manufacturing of bricks � Fly ash from the main silo of Maithon is directed to cement plants � Fly ash-based paint developed in-house by using fly ash from Jojobera plant and ingredients of cement paint; 15-20% fly ash is used in overall composition of this paint � Horticultural waste converted into wood chips to make raw material for particle board/paper making Thermal power station Fly-ash utilised* (MT) CGPL Maithon Trombay Jojobera * 100% fly-ash utilisation achieved in FY20 as per norm 545,048 1,596,653 47,775 1,240,671 The majority of our non-hazardous waste comprises fly ash and bottom ash. This is redirected towards construction (RMC as per fly ash notification) and quarry filling (as per SPCB NOC). All the generated waste is channelled to authorised recyclers only. Additional non-hazardous waste at generating stations generally comprises of metal scraps and scrap wood. For distribution and transmission utilities, it primarily includes oil drums, scrap cable and metal pieces, meter boxes and assorted iron mix. S U M M A R Y O F N O N ‑ H A Z A R D O U S WA S T E G E N E R AT E D Non-hazardous waste Waste quantity (MT) CGPL Maithon Trombay Jojobera IEL (Powerhouse 6) IEL Kalinganagar Haldia Bhira Hydro Bhivpuri Hydro Khopoli Hydro Mumbai Transmission Mumbai Distribution TPDDL TPSSL 805,297 1,597,172 55,808 1,240,671 33 12 113 85 6 5 538 120 1,604 750 Small quantities of hazardous wastes are generated in Tata Power, which are stored in suitably identified locations. As per the regulations, hazardous wastes (non-recyclable) are required to be sent to the respective State Pollution Control Board (SPCB)- approved common Treatment, Storage and Disposal Facility (TSDF), and is adhered to by all our units. For distribution and transmission companies, hazardous material typically includes used transformer oil, scrap lead batteries, lead sheathed cable pieces, spent oil etc. For thermal power generating companies, it comprises used oil, waste residue containing oil, spent ion-exchange resins etc, while sets of battery primarily constitute the hazardous waste for Hydros. Case study: An Integrated waste management programme has been implemented at CGPL to ensure environment friendly and safe disposal of waste as well as gainful utilisation of resources. S U M M A R Y O F H A Z A R D O U S WA S T E G E N E R AT E D Hazardous waste CGPL Trombay Jojobera IEL Kalinganagar * Haldia Mumbai Distribution TPDDL TPSSL The programme focuses on three aspects � Wood chippings: With the help of a local vendor, 3,000 MT of waste wood chips were handled, thereby saving 3,000 m3 of water on account of stoppage of controlled fire. � Ash utilisation: In collaboration with several partners (cement companies, brick manufacturers, ready-mix concrete etc), we were able to gainfully utilise around 5.2 lakh MT of fly ash in FY20, resulting in income of ₹ 9 crore in in the financial year; 100% of generated fly ash in FY20 was utilised within the year as per regulatory norms. � Common wastes: With support of our waste management partner NEPRA, we were able to effectively manage 3,800 MT of waste, thereby saving 1,000 MT of CO2e in FY20. Solid (MT) 5.8 7.1 11.2 15.3 Liquid 15.3 MT 26.6 MT 47.2 MT 350.2 MT 2.1 MT 25.6 kL 105.4 kL 4.9 kL * 338 MT of the hazardous liquid waste at IEL Kalinganagar comprises of drip pit water which contains small amounts of corrosive chemicals. This water is treated and reused. We are conscious of the other waste types generated at our power stations, and manage it diligently in accordance with regulations. Bio- medical wastes are segregated and are placed in buckets of different colours as per the notification for Bio-Medical Waste (Management and Handling) Rules and are disposed of through authorised vendors, across all locations. For the reporting period, 1.15 kg of Biomedical waste was generated at Tata Power (at the Jojobera power station). E-wastes are disposed through authorised vendors for reuse or reprocessing in a responsible manner. Similarly, scrap lead batteries are disposed of in accordance with Batteries (Management and Handling) Rules. Power stations CGPL Trombay Jojobera IEL Kalinganagar Haldia Bhivpuri Hydro Mumbai Transmission TPDDL TPSSL E-waste (MT) Batteries (MT) 16.4 8.3 6.7 0.4 0.1 2.7 21.9 4.8 13.6 1.5 6.1 We are pleased to report that there were no incidents of significant spills during the year under review. A spill is considered significant when it results in financial liability from regulatory bodies or any other organisations. Tata Power does not transport any hazardous wastes categorised under the Basel Convention. There were no discharges of untreated water to any water body and no water bodies were affected by discharges and/or run-off. 108 109 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Biodiversity management to nature conservation and Tata Power’s commitment strengthening biodiversity is well known. A formal governance structure is in place that allows for systematic biodiversity management across the organisation. Principles guiding our biodiversity management practices: � Integrating biodiversity into Company operations � ‘Beyond the Fence’ projects – i.e. outside the area of impact � Creating a culture of care for biodiversity All Tata Power locations have planned their layout for ensuring compliance with regulatory green belt requirements as stated in the Environmental Clearance for individual locations. E N T E R P R I S E Governance and Expertise on Biodiversity S I T E S C A L E Biodiversity Action Plan Biodiversity Management guidance documents Partnership with experts Compliance Impact Management I N D I V I D U A L L E V E L Exposure to biodiversity Sensitisation and volunteering Native/local species are selected for plantation in the identified area. Horticulture expert is engaged for ensuring plantation and its survival. When new transmission line projects are being chosen, route selection is done to minimise disturbance to sensitive areas. Wherever necessary, compensatory afforestation is done. For operational transmission lines, only trimming of trees, to the extent of maintaining safe distance, is carried out. The Area adjacent to the corridor (Right of Way) remains untouched, except for occasional maintenance requirement. This helps in natural conservation and sustenance of the biodiversity and habitat in and around the transmission lines. Before starting projects involving thermal discharge, we carry out Marine Environmental Impact Assessment studies through reputed organisations Institute of Oceanography (NIO). Adverse impacts, if any, are identified and suitable mitigation measures are accordingly built into the project itself. This ensures that there is no major impact on the marine environment. like National Trombay and CGPL, both use once-through sea water cooling system. Adequate length of pre-cooling channels for cooling the hot water discharge from condensers are provided at both the plants. This ensures that the thermal discharge temperature is below the regulatory prescribed limits for the same all the time. This ensures there is no adverse impact on marine environment in the surrounding. Conservation Initiatives – Preserving Western Ghat Biodiversity Hotspot Our hydro power operations are located in the northern part of the Western Ghats, which is an important biodiversity hotspot in the world. Rajmachi sanctuary, Thamini sanctuary, and Sudhagad sanctuary are in close proximity to our areas of operations. As the Western Ghats are known for being a biodiversity hotspot, preserving the catchments has become a national priority that we have extended our wholehearted support to. Over the past 40 years, we have planted saplings of fast-growing tree species, native to the Western Ghats, on hill slopes of the lake catchments. The afforestation programme was intensified in 1991 and continues till date. Today, the total area under forest cover is around 1,200 hectares. During the last decade, the focus has been on growing indigenous local tree species found in the Western Ghats. These plants are nurtured at the nurseries of Tata Power in Lonavala. This process is necessary to promote the biological diversity in the eco-forest system and, in turn, restore the habitat for selected fauna. Due to our diligent efforts, over 100 lakh saplings have been planted across different locations in the hydro catchments in Maval and Mulshi areas. Through this effort, we aim to make the area scenic with a healthy ecosystem, in the hope that this will attract several species of animals, birds and butterflies, thus ensuring that the Western Ghats continue to be known as a biodiversity hotspot across the globe. For better planning and implementation, the aqua diversity of few lakes have been studied, measured and appropriate steps towards conservation have been taken. Habitat and breeding grounds of fishes, birds, reptiles and important grasslands are being protected. Scientific studies on birds, reptiles and wild orchids have also been carried out and documented in the form of books. Case study: Tree Mittra Tree Mittra is a flagship volunteering initiative of Tata Power under the "Be Green" theme, which aims to encourage employees and their families to adopt a plant and nurture it to ensure its survival. The initiative was launched at selected Hydros and rolled out across other locations of Tata Power. So far, we have planted and nurtured around 10.3 lakhs trees across Tata Power under our Tree Mittra initiative, thereby creating a positive impact on the environment. O v e r v i e w O u r E m p h a s i s o n V a u e l O u r V a l u e - c r e a t i o n P a r a d g m i S t a t u t o r y R e p o r t s i F n a n c i a l S t a t e m e n t s 110 The Tata Power Company Limited Integrated Annual Report 2019-20 Future ready for smart choices 111 Case study: Mahseer conservation The Mahseer are a species of freshwater fish most of which face the threat of extinction in the wild. They are important cultural and biological icons of the rivers of India, linking livelihoods and biodiversity conservation to each other. The survival of the magnificent Mahseer, one of the 20 mega fishes of the world, is important for the preservation of our eco-system. The health of this fish is linked to the health of India's big rivers, including the Ganges. With the 'Save Ganga Movement' picking up over the last few years, one expects the Mahseer to be able to reap the benefits of this high-profile programme. Clean rivers certainly help the 'Act for Mahseer' initiative, as polluted and toxic waters are one of the main reasons for the depletion of its numbers. Tata Power has taken up the conservancy programme of the Mahseer in right earnest. Efforts are being made to convince the local people about the loss on lucrative tourism market if the programme does not succeed. There is an endeavour to sensitise and encourage the people to 'Act for Mahseer' and work towards a common goal of ensuring the survival of the Mahseer. The Mahseer is known to be tough and has always shown an inclination to travel upstream in fast flowing waters and against the tide – ironically it is also fighting an uphill battle against extinction. Holistic conservation and management strategies were devised to sustain and replenish the local population of Mahseer, which encompassed: � Site/area protection – Habitats outside of ‘Protected Area’ to be managed along with local communities and NGOs � Habitat protection – Large pools harbouring large-sized individuals, including potential broodstock � Control of invasive species – Introduction of competing species to be stopped � Ex-situ conservation – Captive breeding and reintroduction � Fishery management – Education and awareness among local communities The mighty Mahseer fish species is recorded in the IUCN Red list species. Although not affected by our operations, for almost six decades we have strived to conserve this legendary fish. In line with its core pillars of sustainability, 'Care for the Environment' and 'Care for the Community', Tata Power has pledged its commitment to conserving the Mahseer. We have done a lot of research on Deccan Mahseer, which originates from Western India, and Golden Mahseer, which is from Northern India. Tata Power’s Hatchery is the only hatchery in India which breeds Mahseer on a large scale. The hatchery breeds around 4 to 5 lakh Mahseer fries every year which are then handed over to the respective state fisheries department as part of our conservation programme. Hump-backed Mahseer The first documented record of the Hump-backed Mahseer in the scientific literature dates back to 1849, when British naturalist Thomas Jerdon mentioned collecting in the River Cauvery, a juvenile specimen of a mahseer that grows to enormous sizes. There had been no comprehensive assessment of the distribution, threats or conservation-needs of this iconic species. A study was funded by Tata Power and implemented by the Mahseer Trust, Bournemouth University Global Environmental Solutions (UK) and Kerala University of Fisheries and Ocean Studies (KUFOS), to inform future conservation and policy actions. The earlier research conducted by the project team helped establish the taxonomy of Humpbacked Mahsheer as Tor remadevii, which also facilitated its first IUCN Red List assessment, making this the first Mahseer to be declared as Critically Endangered. The major threats to Mahseer identified included illegal fishing, pollution and introduction of exotic species, among others. We have also been instrumental in rescuing wild animals and releasing them back in the wild. So far, we have rescued pangolins, sambars, wild boars, red spurfowls etc. Certain endemic and endangered species of trees are also planted in our areas of operations as part of our biodiversity conservation programme. Tata Power's inception a century ago is a unique saga of the Founder's vision to provide clean energy to the city of Mumbai with minimal impact on the environment. Today, in our quest to deliver clean energy globally, we are focusing on building a robust renewable energy portfolio, scouting for clean sources of power, reducing our carbon footprint and investing in cleaner technologies and global resources. Our pledge to being Carbon Neutral by 2050 is indicative of the fact that, while having ambitious growth plans, we are committed to 'responsible growth'. Tata Power, in association with Ela Foundation, launched the third book of its biodiversity series – ‘Reptiles of the Northern Western Ghats’ - a compilation of over 123 endangered species of reptiles in the biodiversity of the Western Ghats. 112 113 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Financial Capital Creating shared economic value Our legacy is built on the vision of the Company’s founders, who looked at financial capital as a means of gainfully creating wealth as a custodian of the community’s resources and return it back to the stakeholders. This adds a lot of responsibility on the management to ensure capital allocation does not focus on only financial returns but overall stakeholder return. Ramesh Subramanyam, CFO Tata Power endeavours to invest in businesses capable of generating returns in line with expectations of our stakeholders. We seek to optimise returns from business operations as well as from monetisation of non-core assets and investments. Our growth strategy includes investments in renewables, new emerging businesses, including EV charging, home automation and microgrids in remote areas. We continue to raise funds in line with the prevailing market conditions at an optimal cost. With a century old legacy, Tata Power has remained committed to driving sustainable value creation based on strong business fundamentals, driven by a diversified and growth-oriented business model with a strong focus on efficient capital allocation. Business model realignment and significant improvement in the renewable portfolio has contributed 14% of the total revenue of the Company in FY20. PE R FO R M A N C E H I G H L I G H T S D 28,948 CRORE D 7,870 CRORE D 1,316 CRORE Consolidated Operating Revenues Consolidated Operating Profit Consolidated Net PAT D 2,271 CRORE 2.0 5.2 Positive Free Cash Flow generation Net Debt/Equity in FY20, an improvement from 2.2 in FY19 Net Debt/EBITDA in FY20, an improvement from 6.2 in FY19 Strategic Objectives Material Topics Addressed Key Risks Considered Stakeholder Recommendations Addressed SDGs Focused SBO 1 Resolution of CGPL coal cost under-recovery SBO 2 Deleveraging balance sheet � Future ready � Impact on business due to change in Coal tax or coal pricing � Sustainable investing � Availability of cost- effective capital � Sale of non-core assets � Exit from international joint venture to deleverage balance sheet � CGPL turned EBITDA positive in FY20 � High leverage – increased borrowings over last few years primarily due to losses in CGPL � Renewal of licence of KPC mine in Indonesia I M PAC T O N OT H E R C A PI TA L S Our performance in Financial Capital has a significant influence across all other capitals. Natural Capital Impact � Deployment of robots to clear solar panels, thereby reducing maintenance capex Intellectual Capital Impact � Installation of grid-scale, battery-based energy storage system in Rohini, New Delhi (capex of ₹ 4 crore by TPDDL) � Advance metering infrastructure and installation of Smart meters in Radio Frequency (Mesh) network (₹ 95 crore capex by TPDDL) Financial Capital Human Capital Impact � ₹ 7.25 crore invested in human resource upskilling, training and development in FY20 Manufactured Capital Impact � ₹ 692 crore investment in Renewable Energy Capex in FY20 Social & Relationship Capital Impact � ₹ 39.97 crore spent on CSR activities in FY20 O v e r v i e w O u r E m p h a s i s o n V a u e l O u r V a l u e - c r e a t i o n P a r a d g m i S t a t u t o r y R e p o r t s i F n a n c i a l S t a t e m e n t s 114 The Tata Power Company Limited Integrated Annual Report 2019-20 Future ready for smart choices 115 Strategic focus areas Economic value creation Tata Power generated a positive economic value retained figure in FY20 with the reduction in operating costs, aided by the successful implementation of robust cost control measures. The payment to providers of capital was also lower compared to the level witnessed in FY18. Tata Power continues to meet its financial obligations towards suppliers, employees, lenders and shareholders, governments and communities, in a timely manner. Particulars (in ₹ crore) Direct economic value generated1 Economic value distributed Operating costs2 Employee wages & benefits Payment to providers of capital3 Payments to governments4 Community Investments (CSR) Economic value retained = Direct economic value generated less economic value distributed FY18 26,863 28,673 21,492 1,382 5,158 602 40 (1,810) FY19 30,370 30,592 24,151 1,339 4,557 506 39 (222) FY20 29,510 29,110 22,352 1,441 4,674 609 34 400 Notes: 1. Revenue generated including other income and movement in regulatory deferral balance 2. Operating cost including Cost of power purchased, Cost of Fuel, Transmission charges, Raw material consumed, Purchase of finished goods, increase/decrease in WIP, depreciation & other expenses excluding CSR 3. Payment to providers of capital includes finance cost paid, dividend paid to shareholders & Distribution on Unsecured Perpetual Securities 4. Payments to government by country include income tax paid (net of refund received) S U S TA I N A B I L I T Y O F B U S I N E S S Economic value creation � ₹ 1,294 crore y-o-y Efficient Working Capital Management reduction in Net Debt � Net cash flow from � Consistent improvement in Net Debt/Equity from 2.8 in FY17 to 2.0 in FY20 operations increasing by ₹ 2,801 crore from FY19 (+61%) from ₹ 4,574 crore in FY19 to ₹ 7,375 crore in FY20 � Released cash at consolidated level through factoring, negotiations on better credit terms, liquidation of balances with government authorities and process regularisation Exiting Non-core Assets Improving ROCE � Steady improvement in ROCE from 6.4% in FY18 to 7.4% in FY20, with the aid of an optimal capital structure � Sold investment in Cennergi Pty Limited to Exxaro Resources Ltd on 31st March 2020 for ₹ 737 crore and recognised gain of ₹ 533 crore, on sale of investment � Hedged receivable against the consideration to be received with fair value gain on the hedge instrument of ₹ 105 crore being recognised as 'Other Income' G R O W T H O F B U S I N E S S Scale-up Renewables, Distribution and Services Businesses Less Capital-intensive Business Model � Adopt asset/debt light models through financial engineering and restructuring. Adopt debt- light model for growth � Increase share of renewables to 50-60% by 2025 through planned investments in renewable space � Tap state Discom privatisation opportunities through competitive bidding � Invest in R&D to develop tech- enabled consumer-centric home automation solutions Favourable Risk-return Profile � Bids to be placed only in those renewable projects that meet the minimum IRR threshold � Deleveraging balance sheet with financial structuring securing alignment with statutory auditors and bankers 116 117 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choicesThe Tata Power Company Limited Integrated Annual Report 2019-20 Key financial trends and ratios E B I T D A (₹ C R O R E ) N E T P R O F I T A F T E R TA X (₹ C R O R E ) FY 20 8,317 FY 19 7,235 28.5% FY 20 1,316 24.2% FY 19 2,606 FY 18 6,296 23.5% FY 18 2,611 FY 17 6,193 22.4% FY 17 1,100 EBITDA EBITDA Margins PAT PAT Margins R E T U R N O N AV E R AG E C A PI TA L E M PLOY E D (%)* N E T D E B T (₹ C R O R E ) 4.5% 8.7% 9.7% 4.0% FY 20 FY 19 FY 18 FY 17 7.4 7.1 6.4 7.0 FY 20 32,695 43,559 44,853 13,658 2,794 FY 19 31,139 14,626 912 FY 18 22,356 44,609 23,865 45,655 1,612 FY 17 25,143 22,475 1,963 *Figures before exceptional items Long term Debt Short term Debt Cash & Cash equivalent N E T D E B T/ E Q U I T Y A N D N E T D E B T/ R E P O R T E D E B I T D A FY 20 2.0x 5.2x FY 19 2.2x 6.2x FY 18 2.4x FY 17 2.8x 7.1x 7.4x Net Debt/Equity Net Debt/Repoted EBITDA 118 The Tata Power Company Limited Integrated Annual Report 2019-20 119 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices GRI Content index GRI Standard Disclosure Title Report Reference Page Number General Disclosures Organisational Profile GRI 102: General Disclosures 2016 102-1 Name of the organisation About this report 102-2 Activities, brands, products, and services A leading market disruptor in sustainable energy - Business at a glance 4 10 102-3 Location of headquarters Back Cover 102-3, Back Cover 102-4 Location of operations Board's Report- Annexure VIII 102-5 Ownership and legal form 102-6 Markets served 102-7 Scale of the organisation Leadership with a difference - Corporate governance A leading market disruptor in sustainable energy - Business at a glance A leading market disruptor in sustainable energy - Business at a glance 102-8 Information on employees and other workers Engaged, agile, future ready workforce - Human Capital 102-9 Supply Chain 102-10 Significant changes to the organisation and its supply chain Strengthening our communities to build sustainable societies - Social & Relationship Capital A leading market disruptor in sustainable energy - Business at a glance Strengthening our communities to build sustainable societies - Social & Relationship Capital 102-11 Precautionary principle or approach Building a future ready business - Risk management 102-12 External initiatives 102-13 Membership of associations 102-14 Statement from senior decision-maker 102-15 Key impacts, risks, and opportunities 102-16 Values, principles, standards, and norms of behaviour 102-17 Mechanisms for advice and concerns about ethics 102-18 Governance structure 102-19 Delegating authority In alignment with global goals - Tata Power’s commitment to UNSDGs A leading market disruptor in sustainable energy - Business at a glance Annexure - Our industry associations Raising the bar in sustainable energy - CEO & MD's message Building a future ready business- Risk management A leading market disruptor in sustainable energy - Business at a glance Report on Corporate Governance Report on Corporate Governance Leadership with a difference - Corporate governance Report on Corporate Governance Leadership with a difference - Corporate governance 155-161 16 10,11,13 10 60 81 12 & 81 32 30 10 128 8 & 9 34 & 35 10 222 222 16 & 17 206-211 17 120 The Tata Power Company Limited Integrated Annual Report 2019-20 GRI Standard Disclosure Title Report Reference Page Number 102-30 Effectiveness of risk management processes Building a future ready business - Risk management 102-31 Review of economic, environmental, and social topics Building a future ready business - Risk management 102-32 Highest governance body’s role in sustainability reporting About this report 102-33 Communicating critical concerns Report on Corporate Governance 102-40 List of stakeholder groups 102-41 Collective bargaining agreements 102-42 Identifying and selecting stakeholders 102-43 Approach to stakeholder engagement 102-44 Key topics and concerns raised 102-45 Entities included in the consolidated financial statements 102-46 Defining report content and topic Boundaries 102-47 List of material topics Trust with transparent communications - Stakeholder Engagement Engaged, agile, future ready workforce - Human Capital Trust with transparent communications - Stakeholder Engagement Trust with transparent communications - Stakeholder Engagement Trust with transparent communications - Stakeholder Engagement A leading market disruptor in sustainable energy - Business at a glance Annexure - Our subsidiaries About this report 32 32 4 222 24 & 25 66 24 & 25 24 24 & 25 10 128 4 Integrated smart and sustainable solutions - Materiality 28 & 29 102-48 Restatements of information About this report 102-49 Changes in reporting Integrated smart and sustainable solutions - Materiality 102-50 Reporting period 102-51 Date of most recent report 102-52 Reporting cycle 102-53 Contact point for questions regarding the report 102-54 Claims of reporting in accordance with the GRI Standards 102-55 GRI content index 102-56 External assurance About this report About this report About this report About this report About this report GRI Content Index About this report 4 27 4 4 4 4 4 120-127 4 Topic Specific Disclosures Manufactured Capital Increase in renewables portfolio EU 1 Installed capacity, broken down by primary energy source and by regulatory regime The future of energy infrastructure - Manufactured Capital 42 121 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices GRI Content index GRI Standard Disclosure Title Report Reference Page Number Operational Efficiency G4 DMA EU 2 EU 12 Management approach to ensure short and long-term electricity availability and reliability Net energy output broken down by primary energy source and by regulatory regime (Cost plus, Bid and PPA) Transmission and distribution losses as a percentage of total energy Intellectual Capital GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundary The future of energy infrastructure - Manufactured Capital 103-2 The management approach and its components Driving change through innovation - Intellectual Capital 103-3 Evaluation of the management approach Innovation in process, service & solutions EU 8 Human Capital Research and development activity and expenditure aimed at providing reliable electricity and promoting sustainable development Driving change through innovation - Intellectual Capital GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundary 103-2 The management approach and its components Engaged, agile, future ready workforce - Human Capital 103-3 Evaluation of the management approach Human Rights GRI 402: Labour management relations 402-1 Minimum notice periods regarding operational changes GRI 405: Diversity and equal opportunity 405-1 Diversity of governance bodies and employees GRI 410: Security Practices 405-2 Ratio of basic salary and remuneration of women to men 410-1 Security personnel trained in human rights policies or procedures GRI 412: Human Rights Assessment 412-2 Employee training on human rights policies or procedures Engaged, agile, future ready workforce - Human Capital 42 43 45 52 52, 54 & 56 52, 54 & 57 52-57 58 60 61 61 16 & 60 67 66 66 122 The Tata Power Company Limited Integrated Annual Report 2019-20 GRI Standard Disclosure Title Report Reference Page Number Training, Education and Development GRI 404: Training and Development GRI 404-1:Average hours of training per year per employee EU: Employment Occupational Health & Safety GRI 403: Occupational Health & Safety GRI 404-2: Programs for upgrading employee skills and transition assistance programs GRI 404-3: Percentage of employees receiving regular performance and career development reviews EU 14: Programs and processes to ensure the availability of a skilled workforce EU 18: Percentage of contractor and subcontractor employees that have undergone relevant health and safety training 403-2 Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities 403-3 Workers with high incidence or high risk of diseases related to their occupation 403-4 Health and safety topics covered in formal agreements with trade unions Engaged, agile, future ready workforce - Human Capital Engaged, agile, future ready workforce - Human Capital Social & Relationship Capital GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundary 103-2 The management approach and its components 103-3 Evaluation of the management approach Strengthening our communities to build sustainable societies- Social & Relationship Capital GRI 414: Supplier social assessment 414-1 New suppliers that were screened using social criteria 414-2 Negative social impacts in the supply chain and actions taken Strengthening our communities to build sustainable societies- Social & Relationship Capital 63 64 61 62 & 63 64 69 69 64 70, 72, 73 & 81 72, 73 & 81 72 & 73 81 81 123 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices GRI Content index GRI Standard Disclosure Title Report Reference Page Number Customer relationship GRI 416: Customer Health and Safety GRI 416-1: Assessment of the health and safety impacts of product and service categories GRI 416-2: Incidents of non-compliance concerning the health and safety impacts of products and services GRI 417: Marketing and Labelling GRI 417-1 Requirements for product and service information and labelling GRI 418: Customer Privacy Demand-side management G4 DMA GRI 417-2 Incidents of non-compliance concerning product and service information and labelling GRI 417-3 Incidents of non-compliance concerning marketing communications GRI 418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data Demand-side management programs including residential, commercial, institutional and industrial programs Net Investment made in the DSM Programs & corresponding MWh saved or MW load shifted Details of progress achieved on initiatives such as; i. Club Enerji ii. Be Green" Strengthening our communities to build sustainable societies - Social & Relationship Capital Strengthening our communities to build sustainable societies - Social & Relationship Capital Natural Capital GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundary 103-2 The management approach and its components Leading the New Energy World - Natural Capital 103-3 Evaluation of the management approach 72 & 73 17 & 73 73 17 & 73 17 & 73 72 78 & 79 95 98, 100, 110 98, 100, 110 98, 100, 110 Resource availability GRI 301: Materials GRI 301-1 Materials used by weight or volume Leading the New Energy World - Natural Capital 104 124 The Tata Power Company Limited Integrated Annual Report 2019-20 GRI Standard Disclosure Title Report Reference Page Number Carbon emission management GRI 302: Energy GRI 302-1 Energy consumption within the organisation GRI 302-3 Energy intensity GRI 302-4 Reduction of energy consumption GRI 305: Emissions GRI 305-1 Direct (Scope 1) GHG emissions Leading the New Energy World - Natural Capital GRI 305-2 Energy indirect (Scope 2) GHG emissions GRI 305-3 Other indirect (Scope 3) GHG emissions GRI 305-4 GHG emissions intensity GRI 305-5 Reduction of GHG emissions GRI 305-7 Nitrogen oxides (NOX), sulphur oxides (SOX), and other significant air emission Water GRI 303: Water and Effluents GRI 303-1 Water withdrawal GRI 303-2 Water sources significantly affected Leading the New Energy World - Natural Capital GRI 303-3 Water recycled and reused 102 104 103 101 101 101 101 101 & 103 101 106 & 107 106 & 107 105 & 107 107 108 & 109 109 108 & 109 111 Waste Management GRI 306: Effluents and Waste Biodiversity GRI 304: Biodiversity GRI 306-1 Water discharge by quality and destination GRI 306-2 Waste by type and disposal method GRI 306-3 Significant spills GRI 306-4 Transport of hazardous waste GRI 304-1 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas GRI 304-3 Habitats protected or restored GRI 304-4 IUCN Red List species and national conservation list species with habitats in areas affected by operations Leading the New Energy World - Natural Capital Leading the New Energy World - Natural Capital 111, 112, 113 112, 113 125 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices GRI Content index GRI Standard Disclosure Title Report Reference Page Number Financial Capital and MDA GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundary 103-2 The management approach and its components 103-3 Evaluation of the management approach Management Discussion & Analysis GRI 201: Economic Performance 2016 201-1 Direct economic value generated and distributed Creating shared economic value - Financial Capital Future ready Non-GRI Sustainable investing Non-GRI Frequency of strategy review and planning Our blueprint for the future - Our strategy Reallocation of capital by divestment of coal business to transition to more sustainable fuels Our blueprint for the future - Our strategy The future of energy infrastructure - Manufactured Capital Impact on business due to change in Coal tax or coal pricing Non-GRI Investments in renewable energy to reduce impact from changes in coal tax Creating shared economic value - Financial Capital 179-184 184-185 185-193 117 22 23 46, 47, 50 116 Corporate Governance GRI 205: Anti-Corruption GRI 206: Anti-competitive Behaviour GRI 205-2 Communication and training about anti-corruption policies and procedures GRI 205-3 Confirmed incidents of corruption and actions taken GRI 206-1 Legal actions for anti- competitive behaviour, anti-trust, and monopoly practices GRI 307: Environmental Compliance 2016 307-1: Non-compliance with environmental laws and regulations GRI 419: Socioeconomic Compliance 2016 419-1: Non-compliance with laws and regulations in the social and economic area Report on Corporate Governance 200, 227 Leadership with a difference - Corporate governance Leadership with a difference - Corporate governance Leadership with a difference - Corporate governance Leadership with a difference - Corporate governance 17 17 17 17 126 The Tata Power Company Limited Integrated Annual Report 2019-20 GRI Standard Disclosure Title Report Reference GRI 406: Non Discrimination 406-1 Incidents of discrimination and corrective actions taken GRI 407: Freedom of Association and Collective Bargaining GRI 408: Child Labour 407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk 408-1 Operations and suppliers at significant risk for incidents of child labour GRI 409: Forced and Compulsory labour 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labour Leadership with a difference - Corporate governance Engaged, agile, future ready workforce - Human Capital Leadership with a difference - Corporate governance Leadership with a difference - Corporate governance Engaged, agile, future ready workforce - Human Capital Leadership with a difference - Corporate governance Engaged, agile, future ready workforce - Human Capital GRI 411: Rights of Indigenous Peoples 411-1 Incidents of violations involving rights of indigenous peoples Leadership with a difference - Corporate governance Page Number 17 & 66 17 17 & 66 17 & 66 17 127 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices Integrated Report Annexures Annexure 1 - Our Industry Associations1 The Tata Power Company Limited - Memberships National Safety Council Confederation of Indian Industry Electrical Research and Development Association IMC Chambers of Commerce and Industry Association of Power Producer The Institute of Internal Auditors Indian Energy Exchange Indian Wind Power Association Central Power Research Institute Annexure 2 - Our Subsidiaries/Joint Ventures/Associates2 The Tata Power Company Limited - Domestic subsidiaries Af-Taab Investment Company Limited Chirasthayee Saurya Limited Coastal Gujarat Power Limited Indo Rama Renewables Jath Limited Dreisatz Mysolar24 Private Limited Industrial Energy Limited# MI Mysolar24 Private Limited NDPL Infra Limited Nelco Network Products Limited Poolavadi Windfarms Limited Nivade Windfarms Limited Powerlinks Transmission Limited# Supa Windfarms Limited Tata Power Green Energy Limited TCL Ceramics Limited (formerly known as Tata Ceramics Ltd) Tata Power Jamshedpur Distribution Limited Clean Sustainable Solar Energy Private Limited Dugar Hydro Power Limited# Maithon Power Limited NELCO Limited Northwest Energy Private Limited Solarsys Renewable Energy Private Limited Tata Power Delhi Distribution Limited Tata Power Renewable Energy Limited Tata Power Solar Systems Limited Tata Power Trading Company Limited Tatanet Services Limited TP Ajmer Distribution Limited TP Kirnali Limited TP Solapur Limited Walwhan Energy RJ Limited Vagarai Windfarm Limited Walwhan Solar AP Limited Walwhan Solar Energy GJ Limited Walwhan Solar KA Limited Walwhan Solar MP Limited Walwhan Solar RJ Limited Walwhan Urja India Limited Walwhan Solar PB Limited Walwhan Solar TN Limited Walwhan Wind RJ Limited 1GRI 102-13 2GRI 102-45 #Classified as Joint Ventures as per Indian Accounting Standards (Ind AS) The Tata Power Company Limited - Foreign Subsidiaries TP Renewable Microgrid Limited (Formerly known as Industrial Power Utility Limited) Walwhan Renewable Energy Limited Walwhan Solar BH Limited Walwhan Solar MH Limited Walwhan Solar Raj Limited Walwhan Urja Anjar Limited Bhira Investments Pte Limited (Formerly known as Bhira Investments Limited) Bhivpuri Investments Limited Far Eastern Natural Resources LLC Trust Energy Resources Pte. Limited Tata Power International Pte. Limited Khopoli Investments Limited PT Sumber Energi Andalan Tbk 128 AnnexuresThe Tata Power Company Limited Integrated Annual Report 2019-20 The Tata Power Company Limited - Joint Ventures Adjaristsqali Georgia LLC Adjaristsqali Netherlands B.V Candice Investments Pte. Limited IndoCoal KPC Resources (Cayman) Limited IndoCoal Resources (Cayman) Limited Itezhi Tezhi Power Corporation Limited Koromkheti Georgia LLC Koromkheti Netherlands B.V LTH Milcom Pvt. Limited Mandakini Coal Company Limited Prayagraj Power Generation Company Limited PT Antang Gunung Meratus PT Arutmin Indonesia PT Citra Prima Power PT Baramulti Sukessarana Tbk PT Citra Kusuma Perdana PT Dwikarya Prima Abadi PT Guruh Agung PT Indocoal Kalsel Resources PT Indocoal Kaltim Resources PT Kalimantan Prima Power PT Kaltim Prima Coal PT Mitratama Usaha PT Marvel Capital Indonesia PT Mitratama Perkasa PT Nusa Tambang Pratama Renascent Ventures Private Limited. Resurgent Power Ventures Pte. Limited Solace Land Holding Limited Tubed Coal Mines Limited The Tata Power Company Limited - Associates Brihat Trading Pte. Limited Dagachhu Hydro Power Corporation Limited Tata Projects Limited The Associated Building Co. Limited Yashmun Engineers Limited 129 OverviewStatutory ReportsFinancial StatementsFuture ready for smart choicesOur Emphasis on ValueOur Value-creation Paradigm Board’s Report To the Members, The Directors are pleased to present to you the Integrated Report [prepared as per the framework set forth by the International Integrated Reporting Council (IIRC)] and One Hundred and First Annual Accounts on the business and operations of your Company along with the audited Financial Statements of Account for the financial year ended 31st March 2020. 1. Financial Results Sl. No. Particulars Less: Operating Expenditure (a) Net Sales / Income from Other Operations* (b) (c) Operating Profit (d) Less: Forex Loss (e) Add: Other Income (f) Less: Finance Cost (g) Profit before Depreciation and Tax (h) (i) (j) (k) (l) (m) Profit/ (Loss) before Tax (n) Add/(Less): Tax Expenses or Credit (o) Net Profit after Tax from Continuing Operations Profit/ (Loss) before Tax from Discontinued Operations (p) (q) Add/(Less): Tax Expenses or Credit from Discontinued Less: Depreciation / Amortisation / Impairment Profit Before Share of Profit of Associates and Joint Ventures Add: Share of Profit of Associates and Joint Ventures Profit Before Exceptional Item Add/(Less): Exceptional Item Operations (r) Net Profit/(Loss) after Tax from Discontinued Operations (s) Net Profit for the year (t) Net Profit for the year attributable to – - Owners of the Company - Non-controlling interests (u) Other Comprehensive income (Net of Tax) (v) Total Comprehensive Income for the year (w) Total Comprehensive Income attributable to – - Owners of the Company - Non-controlling interests *Including rate regulatory income/(expense) #Restated - Refer notes to consolidated financial statements Standalone FY20 7,075 4,794 2,281 11 583 1,510 1,343 686 657 NIL 657 (306) 351 (208) 559 (443) 32 (411) 148 148 NIL (53) 95 95 NIL FY19 8,109 5,302 2,807 11 516 1500 1,812 633 1,179 NIL 1,179 1,168 2,347 452 1,895 (192) 66 (126) 1,769 1,769 NIL (45) 1,724 1,724 NIL Figures in H crore Consolidated FY20 28,948 21,078 7,870 116 563 4,494 3,823 2,634 1,189 953 2,142 226 2,368 641 1,727 (443) 32 (411) 1,316 1,018 299 836 2,153 1,856 297 FY19# 29,984 22,995 6,989 141 386 4,170 3,064 2,393 671 1,402 2,073 1,746 3,819 1,087 2,732 (192) 66 (126) 2,606 2,356 250 164 2,770 2,521 249 2. Financial Performance and the State of The Company’s Affairs 2.1. Consolidated On a consolidated basis, the Operating Revenue was at H 28,948 crore in FY20 compared to H 29,984 crore in FY19. The decrease was mainly due to delay in solar EPC projects on account of COVID-19, lower power demand and lower Free On Board (FOB) price of coal. The operating profit for FY20 recorded 13% growth over FY19 mainly due to lower fuel under recovery in Mundra on account of lower FOB price of coal, higher coal blending and better coal sourcing. Finance costs increased from H 4,170 crore to H 4,494 crore mainly due to impact of IND-AS 116 and capacity addition in the renewables business. The profits from Joint Ventures (JV) and Associates were lower mainly on account of lower profits from Indonesian coal mines due to lower coal prices. The Consolidated Profit after tax in FY20 was at H 1,316 crore compared to H 2,606 crore in FY19 mainly due to exceptional items of H 226 crore in FY20 as compared to 130 The Tata Power Company Limited Integrated Annual Report 2019-20 3. H 1,746 crore in FY19. The current year exceptional items includes gain on sale of investment in joint venture in South Africa (“Cennergi“), reversal of impairment provision pertaining to Georgia investment partly offset by the adverse impact of the standby order passed by the Supreme Court and impairment provisions in Strategic Engineering Division (SED). The exceptional item for previous year includes gain on sale of investments in associate companies viz. Tata Communications Limited (PFL) partially offset by impairment provisions of Rithala plant. Detailed description of exceptional items is provided in Standalone and Consolidated Financial Section of Management Discussion & Analysis (MD&A). (TCL) and Panatone Finvest Limited 2.2. Standalone On a standalone basis, the Operating Revenue stood at H 7,075 crore in FY20 compared to H 8,109 crore in FY19. The decrease was mainly due to lower generation on account of lower demand from procurers, lower transmission charges as per the MERC tariff order and impact of the truing up order passed by MERC. The profit in FY20 was H 148 crore as compared to H 1,769 crore in FY19. The decrease in the profit was mainly due to gain on sale of investment in TCL and PFL in FY19. Refer to Management Discussion and Analysis more details. for No material changes and commitments have occurred after the close of the year under review till the date of this Report which affect the financial position of the Company. 2.3. Annual Performance Details of the Company’s annual financial performance as published on the Company’s website and presented during the Analyst Meet, after declaration of annual results, can be accessed using the following link: https:// www.tatapower.com/pdf/investor-relations/analyst- presentation-may-20.pdf. 2.4. Integrated Report Improvement in Leverage Ratios and Cash from Operations In line with the strategic intent of the Company to deleverage the Balance Sheet, your Company’s Net Debt/ Reported EBIDTA ratio has shown marked improvement from 6.2 to 5.2 from FY19 to FY20 on a consolidated level. Net Debt/Equity on a consolidated level has improved from 2.2 to 2.0 from FY19 to FY20. This year saw a good performace in terms of cash generated from operations with an increase of 61% from FY19 (FY20-₹ 7,375 crore vis-à-vis FY19-₹ 4,574 crore) due to prudent working capital management employed by your Company along with robust operating performance. As a result, reported EBIDTA of your Company has also increased by 15% (FY20-₹ 8,317 crore compared to FY19- ₹ 7,235 crore) on a consolidated basis. A brief discussion on the highlights of financial performance of your Company and financial and return ratios is presented in the financial capital section of Integrated Report (pages 114-119) as well as page 3 of the Integrated Report. 4. Management Discussion and Analysis The Management Discussion and Analysis, as required in terms of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), is annexed to this Report. 5. Dividend Based on the Company’s performance, the Directors of your Company recommend a dividend of 155% (₹ 1.55 per share of ₹ 1 each) (previous year - 130%), subject to the approval of the Members. The Board parameters laid down in the Dividend Policy. recommended dividend based on the Pursuant to the Finance Act, 2020, dividend income will in the hands of the shareholders w.e.f. be taxable 1st April 2020 and the Company is required to deduct tax at source (TDS) from dividend paid to the Members at prescribed rates as per the Income-tax Act, 1961. In keeping with the Company’s commitment to society, your Company this year transitioned from compliance based reporting to governance based reporting by adopting the Integrated Reporting framework developed by International Integrated Reporting Council. The Register of Members and Share Transfer Books of the Company will remain closed from Thursday, 16th July 2020 to Thursday, 30th July 2020 (both days inclusive) for the purpose of payment of the dividend for the financial year ended 31st March 2020. We present to you our First Integrated Report which highlights the Company’s efforts during the year which contribute to long term sustainability and value creation, paving the way for a better tomorrow. top 500 According to Regulation 43A of the Listing Regulations, the listed entities based on market capitalisation, calculated as on 31st March of every financial year, are required to formulate a dividend distribution 131 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm policy which shall be disclosed in their annual reports and on their websites. Accordingly, the Dividend Policy of the Company is provided in Annexure-I. 7. Reserves As per Standalone Financials, the net movement in the reserves of the Company for FY20 and FY19 is as follows: Figures in ₹ crore The Dividend Policy of the Company can also be accessed using the following link: https://www.tatapower.com/pdf/ aboutus/dividend-policy.pdf. Particulars 6. Current Business Your Company has presence across the entire value chain of power business viz Generation, Transmission, Distribution, Power Trading, Power Services, Coal Mines and Logistics, Solar PV manufacturing and associated Engineering, Procurement and Construction services (EPC), new business initiatives like solar rooftop, solar pumps, EV charging, home automation and microgrid. As on 31st March 2020, your Company has an installed capacity of 12,742 MW, out of which 3,883 MW is from 'Clean and Green sources' (Hydro, waste heat recovery, wind and solar) which constitute about 30% of the total portfolio. Your Company has decided to move away from conventional coal based power plants with a commitment to reduce carbon footprint and dependency on fossil fuel based resources like coal and gas and focus on renewable generation, foraying into new business initiatives like solar rooftop, solar pumps, EV charging, home automation as well as tapping into opportunities to widen its distribution network and broaden its customer base. Another important venture is Microgrids where it has test charged around 18 microgrid projects as on 31st March 2020 with another 55 projects in pipeline in line with its commitment to provide the rural population with affordable, clean and reliable power. Limited Focussing on achieving growth in an environmentally responsible and sustainable manner, your Company has commissioned around 312 MW of solar PV and rooftop projects through Tata Power Renewable Energy (TPREL) and Tata Power Solar Systems Limited (TPSSL) in FY20 while commissioning another 178 MW hydro project overseas in Georgia. Your Company's subsidiary TPSSL has achieved a portfolio of 421 MW of solar rooftop projects with an order book of another 1,580 MW EPC projects amounting to a value of ₹ 7,000 crore as on 31st March 2020. In the solar products domain, your Company is one of the leading players, with a portfolio of 25,000 solar agricultural pumps in seven states Details of your Company’s business portfolio has been discussed in a greater detail in the section on Manufactured Capital of Integrated Report (pages 40-51). 132 Capital Redemption Reserve Capital Reserve Securities Premium Debenture Redemption Reserve General Reserve Retained Earnings Equity Instruments through OCI Statutory Reserve As at 31st March 2020 2 62 5,635 297 3,854 3,027 (45) 660 As at 31st March 2019 2 62 5,635 422 3,854 2,954 331 660 The Board of Directors has decided to retain the entire amount of profits for FY20 in P&L account. 8. Subsidiaries/Joint Ventures/Associates As on 31st March 2020, the Company had 54 subsidiaries (40 are wholly owned subsidiaries), 30 Joint Ventures (JVs) and 5 Associates. Of the subsidiaries, 3 companies have been classified as JVs under Indian Accounting Standards (Ind AS). During the year under review, the following changes occurred in your Company’s holding structure: a) Energy Eastern Pte. Limited (subsidiary) merged with Trust Energy Resources Pte. Limited. b) JV in erstwhile The entire shareholding i.e. Cennergi Pty. Limited and its 2 subsidiaries was sold during the year under review. The proceeds of the divestment will be utilised towards reducing the debt in consolidated Tata Power in FY21 in line with the strategic objective of your Company to deleverage the Balance Sheet. c) Gamma Land Holdings Limited, Beta Land Holdings Limited and Ginger Land Holdings Limited are three JVs which ceased to exist during the year under review. d) e) f) Renascent Power Ventures Private Limited, an associate of your Company, acquired 75.01% equity stake in Prayagraj Power Generation Company Limited. TP Kirnali Limited was incorporated as wholly owned subsidiary of TPREL. TP Solapur Limited was incorporated as wholly owned subsidiary of TPREL. The Tata Power Company Limited Integrated Annual Report 2019-20Board's Report A report on the performance and financial position of each of the subsidiaries, JVs and Associates has been provided in Form AOC-1 as per Section 129(2) of the Companies Act, 2013 (the 'Act"). vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries, are available on the website of the Company https://www.tatapower.com/investor-relations/ annual-reports-subsidiaries.aspx. The policy for determining material subsidiaries of the Company has been provided in the following link: https://www.tatapower.com/pdf/aboutus/policy-for- determining-material-subsidiaries.pdf. 9. Directors’ Responsibility Statement Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by management and the relevant board committees, including the Audit Committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during FY20. Pursuant to Section 134(5) of the Companies Act, 2013 (the 'Act'), the Board of Directors, to the best of its knowledge and ability, confirm that: i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures; ii. iii. iv. v. they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; they have prepared the annual accounts on a going concern basis; they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; 10. Directors and Key Managerial Personnel Change in Board Composition Mr. Ashok S. Sethi superannuated as COO & Executive Director of the Company effective close of business hours on 30th April 2019. Mr. Ashok Sinha was appointed as Additional Director and Independent Director of the Company effective 2nd May 2019. His appointment was approved by the Members at the 100th AGM of the Company held on 18th June 2019. Mr. Deepak M. Satwalekar and Mr. Nawshir H. Mirza completed their tenure as Independent Directors of the Company on 12th August 2019. The Board places on record its deep sense of appreciation of the valuable contribution made to the Company by them during their respective tenures. the requirements of accordance with the In the Company’s Articles of Association, Act and Mr. Hemant Bhargava retires by rotation and is eligible for re-appointment. Members’ approval is being sought at the ensuing AGM for his re-appointment. During the year under review, the Non-Executive Directors (NEDs) of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them, if applicable, for the purpose of attending Board/Committee meetings of the Company. Independent Directors In terms of Section 149 of the Act, Ms. Anjali Bansal, Ms. Vibha Padalkar, Mr. Sanjay V. Bhandarkar, Mr. Kesava M. Chandrasekhar and Mr. Ashok Sinha are the Independent Directors of the Company. The Company Independent has received declarations from all the the criteria they meet Directors confirming of independence as prescribed under the Act and the Listing Regulations. that In terms of Regulation 25(8) of the Listing Regulations, they have confirmed that they are not aware of any circumstances or situation which exists or may be reasonably anticipated that could impact their ability to discharge their duties. Based upon the declarations received from the Independent Directors, the impair or 133 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board of Directors has confirmed that they meet the criteria of independence as mentioned under Regulation 16(1)(b) of the Listing Regulations and that they are independent of the management. A declaration on compliance with Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014, along with a declaration as provided in issued by the Notification dated October 22, 2019, the Ministry of Corporate Affairs (MCA), regarding the requirement relating to enrollment in the Data Bank for Independent Directors, has been received from all the Independent Directors, along with declaration made under Section 149(6) of the Act. Number of Board Meetings Four Board Meetings were held during the year under review. For further details, please refer Report on Corporate Governance, which forms a part of this Report. the Key Managerial Personnel Key Managerial Personnel In terms of Section 203 of the Act, the following the are Company as on 31st March 2020: • • • Mr. Praveer Sinha, CEO & Managing Director Mr. Ramesh N. Subramanyam, Chief Financial Officer Mr. Hanoz M. Mistry, Company Secretary (KMP) of 11. Annual Evaluation of Board Performance and Performance of its Committees and Individual Directors The Board of Directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and Listing Regulations. The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017. In a separate meeting of Independent Directors, performance of Non-Independent Directors, the Board as a whole and the Chairman of the Company was evaluated, taking into account the views of the Executive Director and NEDs. 134 The Nomination and Remuneration Committee (NRC) reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In a subsequent Board meeting, the performance of the Board, its Committees, and individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated. 12. Policy on Board Diversity and Director Attributes and Remuneration Policy for Directors, Key Managerial Personnel and Other Employees In terms of the provisions of Section 178(3) of the Act and Regulation 19 read with Part D of Schedule II to the Listing Regulations, the NRC is responsible for formulating the criteria for determining for determining qualification, attributes and independence of a Director. positive is also responsible for recommending to The NRC the Board, a policy relating to the remuneration the Directors, Key Managerial Personnel and of other employees. requirement, line with the Board has adopted the Policy on Board Diversity and Director Attributes, which is provided in Annexure-II to this Report and Remuneration Policy for Directors, Key Managerial Personnel and other employees of the Company, which is reproduced in Annexure - III to this Report. this In 13. Committees of the Board The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. The following statutory Committees constituted by the Board function according to their respective roles and defined scope: • • • • • Audit Committee of Directors Nomination and Remuneration Committee Corporate Social Responsibility Committee Stakeholders Relationship Committee Risk Management Committee Details of composition, terms of reference and number of meetings held for respective committees are given in the Report on Corporate Governance, which forms a part of this Report. The Company has adopted a Code of Conduct for its employees including the Managing Director and the Executive Directors. In addition, the Company has adopted a Code of Conduct for its Non-Executive Directors which The Tata Power Company Limited Integrated Annual Report 2019-20Board's Report suitably includes Code of Conduct for Independent Directors which of incorporates Independent Directors as laid down in the Act. The same can be accessed using the following link: https://www. tatapower.com/pdf/aboutus/Code-of-Conduct-NEDs.pdf. duties the All Senior Management personnel have affirmed compliance with the Tata Code of Conduct (TCoC). The CEO & Managing Director has also confirmed and is enclosed as certified the same. The certification Annexure-I on the Corporate Governance. Report end the of at 14. Conservation of Energy and Technology is committed Absorption Your Company to Conservation of Energy through various Demand Side Management initiatives as well as fostering energy efficient appliances at highly discounted prices among your customers. In FY20, more than 6000 Mwh of energy savings have occurred due to Energy Saving programme in FY20 in Mumbai license area. These initiatives have been discussed in greater details in the information on conservation of energy and technology absorption stipulated under Section 134 (3) (m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014, which is attached as Annexure - IV to this Report. 15. Corporate Governance Pursuant to Regulation 34 of the Listing Regulations, Report on Corporate Governance along with the certificate from a Practicing Company Secretary certifying compliance with conditions of Corporate Governance is annexed to this Report. 16. Vigil Mechanism Your Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behaviour. In line with the TCoC, any actual or potential violation, howsoever insignificant or perceived as such, would be a matter of serious concern for the Company. The role of the employees in pointing out such violations of the TCoC cannot be undermined. for directors and employees Pursuant to Section 177(9) of the Act, a vigil mechanism was established to instances of unethical report to the management behaviour, actual or suspected, fraud or violation of the Company’s code of conduct or ethics policy. The Vigil Mechanism provides a mechanism for employees of the Company to approach the Chief Ethics Counsellor (CEC)/Chairman of the Audit Committee of the Company for redressal. No person has been denied access to the Chairman of the Audit Committee. formed 17. Risk Management Your Board has a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. Furthermore, your Company has set up a robust internal audit function which reviews and ensures sustained (IFC) effectiveness of its work. by adopting a systematic approach risk The development management policy has been the Integrated Report (pages 32-33). implementation of in Internal Financial Controls covered and to Internal Financial Control Systems and their Adequacy The Company’s internal control systems are commensurate with the nature of its business, the size and complexity of its operations and such internal financial controls with reference to the Financial Statements are adequate. Refer Integrated Report (page 34). 18. Details of Significant and Material Orders No significant and materials orders were passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future. 19. Statutory and Branch Auditors M/s. S R B C & CO. LLP (SRBC) (ICAI Firm Registration Number: 324982E/E300003), who is the statutory auditor of your Company, holds office until the conclusion of 103rd AGM to be held in the year 2022. to place requirement the matter relating The to appointment of auditors ratification by Members at every AGM has been done away with by the Companies (Amendment) Act, 2017 with effect from 7th May 2018. Accordingly, no resolution is being proposed for ratification of appointment of statutory auditors at the ensuing AGM. for The Company has in its Notice sought approval from the Members for passing a resolution vide Item No. 6 authorizing the Board to appoint Branch Auditors of any Branch office of the Company, whether existing or which may be opened/acquired, outside India, to act as Branch Auditors. 20. Statutory Auditors’ Report The standalone and the consolidated financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Act. 135 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm The Statutory Auditor’s report does not contain any qualifications, reservations, adverse remarks or disclaimers. The Statutory Auditors were present in the last AGM. 21. Cost Auditor and Cost Audit Report Your Board has appointed M/s Sanjay Gupta and Associates, Cost Accountants (Firm Registration No.000212), as Cost Auditors of the Company for conducting cost audit for the FY21. The Company has in its Notice sought approval from the Members for passing a resolution vide Item No. 7 for ratifying the remuneration payable to the Cost Auditors for FY21. Maintenance of cost records as specified by the Central Government under Section 148 (1) of the Act is not applicable to the Company. 22. Secretarial Audit Report M/s. Makarand M. Joshi & Co., Company Secretaries (Peer Review Number: P2009MH007000), were appointed as Secretarial Auditors of your Company to conduct a Secretarial Audit of records and documents of the Company for FY20. The Secretarial Audit Report confirms that the Company has complied with the provisions of the Act, Rules, Regulations, and Guidelines and that there were no deviations or non-compliances. The Secretarial Audit Report does not contain any remarks or reservations or adverse qualifications, disclaimers. The Secretarial Audit Report is provided in Annexure-V to this Report. The Company has devised proper systems to ensure the provisions of all applicable compliance with Secretarial Standards Institute of Company Secretaries of India and that such systems are adequate and operating effectively. issued by the the As per the requirements of Listing Regulations, Practicing Company Secretaries of respective material subsidiaries of the Company have undertaken secretarial audits of the material subsidiaries for FY20. The Audit Report confirms that the material subsidiaries have complied with the provisions of the Act, Rules, Regulations, and Guidelines and that there were no deviations or non-compliances. 23. Loans, Guarantees, Securities And Investments The Company, being an infrastructure company, is exempt from the provisions as applicable to loans, guarantees, security and investments under Section 186 of the Act. Therefore, no details are provided. Policy on Related Party Transactions and the same can be accessed using the following link: https://www.tatapower. com/pdf/aboutus/rpt-policy-framework-guidelines.pdf. During the year under review, all transactions entered into with the Audit Committee. Details of Related Party Transactions as per AOC-2 are provided in Annexure-VI to this Report. related parties were approved by 25. Sustainability The Company has continued its journey of practising sustainability through its core value of Leadership with Care for the environment, customers and shareholders, community and for our people. The Company’s efforts on sustainability were recognized at various platforms and a testimony to this were the it. Your Company various awards bestowed upon in was ranked 1st among power sector companies Futurescape National Responsible Business Ranking for Sustainability and Corporate Social Responsibility (CSR) released in November 2019 and won National Volunteering in Award February 2020. The Company also bagged the prestigious global Edison Award for promoting Energy and Resource Conservation under Club Enerji. for promoting Employee Volunteering 25.1 Care For Our Community/Community Relations Your Company actively worked on five thrust areas viz. education, health and sanitation, livelihood and skill building, water and financial inclusivity in which key flagship interventions were undertaken in the vicinity of the Company’s business presence and beyond, while maintaining focus on Affirmative Action (AA) initiatives of the Tata group impacting 27.10 lakh beneficiaries across Tata Power group companies in FY20 (including around 14.06 lakh beneficiaries on a Standalone basis). The CSR policy of the Company has been provided on the Company’s website at https://www.tatapower.com/pdf/ aboutus/csr-policy-14.pdf. its key subsidiaries are described The Company’s standalone CSR spend for FY20 stood at ₹ 3.80 crore against the 2% CSR obligation of ₹ 3.04 crore. Details of the consolidated CSR activities of your Company and in Social and Relationship Capital of Integrated Report (pages 82-93) as well as in the Business Responsibility Report (BRR). The annual report on CSR activities (standalone) is provided in Annexure-VII to this Report. On overall basis, the Tata Power group entities' expenditure on CSR activities stood at ₹ 39.97 crore against the CSR obligation of ₹ 33.30 crore (calculated as per Section 135 of the Act) in FY20. 24. Related Party Transactions 25.2 Affirmative Action In line with the requirements of the Act and the Listing Regulations, the Company has formulated a Under its AA program, your Company continued to focus on upliftment of Dalit and tribal communities through the 136 The Tata Power Company Limited Integrated Annual Report 2019-20Board's Report defined Es under AA viz. Employment, Entrepreneurship, Employability, Education and Essential Amenities around its operating sites. As part of the enhanced focus, Tata Power Skill Development Institute (TPSDI) inducted 25% trainees from AA communities and achieved remarkable placements post-training. In total, 4 lakh beneficiaries were covered under AA initiatives. Besides this, your Company also engaged in nurturing vendors and suppliers from AA communities to help with job creation. This has been further described in the section on Social and Relationship Capital of Integrated Report (Page 94). IR its the and Social, Report adopted Framework Environmental first recommended Integrated Integrated Reporting 25.3 Sustainability Reporting International Your Company has to Integrated Reporting Council 2019-20. prepare SEBI to be adopted on a voluntary basis by the top 500 companies, which are required to prepare BRR, in February 2017. The content of the report is in accordance with the Global Reporting Initiative (GRI) standards: Core option and espouses linkages from the National Voluntary Guidelines Economic (NVG) on responsibilities of the business as well as the United Nations Sustainable Development Goals (SDGs). The Integrated Report communicates Tata Power’s performance on financial and non-financial aspects to all stakeholders, underlying the importance of our leadership and strategy towards value creation. Environment 1. Your Company aims for environmental stewardship in the power industry through reduction in greenhouse gas emissions and release of air pollutants by continuously striving for efficiency in its operations and maintenance and following best practices to optimize the efficiency parameters like heat rate and auxiliary consumption of power generating stations. Your Company also has been consistently focussing on scaling up Renewables business as part of its stated strategic into new energy intent and also venturing efficient green business initiatives like Microgrids, EV charging, Home Automations, Solar Rooftop and exploring new opportunities in distribution businesses, thereby working towards its commitment of sustainable 'Green' growth. A brief outline of your Company’s ventures on these businesses and growth of renewables is given in the Manufactured Capital section of Integrated Report (pages 40-51). to be a pioneer 2. Health and Safety Health and Safety management is one of your Company’s topmost priority with a defined safety vision “To be a leader in Safety Excellence in the global power and energy business”. Your Company 3. employs a pro-active and pre-emptive approach to occupational health and safety and are committed to actively drive the agenda through the length and breadth of the organisation. Consequently, 100% of your contractual workforce are trained on various aspects of Occupational health and safety. Close monitoring of safety performance has also helped your Company to achieve desired goal of zero injuries and fatalities. The Suraksha mobile app is one such intervention that enables employees to conveniently report unsafe conditions. A detailed description of Health and Safety initiatives taken by your Company is outlined in Human Capital section of Integrated Report (pages 58-69). has Your Customer Relationship Your Company is steadily transitioning from a B2B or a B2G company to a B2C company with enhanced focus on value creation for customers. Foraying into various new business initiatives as a part of your sustainable growth strategies like rural electrification (microgrids), solar rooftop solutions, Electric Vehicle charging etc. are posing new customer service challenges. numerous Company touchpoints for customers to raise their queries and a structured process of tracking complaints and ensuring resolution within pre-defined timelines. Your Company has also been a pioneer in developing customer centric technology through innovation and digitisation. Few of such initiatives are Know Your Energy Consumption (KYEC), VoiceBot TINA, e-Nach, etc. all women Furthermore, your Company has been instrumental in raising energy conservation awareness as well as reducing the energy cost for the consumers through various initiatives such as “Be Green”, solar rooftop off-grid solutions etc. A detailed description of your customer relation measures is given in the Social and Relationship Capital section in the Integrated Report (pages 70-81). customer relations centre 4. Human Resource Management Your Company considers it imperative to create a work environment which is collaborative as well as learning and growth oriented to enable employees to perform at their full potential. Your HR strategy adopts a multipronged approach covering all the key facets of employee development. Learning as a stated value of the Company also sets the tone of your Company’s endeavour to develop competencies to rise to new challenges especially posed by changing strategies of foraying into new business areas and coming out of growth through conventional coal based thermal power generating assets. Some of the key Human Resource programmes of your Company are Talent Next, Ullhas, Youth Power 137 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Confluence, Gyankosh, Long-Service Award, etc. A detailed description is given in the Human Capital section of the Integrated Report (pages 58-69). also have been classified as unskilled, semi-skilled, skilled and highly skilled. 28. Disclosure requirements 25.4 Business Responsibility Report (BRR) The BRR is in line with the SEBI requirement based on the ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business’ notified by Ministry of Corporate Affairs (MCA), Government of India, in July 2011. Your Company reported its performance for FY20 as per the BRR framework, describing initiatives taken from an environmental, social and governance perspective. As per Regulation 34 of the Listing Regulations, a BRR is attached and is a part of this Annual Report. Since the Company is publishing this Report under IIRC, report on the nine principles of the National Voluntary Guidelines on social, environmental and economic responsibilities of business as framed by the MCA, is provided in relevant sections of IR with suitable references to the BRR. 25.5 Prevention of Sexual Harassment Disclosures in relation to the Sexual Harassment of (Prevention, Prohibition and Women at Workplace Redressal) Act, 2013 have been provided in the Report on Corporate Governance. 26. Extract of Annual Return Pursuant to Section 92 of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form MGT-9 is provided in Annexure - VIII to this Report and also available on https://www.tatapower.com/investor-relations/annual-return.aspx. 27. Particulars of Employees And Remuneration The information required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure - IX. and (Appointment Remuneration The information required under Rule 5(2) and (3) of the of Companies Managerial Personnel) Rules, 2014, is provided in the Annexure forming part of this Report. In terms of the first provision to Section 136 of the Act, the Report and Accounts are being sent to the Members excluding the aforesaid Annexure. Any Member interested in obtaining the same may write to the Company Secretary at investorcomplaints@tatapower.com. None the employees listed in the said Annexure are related to any Director of the Company. of The Company has devised proper systems to ensure the provisions of all applicable compliance with Secretarial Standards Institute of Company Secretaries of India and that such systems are adequate and operating effectively. issued by the 29. Deposits The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the Balance Sheet. 30. Foreign Exchange - Earnings and Outgo Particulars - Standalone Foreign Exchange Earnings Foreign Exchange Outflow mainly on account of: • • • Fuel purchase Interest on foreign currency borrowings, NRI dividends Purchase of capital equipment, components and spares and other miscellaneous expenses 31. Acknowledgements Figures in ₹ crore FY20 FY19 125 116 1,301 1,336 1,070 1,222 3 4 228 110 On behalf of the Directors of the Company, I would like to place on record our deep appreciation to our shareholders, customers, business partners, vendors - both international and domestic, bankers, financial institutions and academic institutions for all the support rendered during the year. The Directors are thankful to the Government of India, the various ministries of the State Governments, the central and state electricity regulatory authorities, communities in the neighbourhood of our operations, municipal authorities of Mumbai, and local authorities in areas where we are operational in India; as also partners, governments and stakeholders in international geographies where the Company operates, for all the support rendered during the year. Finally, we appreciate and value the contributions made by all our employees and their families for making the Company what it is. On behalf of the Board of Directors, Officers of the organisation are classified into five management work levels i.e. MA, MB, MC, MD and ME. The work levels are further divided into grades. Non- management employees are across different grades and Mumbai, 19th May 2020 N. Chandrasekaran Chairman (DIN: 00121863) 138 The Tata Power Company Limited Integrated Annual Report 2019-20Board's Report ANNEXURE - I : DIVIDEND POLICY (Ref.: Board's Report, Section 5) 1. Context 1.1 In July 2016, SEBI has inserted Regulation 43A with respect to Dividend Distribution Policy in Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, whereby the top 500 listed entities based on market capitalization (calculated as on 31st March of every financial year) are required to formulate a dividend distribution policy which shall be disclosed in their annual reports and on their websites and the dividend distribution policy shall also include certain stated parameters. Tata Power being one of the top 500 companies needs to frame such policy as per the SEBI regulations. 2. Background 2.1 The Company's overarching objective is to strike the right balance between adequately rewarding shareholders through dividend and providing enough funds to drive future growth both organic and inorganic to maximize long term sustainable shareholder value. 2.2 In order to be compliant with various statutes, the Company has to appropriate the following out of PAT earned each financial year: • Transfer to Debenture Redemption Reserves as per guidelines stated in Companies Act. Transfer to Contingencies Reserve as per Electricity Act. Servicing of Unsecured Perpetual Securities. Transfer to General Reserves. Dividend Distribution to shareholders dividend distribution tax. Any adjustments to Other Comprehensive Income (OCI) as per Ind AS guidelines. including • • • • • 2.3 Each financial year end, the Company management viz. the CFO in consultation with CEO & Managing Director recommends the amount to be declared as dividend to the Board along with all relevant workings, ratios, payouts, trends etc. As per the existing laws and rules, Interim dividends are confirmed by the shareholders and final dividends recommended by the Directors to shareholders for approval at the Annual General Meeting of the Company. [a] Circumstances under which the shareholders of the listed entities may or may not expect dividend: For the purposes of dividend distribution, the Company's shareholders may expect the following broad criteria to be followed by the Company - • Dividends may be expected the Company only after all required appropriations have been made and the resultant profit after from • • the appropriations is positive and sufficient distribution of dividends as per the parameters - financial or otherwise mentioned below in point no.(b). A lower dividend may be proposed in the years the Company has not made sufficient profits. that Any dividend arising from negative profits would not be expected to be made up through plough back from the Company's accumulated Reserves. However, in exceptional cases, considering the reasons for which the profits are negative for the year, the Board may recommend dividends out of accumulated profits. [b] Financial Parameters would ideally include: • • • • • • • profits adequacy adjustments Distributable after appropriating to all Reserves and making all adjustments but before providing for dividends and tax thereon. Special (upsides/downsides) which have affected the profits for the year in consideration. Historical trend of dividend declared rate per share for past 10 years. Total payout of dividend and dividend tax on the same in ₹ crore. Payout ratio on PAT and distributable profits. Earnings per share on distributable profits. Cash availability proposed dividend. paying the for [c] laws under applicable Internal and External factors to be viewed: • • • • • Profits projected for the ensuing financial year. Consolidated profits of Tata Power group. State of the economy. Change in rules, regulations and compliances. Restrictions including tax laws. Working capital needs of the Company. Projects complete the projects from Parent Company. Adequacy current and projected Cash flows and strain on the existing cash reserves on account of declaration of dividends. Dividend pay-out ratios of the companies in same Industry. Debt reduction plans of the Company. Securities buy-back plan, if any. in hand and support required to • • • • • • Company's the of 139 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report • • Mode of funding of the dividends proposed to be declared and cost of borrowings/ internal accruals. adequate to Necessity Reserves future Contingencies which have not yet materialized and are thus not currently accounted for. maintain for [d] Utilisation of Retained Earnings: • • • • Prime objective of retained earnings is to use it judiciously and invest either in existing projects of the Company, modernization not funded by consumers, new projects or growth areas approved by the Board, retiring high cost debt etc. The Company, on behalf of the shareholders, shall strive to grow its retained earnings at a rate which would be higher than the risk free rate of return that can be earned alternatively. The Company would also check its retained the debt-equity profile earnings vis-à-vis and ROE levels for the long-term investors of the Company. on the Company's Based projected Investment Opportunity balance, compared with the existing and projected debt-equity structure as well as the cost of external borrowings, reduced retained earnings need would be ascertained and accordingly funds would be deployed for the same. enhanced or the the [e] Parameters that shall be adopted with regard to various classes of shares: • as per Any current or future preference treatment shares, rights mentioned the therein, would be accorded preferential dividend distribution. Balance distribution would be effected by the Company for the equity share component. As and when Company issues other kind of shares, the Board may suitably amend this policy. • • This policy may be disclosed as per Regulations applicable. This policy may be subject to revision/ amendment as per MCA/SEBI guidelines issued from time to time. Company may modify adding, or provisions as deemed fit. the policy by some altering deleting [f] Others: • • • 140 • • • If revision/amendments are not consistent with the existing practice followed then such revision/amendments will supersede and the provisions will be modified accordingly. The Company proposes to limit the distribution of dividend in the range of 30% to 60% of distributable profits unless is reviewed by the Board again. Any payout of Dividend below 20% of distributable profits and above 60% would need be specifically approved by the Board as an exception to the policy. this policy 3. Subsidiary Companies - Draft Dividend Policy Subsidiary companies may consider the following aspects whilst dealing with their surplus profits and determining the best possible use for the same: Investments made by Parent Company in the Subsidiary have been approved based on IRR and cash flows reflected in the financial model used for investment approvals. • • • • • • As a majority shareholder, the Parent Company would be concerned about mode of distribution of the surplus cash earned by the Subsidiaries particularly because dividend is the only way to get returns on the investments made in that subsidiary. Subsequent the initial the subsidiary, any capex, growth or diversification plan of the Subsidiaries need to be placed to Tata Power Board for approval as per current practice due to the immediate decision required on providing equity funding and in some cases support to lenders. investment to in The Parent Company's Board would convey to the Subsidiary concerned, its ability (or otherwise) to support the requirements keeping in mind the overall leverage ratios and the specific equity raising plans at the parent level. It could also advise other suggested modes of funding the requirements. Subsidiary companies are expected to be familiar with the overall strategy set by the Parent Company and align itself to the strategic intent. All Subsidiaries/JV are expected to follow the principle of maximising the dividend payout unless specific purpose for retaining the funds is identified and agreed to with the Parent in its capacity as shareholder. As far as foreign Subsidiaries of the Parent Company are concerned, the Parent Company Board would play the role of advising the concerned Subsidiary of the usage of surplus funds of course the basic principles underlying remaining the same as above. The Tata Power Company Limited Integrated Annual Report 2019-20 Annexure - II : POLICY ON BOARD DIVERSITY AND DIRECTOR ATTRIBUTES (Ref.: Board's Report, Section 12) 1. Objective 1.1 The Policy on Board Diversity (‘the Policy’) sets out the approach to diversity on the board of directors (‘the Board’) of The Tata Power Company Limited (‘the company'). 1.2 The company recognises that diversity at board level is a necessary requirement in ensuring an effective board. A mix of executive, independent and other non-executive directors is one important facet of diverse attributes that the company desires. Further, a diverse board representing differences in the educational qualifications, knowledge, experience, gender, age, thought and perspective results in delivering a competitive advantage and a better appreciation of the interests of stakeholders. These differences should be balanced against the need for a cohesive, effective board. All board appointments shall be made on merit having regard to this policy. 2. Attributes of Directors 2.1 The following attributes need to be considered in considering optimum board composition: i) Gender diversity Having at least one woman director on the Board with an aspiration to reach three women directors. ii) Age The average age of board members should be in the range of 60 - 65 years. iii) Competency The board should have a mix of members with different educational qualifications, knowledge and with adequate experience in finance, accounting, economics, legal and regulatory matters, the environment, green technologies, operations of the company’s businesses, energy commodity markets and other disciplines related to the company’s businesses. iv) Independence The independent directors should satisfy the requirements of the Companies Act, 2013 (the Act) and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of the ‘independence’ criterion. • • • • • (other than with Additional Attributes The directors should not have any other pecuniary relationship with the company, its subsidiaries, associates or joint ventures and the company’s promoters, besides sitting fees and commission. The directors should not have any of their relatives (as defined in the Act and Rules made thereunder) as directors or employees or other stakeholders immaterial its subsidiaries, dealings) of the company, associates or joint ventures. The directors should maintain an arm’s length relationship between themselves and the employees of the company, as also with the directors and employees of its subsidiaries, associates, joint ventures, promoters and stakeholders for whom the relationship with these entities is material. The directors should not be the subject of allegations of illegal or unethical behaviour, in their private or professional lives. The directors should have ability to devote sufficient time to the affairs of the Company. 3. Role of the Nomination and Remuneration Committee 3.1 The Nomination and Remuneration Committee (‘the NRC’) shall review and assess board composition whilst or reappointment of independent directors. recommending appointment the 4. Review of the Policy 4.1 The NRC will review this policy periodically and recommend revisions to the board for consideration. 141 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report Annexure – III : REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES Ref.: Board's Report, Section 12) for philosophy remuneration The directors, Key Managerial Personnel (“KMP”) and all other employees of The Tata Power Company Limited (“company”) is based on the commitment of fostering a culture of leadership with trust. The remuneration policy is aligned to this philosophy. of of of 178(3) Section provisions remuneration policy has been prepared pursuant This to the the Companies Act, 2013 (“Act”) and Regulation 19 read with Part D of Schedule II of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) In case of any Regulations, 2015 (“Listing Regulations”). inconsistency between the provisions of law and this remuneration policy, the provisions of the law shall prevail and the company shall abide by the applicable law. While formulating this policy, the Nomination and Remuneration Committee (“NRC”) has considered laid down under Section 178(4) of the Act, which are as under: "(a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully; relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.” factors the (b) (c) Key principles governing this remuneration policy are as follows: Remuneration for independent directors and non-independent non-executive directors ¡ Independent directors (“ID”) and non-independent non-executive directors (“NED”) may be paid sitting fees (for attending the meetings of the Board and of committees of which they may be members) and commission within regulatory limits. ¡ ¡ Within the parameters prescribed by law, the payment of sitting fees and commission will be recommended by the NRC and approved by the Board. Overall remuneration (sitting fees and commission) should be reasonable and sufficient to attract, retain and motivate directors aligned to the requirements of the company (taking into consideration the challenges faced by the company and its future growth imperatives). Overall remuneration should be reflective of size of the company, complexity of the sector/industry/ company’s operations and the company’s capacity to pay the remuneration. ¡ ¡ ¡ ¡ ¡ Overall remuneration practices should be consistent with recognized best practices. Quantum of sitting fees may be subject to review on a periodic basis, as required. The aggregate commission payable to all the NEDs and IDs will be recommended by the NRC to the Board based on company performance, profits, return to investors, shareholder value creation and any other significant qualitative parameters as may be decided by the Board. The NRC will recommend to the Board the quantum of commission for each director based upon the outcome of the evaluation process which is driven by various factors including attendance and time spent in the Board and committee meetings, individual contributions at the meetings and contributions made by directors other than in meetings. In addition to the sitting fees and commission, the company may pay to any director such fair and reasonable expenditure, as may have been incurred by the director while performing his/her role as a director of the company. This could include reasonable expenditure incurred by the director for attending Board/Board committee meetings, general meetings, court convened meetings, meetings with shareholders/creditors/management, site visits, (organised by the company for directors) and in obtaining professional advice from independent advisors in the furtherance of his/her duties as a director. Remuneration for managing director (“MD”)/ executive directors (“ED”)/KMP/rest of the employees1 and training induction ¡ ¡ retain suitable for every The extent of overall remuneration should be talented and to attract and sufficient role. individuals qualified Hence remuneration should be: Market competitive (market for every role is defined as companies from which the company attracts talent or companies to which the company loses talent). Driven by the role played by the individual. Reflective of size of the company, complexity of the sector/industry/company’s operations and the company’s capacity to pay. Consistent with recognized best practices. Aligned to any regulatory requirements. 1 Excludes employees covered by any long term settlements or specific term contracts. The remuneration for these employees would be driven by the respective long term settlements or contracts. 142 The Tata Power Company Limited Integrated Annual Report 2019-20 ¡ In terms of remuneration mix or composition: The remuneration mix for the MD/EDs is as per the contract approved by the shareholders. In case of any change, the same would require the approval of the shareholders. Basic/fixed salary is provided to all employees to ensure that there is a steady income in line with their skills and experience. In addition to the basic/fixed salary, the company provides employees with certain perquisites, allowances and benefits to enable a certain level of lifestyle and to offer scope for savings and tax optimization, where possible. The company also provides all employees with a social security net (subject to limits) by covering medical expenses and hospitalisation through re-imbursements or insurance cover and accidental death and dismemberment through personal accident insurance. The company provides retirement benefits as applicable. In addition to the basic/fixed salary, benefits, perquisites and allowances as provided above, the company provides MD/EDs such remuneration by way of commission, calculated with reference to the net profits of the company in a particular financial year, as may be determined by the Board, subject to the overall ceilings stipulated in Section 197 of the Act. The specific amount payable to the MD/EDs would be based on performance as evaluated by the Board or the NRC and approved by the Board. The company provides the rest of the employees a performance linked bonus. The performance linked bonus would be driven by the outcome of the performance appraisal process and the performance of the company. • Remuneration payable to Director for services rendered in other capacity The remuneration payable to the Directors shall be inclusive of any remuneration payable for services rendered by such director in any other capacity unless: a) b) The services rendered are of a professional nature; and The NRC is of the opinion that the director possesses requisite qualification for the practice of the profession. • Policy implementation is responsible The NRC the remuneration policy to the Board. The Board is responsible for approving and overseeing implementation of the remuneration policy. recommending for 143 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report Annexure - IV : CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION (Ref.: Board's Report, Section 14) commercial Furthermore, your Company facilitated energy audits and walk down energy surveys for industrial and through energy consumers auditors accredited by Bureau of Energy Efficiency (BEE) helping them to get precise and actionable recommendations for energy saving. More than 6,000 MWh of energy savings have occurred due to energy savings programs in FY 20 & energy savings recommendations of more than 3,900 MWh have been given in the year. All the DSM programs were launched after due and prior approval of the Maharashtra Electricity Regulatory Commission (MERC). Your Company serves around 7 lakh consumers on a monthly basis in Mumbai. These bills are printed using recycled paper without harming the environment, which is equivalent to saving 2,600 trees annually. One of the significant steps taken in FY 20 is introduction the concept of “Paperless Office” focussing on majorly reducing usage of paper.as well as reducing cost of photocopying and courier. This initiative has led to reduction in turnaround time also. Your company also is instrumental in encouraging consumers to opt for paperless e-billing. During FY 20, around 34,065 consumers opted for e-billing in Mumbai. in Further, the Generation business, various initiatives for optimization/reduction of auxiliary power consumption at multiple operating plants included de-staging of CEPs at MPL, optimisation of mill operation and CWPs operation in Jojobera, optimising usage of non-essential air in Trombay, improvement of energy performance of HT drives in IEL (Kalinganagar ),installation of variable frequency drive in CEP area and reduction of clean up cycle time in CGPL. Additionally Robotic cleaning of module, re-conduiting of DC power cable, Drone based thermal imaging of solar assets, implementation of seasonal tilting are few measures implemented in the solar sites improving the efficiency in FY 20. A. Conservation Of Energy i. The steps taken for impact on conservation of energy: Your Company is a pioneer in propagating energy conservation and efficiency resulting in substantial benefits for customers. One of the noteworthy initiatives is "Know Your Electricity Consumption" (KYEC) a daily energy management online tool designed for HT Consumers to monitor their daily energy consumption primarily by comparing with half-yearly energy consumption for previous month. This service is also being extended to LT Consumers in a phased manner. This scheme also enables the customers to plan energy consumption plan for a particular period and also provides an alert system in case of breach of consumption from budgeted amount. One of the unique features is alerts for energy consumption during periods of no occupancy. Your Company launched a unique consumer initiative called ‘Be Green’ for residential customers in Mumbai to purchase energy efficient appliances at highly discounted prices along with extended warranty and doorstep delivery which, in turn, help consumers in reduction of their energy cost and energy consumption. than 8,700 energy efficient In FY 20, more appliances Refrigerators, Ceiling Split ACs, LED Tube lights have been provided to Mumbai consumers under this scheme. Fans, like Your company has also facilitated rooftop solar PV Net Metering and integration of consumer solar plants with Tata Power grid in Mumbai area., thereby helping consumers to harness solar energy. Consumers are also able to export the excess generation to grid and get a setoff in their electricity bill. 93 consumer owned rooftop solar PV plants having capacity of 5.4 Mwp have been integrated with grid in FY 20. In FY 20, a 20 kw rooftop solar system installed in the customer call centre in Mumbai making it a solar power call centre from 27th December, 2019. 144 The Tata Power Company Limited Integrated Annual Report 2019-20 B. Research And Development 1 Specific area in which R&D carried out by the Company • In partnership with IIT Mumbai, development of technologies for Carbon Capture for Indian Coal (Department of Science and Technology Funded Project). • Development of from Fly and Bottom Ash, a waste in our thermal plants, in partnership with Council of Scientific and Industrial Research labs across India. for value added products technologies • Development of a white paper in partnership with IIT Mumbai for utilization of Industrial Bi-products. • Development low voltage high -intensity lighting system for illumination of confined spaces. • Developed a Technology road map focussing on usage of hydrogen as fuel. • Deployment of energy storage/battery and EV charging station. • Advanced fine line double printing process for manufacturing silicon wafer solar cells. • Enhancement of the spider framework to support newer generation of sensors. 2 Benefits derived as a of the above R&D result • Reduction in emissions on combustion of Indian Coal in power plants. • Better waste disposal in line with environmental commitment in line with our 3 Future Plan of Action C. Technology Absorption 1 Efforts, Technology adaptation and innovation in brief, made towards Absorption, strategic objective. • Aiding the commitment of Circular Economy. • Conservation of energy and reduction in Carbon Footprint. • Hydrogen being a cleaner fuel will help reduce our Carbon Footprint. • Commitment towards greener economy and utility scale storage at prevailing tariffs. • Improvement in efficiency of Solar generation. • Deployment of Border Management capability with SPIDER framework as part of CIBMS program of MHA and in IPSS trials of Indian Air Force. • Investments towards SMART grid technologies such as Smart Meters, Sensors, Internet of Things (IOT) to make network more intelligent and efficient. • Development and upgradation of energy storage and battery system especially to meet high energy demand due to EV charging solutions etc. • Bottom Ash and waste plastic-based bricks for heavy load applications. • Adoption of Artificial Intelligence & Machine Learning (ML) for load forecasting for the Power System Control Centre. • Deployment of Unmanned Aerial Vehicle (UAV) to do thermal imaging of open switch yards to identify hotspots. • Deployment of robotics in generator inspection, painting of exterior walls, maintenance of solar farms. • Function specific robots for application in hydros and CW pipelines. 2 Benefits derived as a result of the above efforts • Devising methods for ash utilisation. • Better planning of generation leading to optimization of fuel inventory. • Safe operations and maintenance in open switchyards. • Increase in operational and maintenance efficiency. 145 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report 3 In case of imported technology (imported during the last five years reckoned from the beginning of the financial year), the following information may be furnished: a) Technology Imported b) Year of Import c) Has technology been fully absorbed? d) If not fully absorbed, areas where this has not taken place, future thereof and reasons plans of action 4 Expenditure on R & D a) Capital a) Inertial Navigation System (INS) from Honeywell, USA b) FY15 c) Technology was validated in pilot projects during FY16 and FY17 d) Technology to go for manufacturing a) Business Collaboration Pliot Project (Indigenization and digitalization) - ₹ 1.05 crore SED- ₹ 10.02 crore b) Revenue b) Nil Generation Business • Effective utilization of Fly Ash in Manufacturing of bricks, gainful utilization in cement plants, development of paints etc. • • Roll out of GE-APM IoT platform for on-line digitalized O&M performance monitoring and intervention. Cell overflow recovery, service water and fire water line replacements, early identification and rectification of DM water and steam losses options has enabled better utilization of water resources. Transmission And Distribution Business • Introduced Smart Meter Reading & Bill Distribution (SMRD) for improving process efficiency in meter reading and bill dispatch activities. • • • Centralized monitoring of operational parameters of LT feeder helping in load balancing and stable voltages. Battery storage with preferred bus arrangements for reducing asset stress during peak. Efficient Micro Grid that is able to supply power in consumer in rural areas. On behalf of the Board of Directors, N. Chandrasekaran Chairman (DIN: 00121863) Mumbai, 19th May 2020 146 The Tata Power Company Limited Integrated Annual Report 2019-20 Annexure - V : Secretarial Audit Report Ref.: Board's Report, Section 22) FORM No. MR-3 SECRETARIAL AUDIT REPORT For the Financial Year Ended 31st March, 2020 [Pursuant to Section 204 (1) of the Companies Act, 2013 and rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] To, The Members, The Tata Power Company Limited, Bombay House, 24 Homi Mody Street, Fort, Mumbai – 400001 We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by The Tata Power Company Limited (hereinafter called 'the Company'). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon. Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2020 (hereinafter called the ‘Audit Period’) complied with the statutory provisions listed hereunder and also that the Company has proper Board- processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2020 according to the provisions of: (i) The Companies Act, 2013 (the Act) and the rules made thereunder; (ii) The Securities Contract (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder; (iii) The Depositories Act, 1996 and the Regulations and Bye- laws framed thereunder; (iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment and Overseas Direct Investment; (External Commercial Borrowings Not Applicable to the Company during the Audit Period) (v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’): (a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (b) The Securities and Exchange Board of India (c) (Prohibition of Insider Trading) Regulations, 2015; The Securities and Exchange Board of (Depositories and Participants) Regulations, 2018; (d) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018; (Not Applicable to the Company during the Audit Period) India (e) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; (Not applicable to the Company during the Audit Period) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (f) (g) Securities and Exchange Board of India (Issue and Listing of Non-Convertible and Redeemable Preference Shares) Regulations, 2013; (Not Applicable to the Company during the Audit Period) (i) (h) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not applicable to the Company during the Audit Period) and The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018; (Not applicable to the Company during the Audit Period) (j) We have also examined compliance with the applicable clauses of the following: (i) issued by The Institute of Secretarial Standards Company Secretaries of India (ii) The Securities India (Listing Obligations and Disclosure Requirements) Regulations, 2015 Exchange Board of and 147 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. (ii) We further report that during the audit period, the Company has (i) modified its Scheme of Arrangement for transfer of its Strategic Engineering Division to Tata Advanced Systems Limited issued allotted unsecured, Non-Cumulative, Redeemable, Taxable, Listed, Rated Non-Convertible Debentures of ` 1,500 Crore. issued and allotted secured, Non-cumulative, Redeemable, Taxable, Unlisted, Rated Non-Convertible Debentures of ` 220 Crore. and (iii) For Makarand M. Joshi & Co. Practicing Company Secretaries Makarand Joshi Partner FCS No. 5533 CP No. 3662 UDIN: F005533B000231913 Peer Review No: P2009MH007000 Place: Mumbai Date: 12th May, 2020 This Report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report. Board's Report During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines and Standards, etc. regard further report that, having We the compliance system prevailing in the Company and on the examination of the relevant documents and records in pursuance thereof, on test-check basis, the Company has complied with the following laws applicable specifically to the Company: to (i) The Electricity Act, 2003 (ii) The Indian Electricity Rules, 1956 (iii) The rules, regulations and applicable order(s) under Central and State Electricity Regulatory Commissions/ Authority (iv) The Energy Conservation Act, 2001 We further report that: The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice was given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. All decisions at Board Meetings and Committee Meetings are carried out unanimously as recorded in the minutes of the meetings of the Board of Directors or Committee of the Board, as the case may be. 148 The Tata Power Company Limited Integrated Annual Report 2019-20 ‘Annexure A’ To, The Members, The Tata Power Company Limited, Bombay House, 24 Homi Mody Street, Fort, Mumbai – 400001 Our report of even date is to be read along with this letter. 1. Maintenance of secretarial record is the responsibility of the management of the company. Our responsibility is to express an opinion on these secretarial records based on our audit. 2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion. 4. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc. 5. 6. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedure on test basis. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company. For Makarand M. Joshi & Co. Practicing Company Secretaries Makarand Joshi Partner FCS No. 5533 CP No. 3662 UDIN: F005533B000231913 Peer Review No: P2009MH007000 3. We have not verified the correctness and appropriateness of financial records and Books of Account of the Company. Place: Mumbai Date: 12th May, 2020 149 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report Annexure - VI : Related Party Transactions Ref.: Board's Report, Section 24) FORM No. AOC-2 Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto [Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014] 1. Details of contracts or arrangements or transactions not at arm’s length basis: Date(s) of approval by the Board Amount paid as advances, if any Justification for entering into such contracts or arrangements or transactions Date on which the special resolution was passed in general meeting as required under first proviso to Section 188 08.11.2019 Nil N.A. For use of Board App software for Board and Committee meetings and for Directors evaluation. Name(s) of the related party and nature of relationship Nature of contracts/ arrange- ments/ transactions Duration of the contracts/ arrange- ments/ transactions Tata Consultancy Services Limited For a period of 5 years from 27th May 2018 to 26th May 2023 Addendum No.1 to TCS Board App and Service Agreement for use of Board App software for Board and Committee meetings and for Directors evaluation. Salient terms of the contracts or arrangements or transactions including the value, if any Addendum dated 5th February 2020 to TCS Board App and Service Agreement for use of Board App software for Board and Committee meetings and for Directors evaluation. Consideration value approx. ₹ 26 lakh p.a. excluding taxes. 2. Details of material contracts or arrangement or transactions at arm’s length basis: Name(s) of the related party and nature of relationship Nature of contracts/ arrangements/ transactions Duration of the contracts/ arrangements/ transactions Salient terms of the contracts or arrangements or transactions including the value, if any Date(s) of approval by the Board, if any Amount paid as advances, if any There are no material contracts or arrangements or transactions at arm’s length basis Mumbai, 19th May 2020 150 On behalf of the Board of Directors, N. Chandrasekaran Chairman (DIN: 00121863) The Tata Power Company Limited Integrated Annual Report 2019-20 ANNEXURE - VII : ANNUAL REPORT ON CSR ACTIVITIES (Ref.: Board's Report, Section 25) 1. A brief outline of the company’s CSR policy, including an overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs. Tata Power CSR Policy outlines five community development: thrust areas for • Education (VIDYA) • Livelihood & Skill Building (DAKSH & SAMMRIDDHI) • Water (for drinking & irrigation) (AMRUTDHARA) • Health and Sanitation (AROGYA) • Financial Inclusivity (ADHIKAAR) The Company focussed on replication, innovation and scalable initiatives with long term sustainability. Key flagship initiatives across locations helped achieve sustainable results and change to the communities. Tata Power Community Development Trust (TPCDT) has internal capabilities to execute CSR programs effectively and efficiently. The Company’s CSR policy, including overview of projects or programs undertaken is provided on the Company’s website. 2. The composition of the CSR Committee Ms. Anjali Bansal- Chairperson and Independent Director Mr. K.M. Chandrasekhar-Independent Director Mr. Praveer Sinha- CEO and Managing Director 3. 4. Average net profit of the company for financial years last three ₹ 152.17 crore Prescribed CSR Expenditure (two percent of the amount as in item 3 above) ₹ 3.04 crore 5. Details of CSR spend during the financial year (a) Total amount spent for the financial year ₹ 3.80 crore (b) Amount unspent, if any Nil (c) Manner in which the amount spent during the Detailed overleaf financial year 151 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report Sl. No CSR project or activity identified Sector in which the Project is covered I II Education Livelihood & Skill Building (Focus Areas: Skill Development, Vocational training, Promote Livelihood practices among farmers/ fishermen, Income Generation activities for Women Self Help Groups) Promotion of Education Livelihood enhancement projects; Promoting gender equality, empowering women and measures for reducing inequalities faced by socially and economically backward groups III Water (Drinking & Irrigation) IV Health & Sanitation V VI Financial Inclusivity Affirmative Action (AA) Sports and Others VII Total 152 Livelihood enhancement projects; Promoting gender equality, empowering women and measures for reducing inequalities faced by socially and economically backward groups Education, Employability, Entrepreneurship, Essential Amenities, Sports, and Community Engagement Project or Programs (1) Local area or other (2) Specify the State and district where projects or programs were under taken Amount outlay (budget) project or programs wise (₹ in lakh) 59 160 Amount spent on the projects or programs Sub-heads: (1) Direct Expenditure on projects or Programs (2) Overheads (₹ in lakh) 59 165 Local Areas • Maval, Mulshi (Hydros) • Trombay, Distribution License Area • Mundra State: • Maharashtra • Gujarat District: • Pune • Mumbai • Kutch 21 36 16 12 21 35 15 85 Cumulative expenditure upto the reporting period (as on 31.03.2020) (₹ in lakh) Amount spent: Direct or through implementing agency Direct: Tata Power Implementation Agency (internal): • Tata Power Community Development Trust (TPCDT) • Employee Volunteers 1,486 5,514 174 1,340 89 2,861 304 380 11,464 The Tata Power Company Limited Integrated Annual Report 2019-20 Key Highlights of the CSR Program Tata Power (on a standalone basis) CSR Initiatives covered 14.06 lakh beneficiaries across 165 locations in Maharashtra and Gujarat. Thrust area-wise details are as follows: • • Details of Education Initiatives (VIDYA): • 89,282 e-Vidya (Digital Learning) and Vidya Sagar (Remedial Coaching) across all locations. students were covered under • 60% overall academic performance improved through various education initiatives from Digital learning to teachers training. Details of Health and Sanitation Initiatives (MAMTA & SAMMAAN): • 2.37 lakh women and children were covered under maternal and child health initiatives. • • • Focus was on adolescent girls and youth to enhance awareness on life skill education and anaemia control. Collaboration with stakeholders and government to promote sanitation resulted in improvement in adoption of best sanitation practices by the community. This year 1,169 camps are organised and approximately 21,625 patients are treated through MMU services. Details of Livelihood (SAMRIDDHI) and Skill Building (DAKSH) Initiatives: • 1.01 lakh impacted through farmed and non-farmed based livelihood initiatives. • • • • • Under Samriddhi, farm based agriculture initiatives under across locations with focus on vermi-compost, mushroom cultivation, shrimp and Bombay duck farming, horticulture promotion sustainable agri practices and establishment of knowledge dissemination centre for farmers across all locations covering farmers/fishermen. Tata Power Skill Development Institute ('TPSDI") has also adopted and rolled out skill training exclusively for women replicating ABHA model in Mumbai In FY20, the total number of TPSDI trainees were 22,858 out of which, 2,113 were unemployed youth. 38.6 % of the unemployed youth were from SC/ST communities. 91 % of eligible youth were provided placement. Dhaaga (Women Micro-Enterprise) covered 1,170 members across 19 locations in 8 states. 50+ Exhibition cum sales organized with order value exceeding R 60 lakh across Mumbai, Bengaluru, Pune, Delhi, Thane and Kolkata in collaboration with major corporates including TCS, Titan, Axis Bank, HDFC Bank, Phillips, Godrej, Capgemini etc. Collaboration with Amazon India led to Dhaaga products available in Amazon Saheli platform resulting in online sales and marketing. Focus on Youth skilling under Daksh led to youth training under various vocational courses and TPSDI initiatives with 25% from Affirmative Action community. Maval Dairy- Women centre dairy based enterprise witnessed the successful launch of 10,000 Litres per day Milk processing Plant covering 1,500 women members across 41 villages. This Initiative was dedicated to socio economic empowerment of women and had the pride of being Maharashtra’s 1st and All India 2nd All Women Dairy Farmer Producer Company. Details of Water Initiatives (AMRUTDHARA): lakh • in coverage of 5.91 Participatory Ground Water Water beneficiaries Management and Drinking Water initiatives. Initiatives resulted under • Initiative like water ATM is a sustainable solution and in future community take the responsibility. Details of Financial Inclusivity (ADHIKAAR): • 2.9 lakh beneficiaries covered with resources accessed under various Govt. Schemes by communities. Volunteering (ARPAN): • This year marked 1.7 lakh volunteering hours. Highest ever in Tata Power's history. • • Tata Power also received the National recognition for Best Corporate in Promoting Employee Volunteering at National Volunteer Conclave organized by IVolunteer- national platform for promoting volunteering. It also bagged 5 awards at Tata Group Volunteering Recognition platform. COVID-19 Response: (Till 31st March 2020): • Nearly 3 lakh people linked with PDS shops to get 50 Kg. of food grains. • • • • • • • List of 5,000 migrant workers across Mumbai surveyed and submitted to Government for necessary essential support Ensuring Water ATM run by community. uninterrupted water supply through Facilitation of supply of green fodder for the 3,600 cattle daily amounting to 43 MT. Uninterrupted supply of drinking water for the transient fishermen and other migrant population. Supply and distribution of more than 1.8 lakh face masks by Dhaaga Women members in Jharkhand, Odisha and Maharashtra. Supply and Spray of disinfectant villages of Jharkhand. in the peripheral Awareness generation on social distancing and distribution of hygiene kits to villagers and migrant workers. 153 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report CSR Awards and Recognition received in FY19 Tata Power recognized for promoting Skill upgradation at • ITI Jawhar on World Youth Skills day by Hon’ble Governor and Hon’ble Minister for Skill Development, Maharashtra. Tata Group TVW 11 Volunteering Award for Most Unique Activity intervention and Best Collaboration in TVW 12. the box) (out of Maithon wins CSR Award from Govt. of Netherlands for promoting Sanitation Practices under 1 Million Toilet Campaign. TPSDI received Asia’s Training & Development Excellence Awards. CGPL received Certificate of Appreciation for PGWM from Govt of Gujarat. • • • • • • Two of the Company's flagship CSR initiatives Dhaaga and Participatory Ground Water Management (PGWM) won Gold and Bronze medal respectively in Asian Customer Engagement Forum (ACEF) CSR Excellence Awards 2019. The CSR Skill Building Initiatives . Journal Award 2019 to TPSDI for (Global) WABA Trombay and Mulshi for promoting Maternal and Child Health consecutively for 6th year. recognition 2019 to Breastfeeding Promotion Network of India (BPNI) 2019 recognizes Tata Power for promoting Maternal and Child Health. Tata Power has won the I-Volunteer Awards for Leader in Employee Volunteering category 2020. Tata Power won 5 awards at Tata volcon 2020. In case the company has failed to spend the two percent of the average net profit of the last three financial years or any part thereof, the company shall provide the reasons for not spending the amount in its Board Report. Not Applicable A responsibility statement of the CSR Committee that the implementation and monitoring of CSR policy, is in compliance with CSR objectives and Policy of the Company. The implementation and monitoring of the CSR Policy is in compliance with CSR objectives and Policy of the Company. • • • • 7. 8. Anjali Bansal Chairperson, CSR Committee (DIN: 00207746) Praveer Sinha CEO & Managing Director (DIN: 01785164) 154 The Tata Power Company Limited Integrated Annual Report 2019-20 Annexure - VIII : Extract of Annual Return (Ref.: Board's Report, Section 26) FORM No.MGT-9 EXTRACT OF ANNUAL RETURN as on the financial year ended on 31st March 2020 [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014] I. CIN: L28920MH1919PLC000567 Registration Date: 18th September 1919 Registration And Other Details: i) ii) iii) Name of the Company: The Tata Power Company Limited iv) v) Category/Sub-Category of the Company: Public Company limited by shares Address of the Registered office and contact details: Bombay House, 24, Homi Mody Street, Mumbai - 400 001. Tel.: 022 6665 8282 Fax: 022 6665 8801 E-mail: tatapower@tatapower.com Website: www.tatapower.com vi) Whether listed company: Yes vii) Name, Address and Contact details of Registrar and Transfer Agent, if any: TSR Darashaw Consultants Private Limited (formerly known as TSR Darashaw Limited) 6-10, Haji Moosa Patrawala Industrial Estate, 20, Dr. E. Moses Road, Mahalaxmi, Mumbai - 400 011. Tel.: 022 6656 8484 Fax.: 022 6656 8494. E-mail: csg-unit@tsrdarashaw.com Website: www.tsrdarashaw.com II. Principal Business Activities Of The Company All the business activities contributing 10% or more of the total turnover of the company shall be stated:- Sl.No. Name and Description of main products/services NIC Code of the product/service % to total turnover of the company 1 Power Supply & Transmission charges 3510 94 III. Particulars Of Holding, Subsidiary And Associate Companies Name and Address of the Company * CIN/GLN Sl. No. 1 2 3 4 5 6 Af-Taab Investment Co. Ltd. Corporate Center, B Block, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 Tata Power Trading Co. Ltd. Carnac Receiving Station, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 Powerlinks Transmission Ltd.# 10th Floor, DLF Tower-A, District Center-Jasola, New Delhi 110025 Maithon Power Ltd. Corporate Center, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 NELCO Ltd. MIDC, Plot No. EL 6, TTC Industrial Area, Electronics Zone, Mahape, Navi Mumbai 400710 Tatanet Services Ltd. MIDC, Plot No. EL 6, TTC Industrial Area, Electronics Zone, Mahape, Navi Mumbai 400710 U65990MH1979PLC021037 Holding/ Subsidiary/ Associate Subsidiary % of shares held * 100 Applicable Section Section 2(87) U40100MH2003PLC143770 Subsidiary 100 Section 2(87) U40105DL2001PLC110714 Subsidiary 51 Section 2(87) U74899MH2000PLC267297 Subsidiary 74 Section 2(87) L32200MH1940PLC003164 Subsidiary 50.04 Section 2(87) U67120MH1987PLC044351 Subsidiary 50.04 Section 2(87) 155 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report Name and Address of the Company * CIN/GLN Sl. No. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Nelco Network Products Ltd. EL-6, TTC Industrial Area, MIDC, Mahape, Navi Mumbai 400710 Industrial Energy Ltd. # c/o The Tata Power Co. Ltd., Corporate Center, A Block, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 TP Renewable Microgrid Ltd. (Formerly known as Industrial Power Utility Ltd.) c/o The Tata Power Co. Ltd., Corporate Center, A Block, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 Tata Power Delhi Distribution Ltd. NDPL House, Hudson Lines, Kingsway Camp, Delhi 110009 NDPL Infra Ltd. Jeevan Bharati Tower #1, 10th Floor, 124, Connaught Circus, New Delhi 110001 Coastal Gujarat Power Ltd. 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 Tata Power Renewable Energy Ltd. c/o The Tata Power Co. Ltd., Corporate Center, A Block, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 Tata Power Green Energy Ltd. B Block, Corporate Center, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 Supa Windfarm Ltd. c/o The Tata Power Co. Ltd., Corporate Center, A Block, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 Nivade Windfarm Ltd. c/o The Tata Power Co. Ltd., Corporate Center, A Block, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 Poolavadi Windfarm Ltd. c/o The Tata Power Co. Ltd., Corporate Center, A Block, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 Indo Rama Renewables Jath Ltd. c/o The Tata Power Co. Ltd., Corporate Center, A Block, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 Vagarai Windfarm Ltd. c/o The Tata Power Co. Ltd., Corporate Center, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 TP Kirnali Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 TP Solapur Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 156 U32309MH2016PLC285693 Holding/ Subsidiary/ Associate Subsidiary % of shares held * 50.04 Applicable Section Section 2(87) U74999MH2007PLC167623 Subsidiary 74 Section 2(87) U40100MH2007PLC168291 Subsidiary 100 Section 2(87) U40109DL2001PLC111526 Subsidiary 51 Section 2(87) U40106DL2011PLC223982 Subsidiary 51 Section 2(87) U40102MH2006PLC182213 Subsidiary 100 Section 2(87) U40108MH2007PLC168314 Subsidiary 100 Section 2(87) U40108MH2011PLC211851 Subsidiary 100 Section 2(87) U40300MH2015PLC270878 Subsidiary 100 Section 2(87) U40300MH2015PLC271114 Subsidiary 100 Section 2(87) U40300MH2016PLC271899 Subsidiary 74 Section 2(87) U40300MH2012PLC316963 Subsidiary 100 Section 2(87) U40106MH2017PLC291708 Subsidiary 72 Section 2(87) U40100MH2020PLC337950 Subsidiary 100 Section 2(87) U40108MH2020PLC338268 Subsidiary 100 Section 2(87) The Tata Power Company Limited Integrated Annual Report 2019-20 Name and Address of the Company * CIN/GLN Sl. No. 22 Walwhan Renewable Energy Ltd. U40103MH2009PLC197021 Holding/ Subsidiary/ Associate Subsidiary % of shares held * 100 Applicable Section Section 2(87) 23 24 c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 Clean Sustainable Solar Energy Pvt. Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 Dreisatz Mysolar24 Pvt. Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400 009 U40300MH2014PTC254371 Subsidiary 99.99 Section 2(87) U40102MH2009PTC326890 Subsidiary 100 Section 2(87) 25 MI Mysolar24 Pvt. Ltd. U40106MH2009PTC326791 Subsidiary 100 Section 2(87) 26 27 c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400 009 Northwest Energy Pvt. Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 Solarsys Renewable Energy Pvt. Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400 009 U40108MH2008PTC182762 Subsidiary 100 Section 2(87) U74999MH2004PTC325049 Subsidiary 100 Section 2(87) 28 Walwhan Solar Energy GJ Ltd. U40104MH2008PLC184134 Subsidiary 100 Section 2(87) c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 29 Walwhan Solar Raj Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 30 Walwhan Solar BH Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 31 Walwhan Solar MH Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 32 Walwhan Wind RJ Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 33 Walwhan Solar AP Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 34 Walwhan Solar KA Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 35 Walwhan Solar MP Ltd. c/o The Tata Power Co. Ltd., Corporate Centre B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 U40105MH2010PLC202097 Subsidiary 100 Section 2(87) U40106MH2010PLC209615 Subsidiary 100 Section 2(87) U40108MH2006PLC165673 Subsidiary 100 Section 2(87) U40108MH2006PLC325050 Subsidiary 100 Section 2(87) U40109MH2008PLC178769 Subsidiary 100 Section 2(87) U40300MH2012PLC233418 Subsidiary 100 Section 2(87) U40106MH2010PLC206275 Subsidiary 100 Section 2(87) 157 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report Name and Address of the Company * CIN/GLN Sl. No. 36 Walwhan Solar PB Ltd. U40300MH2010PLC326052 Holding/ Subsidiary/ Associate Subsidiary % of shares held * 100 Applicable Section Section 2(87) c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 37 Walwhan Energy RJ Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 38 Walwhan Solar TN Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 39 Walwhan Solar RJ Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 40 Walwhan Urja Anjar Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 41 Walwhan Urja India Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 Dugar Hydro Power Ltd. # Santosh Bhavan, 1st Floor, Near Govt. Middle School, Mehli, PO Kasumpti, Shimla 171009 Tata Power Solar Systems Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 Chirasthaayee Saurya Ltd. c/o The Tata Power Co. Ltd., Corporate Center B, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 Tata Power Jamshedpur Distribution Ltd. c/o The Tata Power Co. Ltd., Corporate Center, A Block, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 TCL Ceramics Ltd. (formerly known as Tata Ceramics Limited), 26 Cochin Special Economic Zone, Kakkanad, Ernakulam 682037 TP Ajmer Distribution Ltd. c/o The Tata Power Co. Ltd., 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 Bhira Investments Pte. Ltd. 78 Shenton Way, 17-01/02, Singapore 07912 Bhivpuri Investments Ltd. IFS Court, Bank Street, Twenty-Eight, Cybercity Ebene 72201, Republic of Mauritius Khopoli Investments Ltd. IFS Court, Bank Street, Twenty-Eight, Cybercity Ebene 72201, Republic of Mauritius Trust Energy Resources Pte. Ltd. 78 Shenton Way, 17-01/02, Singapore 079120 42 43 44 45 46 47 48 49 50 51 158 U40105MH2010PLC206475 Subsidiary 100 Section 2(87) U40106MH2010PLC326794 Subsidiary 100 Section 2(87) U40300MH2011PLC213470 Subsidiary 100 Section 2(87) U40300MH2010PLC326888 Subsidiary 100 Section 2(87) U40109MH2006PLC165964 Subsidiary 100 Section 2(87) U40101HP2011PLC031626 Subsidiary 50.001 Section 2(87) U40106MH1989PLC330738 Subsidiary 100 Section 2(87) U4010MH2016PLC330252 Subsidiary 100 Section 2(87) U40300MH2012PLC237581 Subsidiary 100 Section 2(87) U26933KL1991PLC006018 Subsidiary 57.07 Section 2(87) U40100MH2017PLC293914 Subsidiary 100 Section 2(87) Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Subsidiary 100 Section 2(87) Subsidiary 100 Section 2(87) Subsidiary 100 Section 2(87) Subsidiary 100 Section 2(87) The Tata Power Company Limited Integrated Annual Report 2019-20 Sl. No. 52 53 54 55 Name and Address of the Company * CIN/GLN Tata Power International Pte. Ltd. 78 Shenton Way, 17-01/02, Singapore 079120 Far Eastern Natural Resources LLC, Russian Federation, 683024, Kamchatka Krai, Petropavlovsk-Kamchatsky city, 49 Zerkalnaya str., office 327. PT Sumber Energi Andalan Tbk. Prince Centre 8th Floor, JI. Jend. Sudirman Kav 3-4, Jakarta 10220, Indonesia Tubed Coal Mines Ltd. Century Bhavan, 3rd Floor, Dr. Annie Besant Road, Worli, Mumbai 400030 Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Holding/ Subsidiary/ Associate % of shares held * Applicable Section Subsidiary 100 Section 2(87) Subsidiary 100 Section 2(87) Subsidiary 92.50 Section 2(87) U10100MH2007PLC174466 Associate 40 Section 2(6) 56 Mandakini Coal Company Ltd. U10100DL2008PLC175417 Associate 33.33 Section 2(6) 57 58 59 60 61 62 63 64 65 66 67 Plot No.12, Sector B-1, Local Shopping Complex, Vasant Kunj, New Delhi 110070 Solace Land Holding Ltd. Plot No.12, Sector B-1, Local Shopping Complex, Vasant Kunj, New Delhi 110070 Yashmun Engineers Ltd. Dharavi Road, Next to MSEB, Matunga, Mumbai 400019 Tata Projects Ltd. Mithona Towers-1, 1-7-80 to 87, Prenderghast Road, Secunderabad, Hyderabad 500003 The Associated Building Co. Ltd. Bombay House, 24, Homi Mody Street, Mumbai 400001 Brihat Trading Pvt. Ltd. Bank of Baroda Building, Bombay Samachar Marg, Mumbai 400001 PT Mitratama Perkasa Menara Anugrah Lantai 10, Kantor Taman E3.3, Lot 8.6-8.7, JI DR Ide Anak Agung Gde Agung- Kawasan Mega Kuningan, Jakarta 12950, Indonesia PT Mitratama Usaha Menara Anugrah Lantai 10, Kantor Taman E3.3, Lot 8.6-8.7, JI DR Ide Anak Agung Gde Agung- Kawasan Mega Kuningan, Jakarta 12950, Indonesia PT Arutmin Indonesia 14th Floor, Bakrie Tower Complex, Rasuna Epicentrum, Jalan H.R. Rasuna Said, Jakarta 12940, Indonesia PT Kaltim Prima Coal Bakrie Tower, 15th Floor, JI. H.R. Rasuna Said, Kel. Karet Kuningan Kec. Setiabudi, Jakarta Selatan, Indonesia 12940 Indocoal Resources (Cayman) Ltd. P.O. Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands Indocoal KPC Resources (Cayman) Ltd. Citco Trustees (Cayman) Limited, 89 Nexus Way, Camana Bay, P.O. Box 31106, Grand Cayman KY1- 1205, Cayman Islands U70109DL2012PLC242177 Associate 33.33 Section 2(6) U29100MH1966PLC006109 Associate 27.27 Section 2(6) U45203TG1979PLC057431 Associate 47.78 Section 2(6) U45200MH1921PLC000866 Associate 33.14 Section 2(6) U51900MH1988PTC049926 Associate 33.21 Section 2(6) Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Associate 28.38 Section 2(6) Associate 28.38 Section 2(6) Associate 30 Section 2(6) Associate 30 Section 2(6) Associate 30 Section 2(6) Associate 30 Section 2(6) 159 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report Sl. No. 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 Name and Address of the Company * CIN/GLN PT Indocoal Kalsel Resources M&C Corporate Service Limited PO BOX 309 GT Ugland House, South Church Street, George Town, Grand Cayman, Cayman Island PT Indocoal Kaltim Resources Bakrie Tower, 12th floor, Rasuna Epicentrum Jl. H.R. Rasuna Said, Jakarta, Indonesia 12940 Dagachhu Hydro Power Corporation Ltd. Khebisa, Dzongkhang: Dagana, Bhutan Candice Investments Pte. Ltd. 60 Paya Lebar Road, #08-43 Paya Lebar Square, Singapore 409051 PT Nusa Tambang Pratama Menara Anugrah Lantai 10, Kantor Taman E3.3, Lot 8.6-8.7, JI DR Ide Anak Agung Gde Agung- Kawasan Mega Kuningan, Jakarta 12950, Indonesia PT Marvel Capital Indonesia Menara Anugrah Lantai 10, Kantor Taman E3.3, Lot 8.6-8.7, JI DR Ide Anak Agung Gde Agung- Kawasan Mega Kuningan, Jakarta 12950, Indonesia PT Dwikarya Prima Abadi Menara Anugrah Lantai 10, Kantor Taman E3.3, Lot 8.6-8.7, JI DR Ide Anak Agung Gde Agung- Kawasan Mega Kuningan, Jakarta 12950, Indonesia PT Kalimantan Prima Power Gd. Menara Duta Lt. 2 Wing A Jl. H. R. Rasuna Said Kav. B-9 Setibudi, Jakarta Selatan 12910 PT Guruh Agung Gd. Graha Kapital Lt. 2, Jl. Kemang Raya No. 4, Bangka, Jakarta Selatan PT Citra Prima Buana Gd. Menara Duta Lt. 2 Wing A, Jl. H. R. Rasuna Said Kav. B-9 Setibudi, Jakarta Selatan 12910 PT Citra Kusuma Perdana Gd. Menara Duta Lt. 2 Wing A, Jl. H. R. Rasuna Said Kav. B-9 Setibudi, Jakarta Selatan 12910 PT Baramulti Sukessarana Tbk Sahid Sudirman Center, 56C, Jl. Jendral Sudirman Kav. 86, Jakarta 10220, Indonesia PT Antang Gunung Meratus Sahid Sudirman Center, 56C, Jl. Jendral Sudirman Kav. 86, Jakarta 10220, Indonesia Adjaristsqali Netherlands B.V. Luna Arena, Herikerbergweg 238, 1101 CM Amsterdam, P.O. Box 23393, 1100 DW Amsterdam, The Netherlands Adjaristsqali Georgia LLC 6, I. Abashidze Str., Ap 2-3, Batumi, 6010, Georgia Koromkheti Netherlands B.V. Luna Arena, Herikerbergweg 238, 1101 CM Amsterdam, P.O. Box 23393, 1100 DW Amsterdam, The Netherlands Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company 160 Holding/ Subsidiary/ Associate Associate % of shares held * 30 Applicable Section Section 2(6) Associate 30 Section 2(6) Associate 26 Section 2(6) Associate 30 Section 2(6) Associate 30 Section 2(6) Associate 30 Section 2(6) Associate 30 Section 2(6) Associate 30 Section 2(6) Associate 30 Section 2(6) Associate 30 Section 2(6) Associate 30 Section 2(6) Associate 26 Section 2(6) Associate 26 Section 2(6) Associate 40 Section 2(6) Associate 40 Section 2(6) Associate 40 Section 2(6) The Tata Power Company Limited Integrated Annual Report 2019-20 Name and Address of the Company * CIN/GLN Sl. No. 84 85 86 87 88 89 Koromkheti Georgia L.L.C 6, I. Abashidze Str., Ap 2-3, Batumi, 6010, Georgia Itezhi Tezhi Power Corporation Ltd. Unit No. 13D, 2nd Floor, Pangaea Office Park Plot 2374, Great East Road, Show grounds Area Postnet 239, Private Bag E891 Mandahill Lusaka Resurgent Power Ventures Pte. Ltd. 1 Raffles Place, #13-01, One Raffles Place, Singapore 048616 Renascent Power Ventures Pvt. Ltd. Corporate Centre, B Block, 34, Sant Tukaram Road, Carnac Bunder, Mumbai 400009 Prayagraj Power Generation Company Ltd. Shatabdi Bhawan, B 12 & 13, Sector 4, Noida Gautam Buddha Nagar 201301 LTH Milcom Pvt. Ltd. L & T House, Ballard Estate, Mumbai 400001 Not applicable, foreign company Not applicable, foreign company Not applicable, foreign company Holding/ Subsidiary/ Associate % of shares held * Applicable Section Associate 40 Section 2(6) Associate 50 Section 2(6) Associate 26 Section 2(6) U40300MH2018FTC315149 Associate 26 Section 2(6) U40101UP2007SGC032835 Associate 19.50 Section 2(6) U74999MH2015PTC267502 Associate 33.33 Section 2(6) * Includes direct and indirect subsidiaries, joint ventures and associates. # Classified as Joint ventures as per Indian Accounting Standards. IV. Shareholding Pattern (Equity Share Capital Breakup as percentage of Total Equity): i) Category-wise Share Holding No. of Shares held at the beginning of the year (as on 01.04.2019) No. of Shares held at the end of the year (as on 31.03.2020) Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares % Change during the year Category of Shareholders A. Promoters (including Promoter Group) (1) Indian a) Individuals / HUF b) Central Govt. c) State Govt.(s) 0 0 0 d) Bodies Corporate 89,25,44,226 e) Bank/FI f) Any Other (Trust) 0 0 Sub-Total (A) (1): 89,25,44,226 (2) Foreign a) NRIs -Individuals b) Other - Individuals c) Bodies Corporate d) Banks/FI e) Any Other (specify) Sub-Total (A) (2): Total Shareholding of Promoters (A) =(A) (1)+(A)(2) 0 0 0 0 0 0 89,25,44,226 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 0.00 0.00 0 0 0 89,25,44,226 33.00 100,66,91,528 0 0 0.00 0.00 0 0 0 0 0 0 0 0 0 0 0 0.00 0.00 0.00 100,66,91,528 37.22 0 0 0.00 0.00 0.00 0.00 0.00 4.22 0.00 0.00 89,25,44,226 33.00 100,66,91,528 0 100,66,91,528 37.22 4.22 0 0 0 0 0 0 0.00 0.00 0.00 0.00 0.00 0.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 0.00 0.00 0.00 0.00 0.00 89,25,44,226 33.00 100,66,91,528 0 100,66,91,528 37.22 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.22 161 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report Category of Shareholders B. Public Shareholding (1) Institutions No. of Shares held at the beginning of the year (as on 01.04.2019) No. of Shares held at the end of the year (as on 31.03.2020) Demat Physical Total % of Total Shares Demat Physical Total % of Total Shares % Change during the year a) Mutual Funds / UTI 28,79,25,778 1,28,880 28,80,54,658 10.65 35,69,36,614 1,09,060 35,70,45,674 13.20 b) Bank/FI c) Central Govt. d) State Govt.(s) 2,13,28,182 4,23,122 2,17,51,304 66,63,070 0 66,63,070 44,300 2,47,120 2,91,420 e) Venture Capital Funds 0 f) Alternate Investment Funds 23,65,000 0 0 0 23,65,000 0.80 0.25 0.01 0.00 0.09 1,84,14,577 4,23,122 1,88,37,699 2,53,18,383 0 2,53,18,383 44,300 2,47,120 2,91,420 0 1,48,32,479 0 0 0 1,48,32,479 0.70 0.94 0.01 0.00 0.55 g) Insurance Companies 35,46,58,303 29,100 35,46,87,403 13.11 33,65,49,995 29,100 33,65,79,095 12.44 h) FIIs 82,67,700 50,480 83,18,180 4,34,048 17,800 4,51,848 0.31 0.00 0 0 0.02 0.00 0 2.55 -0.11 0.69 0.00 0.00 0.46 -0.67 -0.29 0.00 i) Foreign Venture Capital Funds j) Others (specify) j-i) Foreign Portfolio Investors (Corporate) j-ii) Foreign Nationals - DR j-iii) Foreign Bodies - DR j-iv) Foreign Institutional Investors - DR 0 71,03,88,567 0 0 0 0 0 0 0 0 71,03,88,567 26.26 50,31,63,143 0 0 0 0.00 0.00 0.00 0 12,21,000 0 50,31,63,143 18.60 -7.66 0 12,21,000 0 0.00 0.05 0.00 0.00 0.05 0.00 Sub-Total (B) (1): 139,16,40,900 8,78,702 139,25,19,602 51.48 125,69,14,539 8,26,202 125,77,40,741 46.50 -4.98 (2) Non-Institutions a) Bodies Corporate i) Indian ii) Overseas b) Individuals i) ii) Individual shareholders holding nominal share capital upto ₹ 1 lakh Individual shareholders holding nominal share capital in excess of ₹ 1 lakh c) Others (specify) 4,00,04,666 10,51,534 4,10,56,200 4,000 400 4,400 1.52 0.00 4,20,60,475 9,84,460 4,30,44,935 4,000 0 4,000 1.59 0.00 0.07 0.00 29,61,86,146 4,26,14,185 33,88,00,331 12.53 31,29,96,849 3,70,44,592 35,00,41,441 12.94 0.42 2,80,09,351 12,34,100 2,92,43,451 1.08 3,19,49,144 11,18,100 3,30,67,244 1.22 0.14 NBFCs registered with RBI 65,737 0 65,737 Trust 18,11,560 21,900 18,33,460 36,862 68,36,941 0 0 0 0 0 0 36,862 68,36,941 0 0 0.00 0.07 0.00 0.25 0.00 0.00 81,950 25,25,074 2,16,262 80,38,303 28,96,492 0 0 81,950 3,240 25,28,314 2,16,262 80,38,303 28,96,492 0.00 0.09 0.01 0.30 0.11 0 0.00 0.00 0.03 0.01 0.04 0.11 0.00 0.81 37,29,55,263 4,49,22,119 41,78,77,382 15.45 40,07,68,549 3,91,50,392 43,99,18,941 16.26 176,45,96,163 4,58,00,821 181,03,96,984 66.93 165,76,83,088 3,99,76,594 169,76,59,682 62.77 -4.17 265,71,40,389 4,58,00,821 270,29,41,210 99.93 266,43,74,616 3,99,76,594 270,43,51,210 99.98 18,31,000 1,300 18,32,300 0.07 4,21,000 1,300 4,22,300 0.02 0.05 -0.05 Directors & their relatives IEPF Suspense A/C QIB-Insurance Co. Regd. with IRDA Foreign Bodies Sub-total (B) (2): Total Public Shareholding (B) = (B)(1)+(B)(2) TOTAL (A)+(B) C. Shares held by Custodians for GDR & ADRs GRAND TOTAL (A)+(B)+(C) 265,89,71,389 4,58,02,121 270,47,73,510 100.00 266,47,95,616 3,99,77,894 270,47,73,510 100.00 0.00 162 0 0 0 0 0 0 0 0 0 The Tata Power Company Limited Integrated Annual Report 2019-20 ii) Shareholding of Promoters (including Promoter Group) Shareholder's Name Sl. No. Shareholding at the beginning of the year (as on 01.04.2019) Shareholding at the end of the year (as on 31.03.2020) No. of Shares % of total Shares of the company % of Shares Pledged/ encumbered to total shares No. of Shares % of total Shares of the company % of Shares Pledged/ encumbered to total shares % change in shareholding during the year 1 2 3 4 5 6 7 8 9 Tata Sons Private Limited (Promoter) Tata Steel Limited * Tata Investment Corporation Limited * Tata Industries Limited * Ewart Investments Limited * Tata Motors Finance Limited * Sir Dorabji Tata Trust * Sir Ratan Tata Trust * JRD Tata Trust * Total * Part of Promoter Group 83,97,99,682 31.05 1.43 95,39,46,984 35.27 3,91,22,725 68,47,842 45,35,200 22,29,657 9,120 0 0 0 1.45 0.25 0.17 0.08 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3,91,22,725 68,47,842 45,35,200 22,29,657 9,120 0 0 0 1.45 0.25 0.17 0.08 0.00 0.00 0.00 0.00 89,25,44,226 33.00 1.43 1,00,66,91,528 37.22 1.43 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.43 4.22 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.22 iii) Changes in Promoter’s (including Promoter Group) Shareholding (please specify, if there is no change) Sl. No Name of the Shareholder Shareholding at the beginning of the year (as on 1.04.2019) Date Reason Increase/Decrease in Shareholding Cumulative Shareholding during the year No. of shares % of total shares of the company No. of shares % of total shares of the company No. of shares % of total shares of the company 83,97,99,682 31.05 1 Tata Sons Private Limited (Promoter) 05.09.2019 Purchase of Shares 06.09.2019 Purchase of Shares 09.09.2019 Purchase of Shares 11.09.2019 Purchase of Shares 4,12,110 41,49,245 80,69,169 27,65,374 12.09.2019 Purchase of Shares 2,73,12,754 13.09.2019 Purchase of Shares 16.09.2019 Purchase of Shares 17.09.2019 Purchase of Shares 18.09.2019 Purchase of Shares 39,25,216 17,06,894 65,64,845 35,23,320 19.09.2019 Purchase of Shares 1,74,82,316 20.09.2019 Purchase of Shares 23.09.2019 Purchase of Shares 38,69,699 70,87,581 12.03.2020 Purchase of Shares 1,38,78,964 13.03.2020 Purchase of Shares 1,33,99,815 83,97,99,682 84,02,11,792 84,43,61,037 85,24,30,206 85,51,95,580 88,25,08,334 88,64,33,550 88,81,40,444 89,47,05,289 89,82,28,609 91,57,10,925 91,95,80,624 92,66,68,205 94,05,47,169 95,39,46,984 0.02 0.15 0.30 0.10 1.01 0.15 0.06 0.24 0.13 0.65 0.14 0.26 0.51 0.50 31.05 31.06 31.22 31.52 31.62 32.63 32.77 32.84 33.08 33.21 33.86 34.00 34.26 34.77 35.27 - 95,39,46,984 35.27 3,91,22,725 0.00 3,91,22,725 - 3,91,22,725 1.45 1.45 1.45 163 2 Tata Steel Limited * 3,91,22,725 1.45 31.03.2020 At the end of the year - No change 31.03.2020 At the end of the year - 0 - Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report Sl. No Name of the Shareholder Shareholding at the beginning of the year (as on 1.04.2019) Date Reason Increase/Decrease in Shareholding Cumulative Shareholding during the year 3 4 5 6 7 8 Tata Investment Corporation Limited * Tata Industries Limited * Ewart Investments Limited * Tata Motors Finance Limited * Sir Dorabji Tata Trust * Sir Ratan Tata Trust * 9 JRD Tata Trust * No. of shares % of total shares of the company 68,47,842 0.25 - No change 31.03.2020 At the end of the year 45,35,200 0.17 - No change 31.03.2020 At the end of the year 22,29,657 0.08 - No change 31.03.2020 At the end of the year 9,120 0.00 0 0 0 - No change 31.03.2020 At the end of the year 0.00 - No change 31.03.2020 At the end of the year 0.00 - No change 31.03.2020 At the end of the year 0.00 - No change 31.03.2020 At the end of the year No. of shares % of total shares of the company No. of shares % of total shares of the company 68,47,842 68,47,842 0.00 - 68,47,842 45,35,200 0.00 45,35,200 - 45,35,200 22,29,657 22,29,657 0.00 - 22,29,657 0.00 - 0.00 - 0.00 - 0.00 - 9,120 9,120 9,120 0 0 0 0 0 0 0 0 0 0.25 0.25 0.25 0.17 0.17 0.17 0.08 0.08 0.08 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 - 0 - 0 - 0 - 0 - 0 - 0 - * Part of Promoter Group 164 The Tata Power Company Limited Integrated Annual Report 2019-20 iv) Shareholding Pattern of Top 10 Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs): Sl. No Name of the Shareholder Shareholding at the beginning of the year (as on 01.04.2019) Date Reason Increase/ Decrease in Shareholding Cumulative Shareholding during the year No. of shares 11,38,29,237 % of total shares of the company 4.21 1 ICICI Prudential Value Discovery Fund 05.04.2019 Purchase of Shares 19.04.2019 Sale of Shares 26.04.2019 Purchase of Shares 03.05.2019 Purchase of Shares 10.05.2019 Purchase of Shares 17.05.2019 Purchase of Shares 24.05.2019 Sale of Shares 24.05.2019 Purchase of Shares 31.05.2019 Purchase of Shares 06.06.2019 Purchase of Shares 14.06.2019 Purchase of Shares 18.06.2019 Purchase of Shares 28.06.2019 Purchase of Shares 05.07.2019 Purchase of Shares 12.07.2019 Purchase of Shares 19.07.2019 Purchase of Shares 26.07.2019 Purchase of Shares 02.08.2019 Purchase of Shares 09.08.2019 Purchase of Shares 16.08.2019 Purchase of Shares 23.08.2019 Sale of Shares 23.08.2019 Purchase of Shares 30.08.2019 Purchase of Shares 06.09.2019 Purchase of Shares 13.09.2019 Sale of Shares 13.09.2019 Purchase of Shares 20.09.2019 Sale of Shares 20.09.2019 Purchase of Shares 27.09.2019 Purchase of Shares 30.09.2019 Purchase of Shares 04.10.2019 Purchase of Shares 11.10.2019 Purchase of Shares 18.10.2019 Purchase of Shares 25.10.2019 Sale of Shares 25.10.2019 Purchase of Shares 01.11.2019 Purchase of Shares 08.11.2019 Purchase of Shares 15.11.2019 Purchase of Shares 22.11.2019 Sale of Shares 22.11.2019 Purchase of Shares 29.11.2019 Purchase of Shares 06.12.2019 Sale of Shares 06.12.2019 Purchase of Shares 13.12.2019 Purchase of Shares No. of shares % of total shares of the company No. of shares 1 -1,606 8,030 8,030 13,37,433 5,075 -1,606 930 20,878 1,606 4,821 4,821 11,40,257 4,147 1,608 4,826 17,23,736 39,48,803 15,63,580 51,66,143 -8,01,000 60,77,480 5,35,640 33,15,173 -1,32,47,736 1,617 -31,12,000 1,617 2,359 920 8,825 2,501 509 -3,162 5,76,921 4,34,619 23,01,770 62,33,142 -1,582 1,44,921 9,89,025 -4,746 23,35,817 42,39,229 11,38,29,237 11,38,29,238 11,38,27,632 11,38,35,662 11,38,43,692 11,51,81,125 11,51,86,200 11,51,84,594 11,51,85,524 11,52,06,402 11,52,08,008 11,52,12,829 11,52,17,650 11,63,57,907 11,63,62,054 11,63,63,662 11,63,68,488 11,80,92,224 12,20,41,027 12,36,04,607 12,87,70,750 12,79,69,750 13,40,47,230 13,45,82,870 13,78,98,043 12,46,50,307 12,46,51,924 12,15,39,924 12,15,41,541 12,15,43,900 12,15,44,820 12,15,53,645 12,15,56,146 12,15,56,655 12,15,53,493 12,21,30,414 12,25,65,033 12,48,66,803 13,10,99,945 13,10,98,363 13,12,43,284 13,22,32,309 13,22,27,563 13,45,63,380 13,88,02,609 0.00 0.00 0.00 0.00 0.05 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.04 0.00 0.00 0.00 0.06 0.15 0.06 0.19 -0.03 0.22 0.02 0.12 -0.49 0.00 -0.12 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.02 0.02 0.09 0.23 0.00 0.01 0.04 0.00 0.09 0.16 % of total shares of the company 4.21 4.21 4.21 4.21 4.21 4.26 4.26 4.26 4.26 4.26 4.26 4.26 4.26 4.30 4.30 4.30 4.30 4.37 4.51 4.57 4.76 4.73 4.96 4.98 5.10 4.61 4.61 4.49 4.49 4.49 4.49 4.49 4.49 4.49 4.49 4.52 4.53 4.62 4.85 4.85 4.85 4.89 4.89 4.98 5.13 165 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report Sl. No Name of the Shareholder Shareholding at the beginning of the year (as on 01.04.2019) Date Reason Increase/ Decrease in Shareholding Cumulative Shareholding during the year No. of shares % of total shares of the company 2 Matthews Pacific Tiger Fund 3 Life Insurance Corporation of India 18,03,16,487 6.67 20,97,31,735 7.75 166 20.12.2019 Purchase of Shares 27.12.2019 Purchase of Shares 31.12.2019 Purchase of Shares 03.01.2020 Purchase of Shares 10.01.2020 Purchase of Shares 17.01.2020 Sale of Shares 17.01.2020 Purchase of Shares 24.01.2020 Purchase of Shares 31.01.2020 Sale of Shares 31.01.2020 Purchase of Shares 07.02.2020 Purchase of Shares 14.02.2020 Sale of Shares 14.02.2020 Purchase of Shares 21.02.2020 Sale of Shares 21.02.2020 Purchase of Shares 28.02.2020 Sale of Shares 28.02.2020 Purchase of Shares 06.03.2020 Sale of Shares 06.03.2020 Purchase of Shares 13.03.2020 Sale of Shares 13.03.2020 Purchase of Shares 20.03.2020 Sale of Shares 20.03.2020 Purchase of Shares 27.03.2020 Purchase of Shares 31.03.2020 Purchase of Shares 31.03.2020 At the end of the year No. of shares 65,08,985 2,346 24,12,000 1,80,000 45,67,182 -7,13,779 32,07,160 1,71,43,448 -9,000 44,90,632 67,93,672 -17,737 19,95,139 -8,668 37,67,574 -27,567 1,09,61,272 -1 1,20,53,965 -39,51,000 32,16,759 -90,000 2,36,930 18,72,323 49,17,065 - No change 31.03.2020 At the end of the year 0 - 05.04.2019 Sale of Shares 12.04.2019 Sale of Shares 19.04.2019 Sale of Shares 26.04.2019 Sale of Shares 03.05.2019 Sale of Shares 10.05.2019 Sale of Shares 17.05.2019 Sale of Shares 24.05.2019 Sale of Shares 31.05.2019 Sale of Shares 06.06.2019 Sale of Shares 14.06.2019 Sale of Shares 18.06.2019 Sale of Shares 28.06.2019 Sale of Shares 05.07.2019 Sale of Shares 17.01.2020 Purchase of Shares 24.01.2020 Purchase of Shares -9,55,000 -84,09,922 -61,39,070 -51,30,428 -4,80,000 -22,47,486 -32,96,306 -47,16,055 -49,92,000 -18,71,810 -15,47,035 -2,71,301 -17,73,000 -4,35,000 4,00,000 13,915 % of total shares of the company 0.24 0.00 0.09 0.01 0.17 -0.03 0.12 0.63 0.00 0.17 0.25 0.00 0.07 0.00 0.14 0.00 0.41 0.00 0.45 -0.15 0.12 0.00 0.01 0.07 0.18 No. of shares 14,53,11,594 14,53,13,940 14,77,25,940 14,79,05,940 15,24,73,122 15,17,59,343 15,49,66,503 17,21,09,951 17,21,00,951 17,65,91,583 18,33,85,255 18,33,67,518 18,53,62,657 18,53,53,989 18,91,21,563 18,90,93,996 20,00,55,268 20,00,55,267 21,21,09,232 20,81,58,232 21,13,74,991 21,12,84,991 21,15,21,921 21,33,94,244 21,83,11,309 - 21,83,11,309 18,03,16,487 18,03,16,487 - 18,03,16,487 20,97,31,735 20,87,76,735 20,03,66,813 19,42,27,743 18,90,97,315 18,86,17,315 18,63,69,829 18,30,73,523 17,83,57,468 17,33,65,468 17,14,93,658 16,99,46,623 16,96,75,322 16,79,02,322 16,74,67,322 16,78,67,322 16,78,81,237 % of total shares of the company 5.37 5.37 5.46 5.47 5.64 5.61 5.73 6.36 6.36 6.53 6.78 6.78 6.85 6.85 6.99 6.99 7.40 7.40 7.84 7.70 7.81 7.81 7.82 7.89 8.07 8.07 6.67 6.67 6.67 7.75 7.72 7.41 7.18 6.99 6.97 6.89 6.77 6.59 6.41 6.34 6.28 6.27 6.21 6.19 6.21 6.21 0.00 -0.04 -0.31 -0.23 -0.19 -0.02 -0.08 -0.12 -0.17 -0.18 -0.07 -0.06 -0.01 -0.07 -0.02 0.01 0.00 The Tata Power Company Limited Integrated Annual Report 2019-20 Sl. No Name of the Shareholder Shareholding at the beginning of the year (as on 01.04.2019) Date Reason Increase/ Decrease in Shareholding Cumulative Shareholding during the year 4 5 The New India Assurance Company Limited Reliance Capital Trustee Co. Ltd.- A/C Nippon India Growth Fund No. of shares % of total shares of the company 5,41,93,839 2.00 3,34,67,627 1.24 07.02.2020 Purchase of Shares 14.02.2020 Purchase of Shares 31.03.2020 At the end of the year 05.04.2019 Sale of Shares 12.04.2019 Sale of Shares 20.09.2019 Sale of Shares 31.03.2020 At the end of the year 05.04.2019 Purchase of Shares 12.04.2019 Purchase of Shares 19.04.2019 Purchase of Shares 26.04.2019 Sale of Shares 26.04.2019 Purchase of Shares 03.05.2019 Sale of Shares 03.05.2019 Purchase of Shares 10.05.2019 Sale of Shares 10.05.2019 Purchase of Shares 17.05.2019 Purchase of Shares 24.05.2019 Purchase of Shares 31.05.2019 Purchase of Shares 06.06.2019 Purchase of Shares 07.06.2019 Sale of Shares 07.06.2019 Purchase of Shares 11.06.2019 Sale of Shares 14.06.2019 Sale of Shares 14.06.2019 Purchase of Shares 18.06.2019 Sale of Shares 18.06.2019 Purchase of Shares 21.06.2019 Purchase of Shares 28.06.2019 Sale of Shares 28.06.2019 Purchase of Shares 05.07.2019 Sale of Shares 05.07.2019 Purchase of Shares 12.07.2019 Sale of Shares 12.07.2019 Purchase of Shares 19.07.2019 Sale of Shares 19.07.2019 Purchase of Shares 26.07.2019 Purchase of Shares 02.08.2019 Sale of Shares 02.08.2019 Purchase of Shares 09.08.2019 Sale of Shares 09.08.2019 Purchase of Shares 16.08.2019 Purchase of Shares 23.08.2019 Sale of Shares 23.08.2019 Purchase of Shares No. of shares 26,97,747 10,02,253 - -2,75,000 -7,25,000 -10,00,000 - 16,865 12,42,688 9,84,712 -63,175 13,74,577 -5,13,000 15,44,100 -1,25,830 1,59,000 5,70,080 17,19,171 2,17,374 82,442 -31,980 4,00,454 -50,718 -4,50,000 5,448 -605 5,98,454 16,21,806 -4,32,752 5,19,222 -44,87,442 30,14,364 -1,08,000 5,837 -4,86,000 12,880 31,26,745 -5,94,000 36,60,263 -3,51,966 6,84,849 2,02,245 -17,82,000 38,04,333 % of total shares of the company 0.10 0.04 - -0.01 -0.03 -0.04 - 0.00 0.05 0.04 0.00 0.05 -0.02 0.06 0.00 0.01 0.02 0.06 0.01 0.00 0.00 0.01 0.00 -0.02 0.00 0.00 0.02 0.06 -0.02 0.02 -0.17 0.11 0.00 0.00 -0.02 0.00 0.12 -0.02 0.14 -0.01 0.03 0.01 -0.07 0.14 No. of shares 17,05,78,984 17,15,81,237 17,15,81,237 5,41,93,839 5,39,18,839 5,31,93,839 5,21,93,839 5,21,93,839 3,34,67,627 3,34,84,492 3,47,27,180 3,57,11,892 3,56,48,717 3,70,23,294 3,65,10,294 3,80,54,394 3,79,28,564 3,80,87,564 3,86,57,644 4,03,76,815 4,05,94,189 4,06,76,631 4,06,44,651 4,10,45,105 4,09,94,387 4,05,44,387 4,05,49,835 4,05,49,230 4,11,47,684 4,27,69,490 4,23,36,738 4,28,55,960 3,83,68,518 4,13,82,882 4,12,74,882 4,12,80,719 4,07,94,719 4,08,07,599 4,39,34,344 4,33,40,344 4,70,00,607 4,66,48,641 4,73,33,490 4,75,35,735 4,57,53,735 4,95,58,068 % of total shares of the company 6.31 6.34 6.34 2.00 1.99 1.97 1.93 1.93 1.24 1.24 1.28 1.32 1.32 1.37 1.35 1.41 1.40 1.41 1.43 1.49 1.50 1.50 1.50 1.52 1.52 1.50 1.50 1.50 1.52 1.58 1.57 1.58 1.42 1.53 1.53 1.53 1.51 1.51 1.62 1.60 1.74 1.72 1.75 1.76 1.69 1.83 167 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report Sl. No Name of the Shareholder Shareholding at the beginning of the year (as on 01.04.2019) Date Reason Increase/ Decrease in Shareholding Cumulative Shareholding during the year No. of shares % of total shares of the company 30.08.2019 Purchase of Shares 06.09.2019 Sale of Shares 06.09.2019 Purchase of Shares 13.09.2019 Purchase of Shares 20.09.2019 Sale of Shares 20.09.2019 Purchase of Shares 27.09.2019 Sale of Shares 27.09.2019 Purchase of Shares 04.10.2019 Purchase of Shares 11.10.2019 Purchase of Shares 18.10.2019 Purchase of Shares 25.10.2019 Purchase of Shares 01.11.2019 Purchase of Shares 08.11.2019 Purchase of Shares 15.11.2019 Sale of Shares 15.11.2019 Purchase of Shares 22.11.2019 Sale of Shares 22.11.2019 Purchase of Shares 29.11.2019 Sale of Shares 06.12.2019 Sale of Shares 06.12.2019 Purchase of Shares 13.12.2019 Sale of Shares 13.12.2019 Purchase of Shares 20.12.2019 Purchase of Shares 27.12.2019 Sale of Shares 27.12.2019 Purchase of Shares 31.12.2019 Purchase of Shares 03.01.2020 Purchase of Shares 10.01.2020 Purchase of Shares 17.01.2020 Purchase of Shares 24.01.2020 Sale of Shares 24.01.2020 Purchase of Shares 31.01.2020 Sale of Shares 07.02.2020 Purchase of Shares 14.02.2020 Purchase of Shares 21.02.2020 Sale of Shares 28.02.2020 Sale of Shares 28.02.2020 Purchase of Shares 06.03.2020 Sale of Shares 06.03.2020 Purchase of Shares 13.03.2020 Sale of Shares 13.03.2020 Purchase of Shares 20.03.2020 Sale of Shares 27.03.2020 Sale of Shares 31.03.2020 Purchase of Shares 31.03.2020 At the end of the year No. of shares 39,74,831 -5,22,000 12,01,350 3,150 -5,00,000 3,150 -7,29,051 1,09,386 2,369 46,728 38,682 18,000 4,023 46,817 -5,528 6,57,000 -5,504 8,10,000 -1,16,049 -21,475 5,06,000 -18,000 2,273 275 -975 6,471 2,16,422 12,720 1,563 21,624 -23,90,579 15,19,536 -20,15,126 22,457 2,968 -12,80,504 -10,02,066 4,77,000 -548 16,81,147 -17,10,000 72,560 -2,59,158 -2,961 22,419 - % of total shares of the company 0.15 -0.02 0.04 0.00 -0.02 0.00 -0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.02 0.00 0.03 0.00 0.00 0.02 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00 -0.09 0.06 -0.07 0.00 0.00 -0.05 -0.04 0.02 0.00 0.06 -0.06 0.00 -0.01 0.00 0.00 - No. of shares 5,35,32,899 5,30,10,899 5,42,12,249 5,42,15,399 5,37,15,399 5,37,18,549 5,29,89,498 5,30,98,884 5,31,01,253 5,31,47,981 5,31,86,663 5,32,04,663 5,32,08,686 5,32,55,503 5,32,49,975 5,39,06,975 5,39,01,471 5,47,11,471 5,45,95,422 5,45,73,947 5,50,79,947 5,50,61,947 5,50,64,220 5,50,64,495 5,50,63,520 5,50,69,991 5,52,86,413 5,52,99,133 5,53,00,696 5,53,22,320 5,29,31,741 5,44,51,277 5,24,36,151 5,24,58,608 5,24,61,576 5,11,81,072 5,01,79,006 5,06,56,006 5,06,55,458 5,23,36,605 5,06,26,605 5,06,99,165 5,04,40,007 5,04,37,046 5,04,59,465 5,04,59,465 % of total shares of the company 1.98 1.96 2.00 2.00 1.99 1.99 1.96 1.96 1.96 1.96 1.97 1.97 1.97 1.97 1.97 1.99 1.99 2.02 2.02 2.02 2.04 2.04 2.04 2.04 2.04 2.04 2.04 2.04 2.04 2.05 1.96 2.01 1.94 1.94 1.94 1.89 1.86 1.87 1.87 1.93 1.87 1.87 1.86 1.86 1.87 1.87 168 The Tata Power Company Limited Integrated Annual Report 2019-20 Sl. No Name of the Shareholder Shareholding at the beginning of the year (as on 01.04.2019) Date Reason Increase/ Decrease in Shareholding Cumulative Shareholding during the year No. of shares 6 General 5,19,62,960 % of total shares of the company 1.92 9,00,17,492 3.33 7 Insurance Corporation of India First State Investments Icvc - Stewart Investors Global Emerging Markets Leaders Fund 1,33,69,849 0.49 8 Franklin India Equity Advantage Fund No. of shares % of total shares of the company No. of shares 05.04.2019 Sale of Shares 27.09.2019 Sale of Shares 31.03.2020 At the end of the year 27.09.2019 Sale of Shares 30.09.2019 Sale of Shares 15.11.2019 Sale of Shares 29.11.2019 Sale of Shares 06.12.2019 Sale of Shares 20.12.2019 Sale of Shares 24.01.2020 Sale of Shares 14.02.2020 Sale of Shares 21.02.2020 Sale of Shares 13.03.2020 Sale of Shares 20.03.2020 Sale of Shares 27.03.2020 Sale of Shares 31.03.2020 Sale of Shares 31.03.2020 At the end of the year 11.06.2019 Purchase of Shares 18.06.2019 Purchase of Shares 12.07.2019 Purchase of Shares 26.07.2019 Purchase of Shares 02.08.2019 Purchase of Shares 09.08.2019 Purchase of Shares 16.08.2019 Purchase of Shares 23.08.2019 Purchase of Shares 30.08.2019 Purchase of Shares 27.09.2019 Purchase of Shares 04.10.2019 Purchase of Shares 11.10.2019 Purchase of Shares 18.10.2019 Purchase of Shares 25.10.2019 Purchase of Shares 13.12.2019 Sale of Shares 13.12.2019 Purchase of Shares 20.12.2019 Sale of Shares 20.12.2019 Purchase of Shares 31.01.2020 Purchase of Shares 07.02.2020 Purchase of Shares 28.02.2020 Purchase of Shares 20.03.2020 Purchase of Shares 27.03.2020 Purchase of Shares 31.03.2020 At the end of the year -1,00,000 -50,00,000 - -36,88,702 -4,73,090 -32,77,864 -62,28,069 -4,83,796 -27,02,412 -54,70,986 -21,22,663 -1,99,112 -8,51,547 -1,23,45,246 -34,49,563 -28,95,760 - 11,79,645 11,83,921 5,00,000 5,00,000 15,00,000 7,50,000 10,00,000 20,00,034 14,99,966 25,00,000 6,84,300 9,23,468 20,76,532 5,00,000 -2,50,51,911 2,53,01,911 -51,15,804 51,15,804 10,00,000 4,00,000 30,00,000 11,29,397 3,70,603 - 5,19,62,960 5,18,62,960 4,68,62,960 4,68,62,960 9,00,17,492 8,63,28,790 8,58,55,700 8,25,77,836 7,63,49,767 7,58,65,971 7,31,63,559 6,76,92,573 6,55,69,910 6,53,70,798 6,45,19,251 5,21,74,005 4,87,24,442 4,58,28,682 4,58,28,682 1,33,69,849 1,45,49,494 1,57,33,415 1,62,33,415 1,67,33,415 1,82,33,415 1,89,83,415 1,99,83,415 2,19,83,449 2,34,83,415 2,59,83,415 2,66,67,715 2,75,91,183 2,96,67,715 3,01,67,715 51,15,804 3,04,17,715 2,53,01,911 3,04,17,715 3,14,17,715 3,18,17,715 3,48,17,715 3,59,47,112 3,63,17,715 3,63,17,715 0.00 -0.18 - -0.14 -0.02 -0.12 -0.23 -0.02 -0.10 -0.20 -0.08 -0.01 -0.03 -0.46 -0.13 -0.11 - 0.04 0.04 0.02 0.02 0.06 0.03 0.04 0.07 0.06 0.09 0.03 0.03 0.08 0.02 -0.93 0.94 -0.19 0.19 0.04 0.01 0.11 0.04 0.01 - % of total shares of the company 1.92 1.92 1.73 1.73 3.33 3.19 3.17 3.05 2.82 2.80 2.70 2.50 2.42 2.42 2.39 1.93 1.80 1.69 1.69 0.49 0.54 0.58 0.60 0.62 0.67 0.70 0.74 0.81 0.87 0.96 0.99 1.02 1.10 1.12 0.19 1.12 0.94 1.12 1.16 1.18 1.29 1.33 1.34 1.34 169 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report Sl. No Name of the Shareholder Shareholding at the beginning of the year (as on 01.04.2019) Date Reason Increase/ Decrease in Shareholding Cumulative Shareholding during the year No. of shares 6,06,551 % of total shares of the company 0.02 9 HDFC Life Insurance Company Limited No. of shares % of total shares of the company No. of shares 2,908 40,00,000 40,00,000 9,99,019 15,00,000 -28,000 5,00,000 5,01,390 -5,840 5,00,000 -32,434 10,00,000 20,13,395 7,44,363 26,34,816 15,79,064 -1,29,508 9,94,897 -20,807 -2,108 8,84,274 1,11,126 2,71,146 1,45,472 2,01,350 -7,437 8,65,655 -2,101 -11,414 17,51,640 6,20,311 -85,574 6,20,526 -12,570 2,91,663 -52,959 -95,137 -4,580 -856 7,41,609 716 2,77,430 800 8,37,468 19,41,076 6,06,551 6,09,459 46,09,459 86,09,459 96,08,478 1,11,08,478 1,10,80,478 1,15,80,478 1,20,81,868 1,20,76,028 1,25,76,028 1,25,43,594 1,35,43,594 1,55,56,989 1,63,01,352 1,89,36,168 2,05,15,232 2,03,85,724 2,13,80,621 2,13,59,814 2,13,57,706 2,22,41,980 2,23,53,106 2,26,24,252 2,27,69,724 2,29,71,074 2,29,63,637 2,38,29,292 2,38,27,191 2,38,15,777 2,55,67,417 2,61,87,728 2,61,02,154 2,67,22,680 2,67,10,110 2,70,01,773 2,69,48,814 2,68,53,677 2,68,49,097 2,68,48,241 2,75,89,850 2,75,90,566 2,78,67,996 2,78,68,796 2,87,06,264 3,06,47,340 0.00 0.15 0.15 0.04 0.06 0.00 0.02 0.02 0.00 0.02 0.00 0.04 0.07 0.03 0.10 0.06 0.00 0.04 0.00 0.00 0.03 0.00 0.01 0.01 0.01 0.00 0.03 0.00 0.00 0.06 0.02 0.00 0.02 0.00 0.01 0.00 0.00 0.00 0.00 0.03 0.00 0.01 0.00 0.03 0.07 % of total shares of the company 0.02 0.02 0.17 0.32 0.36 0.41 0.41 0.43 0.45 0.45 0.46 0.46 0.50 0.58 0.60 0.70 0.76 0.75 0.79 0.79 0.79 0.82 0.83 0.84 0.84 0.85 0.85 0.88 0.88 0.88 0.95 0.97 0.97 0.99 0.99 1.00 1.00 0.99 0.99 0.99 1.02 1.02 1.03 1.03 1.06 1.13 12.04.2019 Purchase of Shares 19.04.2019 Purchase of Shares 26.04.2019 Purchase of Shares 10.05.2019 Purchase of Shares 17.05.2019 Purchase of Shares 06.06.2019 Sale of Shares 07.06.2019 Purchase of Shares 11.06.2019 Purchase of Shares 05.07.2019 Sale of Shares 12.07.2019 Purchase of Shares 19.07.2019 Sale of Shares 26.07.2019 Purchase of Shares 02.08.2019 Purchase of Shares 09.08.2019 Purchase of Shares 16.08.2019 Purchase of Shares 23.08.2019 Purchase of Shares 30.08.2019 Sale of Shares 06.09.2019 Purchase of Shares 20.09.2019 Sale of Shares 27.09.2019 Sale of Shares 04.10.2019 Purchase of Shares 11.10.2019 Purchase of Shares 18.10.2019 Purchase of Shares 25.10.2019 Purchase of Shares 01.11.2019 Purchase of Shares 08.11.2019 Sale of Shares 15.11.2019 Purchase of Shares 22.11.2019 Sale of Shares 29.11.2019 Sale of Shares 06.12.2019 Purchase of Shares 13.12.2019 Purchase of Shares 20.12.2019 Sale of Shares 27.12.2019 Purchase of Shares 31.12.2019 Sale of Shares 03.01.2020 Purchase of Shares 10.01.2020 Sale of Shares 17.01.2020 Sale of Shares 24.01.2020 Sale of Shares 31.01.2020 Sale of Shares 07.02.2020 Purchase of Shares 14.02.2020 Purchase of Shares 21.02.2020 Purchase of Shares 28.02.2020 Purchase of Shares 06.03.2020 Purchase of Shares 13.03.2020 Purchase of Shares 170 The Tata Power Company Limited Integrated Annual Report 2019-20 Sl. No Name of the Shareholder Shareholding at the beginning of the year (as on 01.04.2019) Date Reason Increase/ Decrease in Shareholding Cumulative Shareholding during the year No. of shares % of total shares of the company 10 Postal Life 48,41,587 0.18 Insurance Fund A/C Sbifmpl 11 Stewart 5,01,16,888 1.85 Investors Global Emerging Markets Leaders Fund 12 SBI Large & Midcap Fund 4,70,23,060 1.74 20.03.2020 Purchase of Shares 27.03.2020 Purchase of Shares 31.03.2020 Purchase of Shares 31.03.2020 At the end of the year 05.07.2019 Purchase of Shares 19.07.2019 Purchase of Shares 23.08.2019 Purchase of Shares 06.03.2020 Purchase of Shares 20.03.2020 Purchase of Shares 27.03.2020 Purchase of Shares 31.03.2020 At the end of the year 27.09.2019 Sale of Shares 30.09.2019 Sale of Shares 18.10.2019 Sale of Shares 25.10.2019 Sale of Shares 01.11.2019 Sale of Shares 08.11.2019 Sale of Shares 15.11.2019 Sale of Shares 22.11.2019 Sale of Shares 29.11.2019 Sale of Shares 06.12.2019 Sale of Shares 13.12.2019 Sale of Shares 20.12.2019 Sale of Shares 14.02.2020 Sale of Shares 21.02.2020 Sale of Shares 27.03.2020 Sale of Shares 31.03.2020 Sale of Shares 31.03.2020 At the end of the year 05.04.2019 Purchase of Shares 19.04.2019 Sale of Shares 19.04.2019 Purchase of Shares 26.04.2019 Sale of Shares 10.05.2019 Purchase of Shares 17.05.2019 Purchase of Shares 31.05.2019 Sale of Shares 06.06.2019 Sale of Shares 11.06.2019 Sale of Shares 21.06.2019 Purchase of Shares 28.06.2019 Sale of Shares 19.07.2019 Sale of Shares 26.07.2019 Sale of Shares 26.07.2019 Purchase of Shares 02.08.2019 Sale of Shares No. of shares 14,40,233 5,95,738 3,200 - 11,17,302 15,69,857 10,06,442 43,97,770 34,05,685 23,94,557 - -21,56,032 -2,76,519 -78,78,376 -64,29,628 -11,52,995 -15,00,630 -51,51,802 -27,96,420 -23,90,493 -16,16,843 -34,78,201 -7,32,732 -11,24,909 -4,43,015 -7,37,811 -7,59,736 - 29,97,000 -29,97,028 1,60,000 -33 12,51,937 30,49,147 -47 -1,066 -1,60,000 1,887 -191 -3,65,000 -1,17,45,523 22,77,004 -6,00,000 % of total shares of the company 0.05 0.02 0.00 - 0.04 0.06 0.04 0.16 0.13 0.09 - -0.08 -0.01 -0.29 -0.24 -0.04 -0.06 -0.19 -0.10 -0.09 -0.06 -0.13 -0.03 -0.04 -0.02 -0.03 -0.03 - 0.11 -0.11 0.01 0.00 0.05 0.11 0.00 0.00 -0.01 0.00 0.00 -0.01 -0.43 0.08 -0.02 No. of shares 3,20,87,573 3,26,83,311 3,26,86,511 3,26,86,511 48,41,587 59,58,889 75,28,746 85,35,188 1,29,32,958 1,63,38,643 1,87,33,200 1,87,33,200 5,01,16,888 4,79,60,856 4,76,84,337 3,98,05,961 3,33,76,333 3,22,23,338 3,07,22,708 2,55,70,906 2,27,74,486 2,03,83,993 1,87,67,150 1,52,88,949 1,45,56,217 1,34,31,308 1,29,88,293 1,22,50,482 1,14,90,746 1,14,90,746 4,70,23,060 5,00,20,060 4,70,23,032 4,71,83,032 4,71,82,999 4,84,34,936 5,14,84,083 5,14,84,036 5,14,82,970 5,13,22,970 5,13,24,857 5,13,24,666 5,09,59,666 3,92,14,143 4,14,91,147 4,08,91,147 % of total shares of the company 1.19 1.21 1.21 1.21 0.18 0.22 0.28 0.32 0.48 0.60 0.69 0.69 1.85 1.77 1.76 1.47 1.23 1.19 1.14 0.95 0.84 0.75 0.69 0.57 0.54 0.50 0.48 0.45 0.42 0.42 1.74 1.85 1.74 1.74 1.74 1.79 1.90 1.90 1.90 1.90 1.90 1.90 1.88 1.45 1.53 1.51 171 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report Sl. No Name of the Shareholder Shareholding at the beginning of the year (as on 01.04.2019) Date Reason Increase/ Decrease in Shareholding Cumulative Shareholding during the year No. of shares % of total shares of the company 13 Mahout 2,71,66,790 1.00 Global Emerging Markets Leaders Fund, A Sub-Fund of The Mahout Delaware Statutory Trust 172 02.08.2019 Purchase of Shares 09.08.2019 Purchase of Shares 16.08.2019 Purchase of Shares 23.08.2019 Purchase of Shares 30.08.2019 Sale of Shares 30.08.2019 Purchase of Shares 06.09.2019 Sale of Shares 06.09.2019 Purchase of Shares 13.09.2019 Sale of Shares 20.09.2019 Sale of Shares 27.09.2019 Sale of Shares 30.09.2019 Purchase of Shares 04.10.2019 Purchase of Shares 11.10.2019 Sale of Shares 25.10.2019 Purchase of Shares 01.11.2019 Purchase of Shares 22.11.2019 Purchase of Shares 29.11.2019 Sale of Shares 29.11.2019 Purchase of Shares 20.12.2019 Purchase of Shares 27.12.2019 Sale of Shares 31.12.2019 Sale of Shares 10.01.2020 Purchase of Shares 17.01.2020 Sale of Shares 07.02.2020 Sale of Shares 14.02.2020 Purchase of Shares 21.02.2020 Purchase of Shares 28.02.2020 Purchase of Shares 06.03.2020 Sale of Shares 06.03.2020 Purchase of Shares 20.03.2020 Sale of Shares 31.03.2020 Purchase of Shares 31.03.2020 At the end of the year 27.09.2019 Sale of Shares 30.09.2019 Sale of Shares 08.11.2019 Sale of Shares 15.11.2019 Sale of Shares 06.12.2019 Sale of Shares 20.12.2019 Sale of Shares 03.01.2020 Sale of Shares 24.01.2020 Sale of Shares 28.02.2020 Sale of Shares 06.03.2020 Sale of Shares 13.03.2020 Sale of Shares 20.03.2020 Sale of Shares 31.03.2020 At the end of the year No. of shares 10 9 6 2,61,011 -6,30,000 18,007 -4 20 -89,94,000 -2,05,15,460 -60,00,168 2,79,000 5 -4 10 2 6 -4,05,000 5 63,000 -107 -19 13,01,000 -15 -2 1,011 5 1,025 -40,00,042 1 -5,22,853 14 - -10,95,337 -1,40,481 -20,32,972 -53,72,257 -35,41,966 -5,02,914 -29,91,572 -16,31,955 -7,54,467 -67,79,433 -8,69,303 -14,54,133 - % of total shares of the company 0.00 0.00 0.00 0.01 -0.02 0.00 0.00 0.00 -0.33 -0.76 -0.22 0.01 0.00 0.00 0.00 0.00 0.00 -0.01 0.00 0.00 0.00 0.00 0.05 0.00 0.00 0.00 0.00 0.00 -0.15 0.00 -0.02 0.00 - -0.04 -0.01 -0.08 -0.20 -0.13 -0.02 -0.11 -0.06 -0.03 -0.25 -0.03 -0.05 - No. of shares 4,08,91,157 4,08,91,166 4,08,91,172 4,11,52,183 4,05,22,183 4,05,40,190 4,05,40,186 4,05,40,206 3,15,46,206 1,10,30,746 50,30,578 53,09,578 53,09,583 53,09,579 53,09,589 53,09,591 53,09,597 49,04,597 49,04,602 49,67,602 49,67,495 49,67,476 62,68,476 62,68,461 62,68,459 62,69,470 62,69,475 62,70,500 22,70,458 22,70,459 17,47,606 17,47,620 17,47,620 2,71,66,790 2,60,71,453 2,59,30,972 2,38,98,000 1,85,25,743 1,49,83,777 1,44,80,863 1,14,89,291 98,57,336 91,02,869 23,23,436 14,54,133 0 0 % of total shares of the company 1.51 1.51 1.51 1.52 1.50 1.50 1.50 1.50 1.17 0.41 0.19 0.20 0.20 0.20 0.20 0.20 0.20 0.18 0.18 0.18 0.18 0.18 0.23 0.23 0.23 0.23 0.23 0.23 0.08 0.08 0.06 0.06 0.06 1.00 0.96 0.96 0.88 0.68 0.55 0.54 0.42 0.36 0.34 0.09 0.05 0.00 0.00 The Tata Power Company Limited Integrated Annual Report 2019-20 v) Shareholding of Directors and Key Managerial Personnel: Sl. No. Name of the Director/ Key Managerial Personnel Shareholding at the beginning of the year (as on 01.04.2019) Date Reason Increase/ Decrease in Shareholding Cumulative Shareholding during the year No. of shares 0 0 0 % of total shares of the company 0.00 0.00 0.00 16,262 0.00 0 0 0 0 0 0 0 0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1 2 3 4 5 6 7 8 9 Mr. N. Chandrasekaran Ms. Anjali Bansal Ms. Vibha Padalkar Mr. Sanjay V. Bhandarkar # Mr. K. M. Chandrasekhar Mr. Hemant Bhargava Mr. Saurabh Agrawal Mr. Banmali Agrawala Mr. Ashok Sinha (w.e.f 02.05.2019) 10 Mr. Praveer Sinha, CEO & Managing Director 11 Mr. Nawshir H. Mirza (upto 12.08.2019) 12 Mr. Deepak M. Satwalekar (upto 12.08.2019) 13 Mr. Ashok S. Sethi 20,600 0.00 (upto 30.04.2019) 14 Mr. Ramesh 0 0.00 Subramanyam, Chief Financial Officer 15 Mr. Hanoz M. Mistry, Company Secretary 27,005 0.00 No. of shares % of total shares of the company No. of shares 16.03.2020 Purchase of Shares 31.03.2020 At the end of the year 2,00,000 - - No change 31.03.2020 At the end of the year - No change 31.03.2020 At the end of the year - No change 31.03.2020 At the end of the year - No change 31.03.2020 At the end of the year - No change 31.03.2020 At the end of the year - No change 31.03.2020 At the end of the year No change 31.03.2020 At the end of the year - No change 31.03.2020 At the end of the year - No change 31.03.2020 At the end of the year - - No change 12.08.2019 At the end of the period - No change 12.08.2019 At the end of the period - No change 30.04.2019 At the end of the period - No change 31.03.2020 At the end of the year 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 22.11.2019 Sale of Shares 22.11.2019 Purchase of Shares 29.11.2019 Sale of Shares 13.12.2019 Sale of Shares 31.03.2020 At the end of the year @ -8,560 @ 8,560 @ -2,853 @ -2,854 - 0.00 - 0.00 - 0.00 - 0 0.01 2,00,000 - 2,00,000 0 0 0 0 0 0 16,262 16,262 16,262 0 0 0 0 0 0 0 0 0 0 0 0 0.00 - 0.00 - 0.00 - 0.00 - 0.00 - 0.00 - 0.00 - 0.00 - 0.00 - 0.00 - 0.00 0.00 0.00 0.00 - 0 0 0 0 0 0 0 0 0 20,600 20,600 0 0 0 * 27,005 18,445 27,005 24,152 21,298 21,298 # All the 16,262 shares are held as second holder. * Out of 27,005 shares, 15,286 shares are held as second holder. @ 8,560 shares as second holder have been distributed in family as per devolution of assets. % of total shares of the company 0.00 0.01 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 173 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report V. Indebtedness Indebtedness of the Company including interest outstanding/accrued but not due for payment Particulars Indebtedness at the beginning of the financial year i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due Total (i+ii+iii) Change in Indebtedness during the financial year • Addition • Reduction Net Change Indebtedness at the end of the financial year i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due Total (i + ii + iii) Figures in ₹ crore Unsecured Loans Deposits Total Indebtedness Secured Loans excluding deposits 6,041.78 11,410.74 - 41.96 - 147.13 6,083.74 11,557.87 1,470.00 33,250.65 (1,753.34) (32,605.03) (283.34) 645.62 5,757.43 12,044.23 - 42.97 - 159.26 5,800.40 12,203.49 - - - - - - - - - - - 17,452.52 - 189.09 17,641.61 34,720.65 (34,358.37) 362.28 17,801.66 - 202.23 18,003.89 (₹) VI. Remuneration Of Directors And Key Managerial Personnel A. Remuneration to Managing Director, Whole-time Director and/or Manager: Sl. No. Particulars of Remuneration Name of MD/WTD/Manager Total Amount Mr. Praveer Sinha, CEO & Managing Director Mr. Ashok S. Sethi, COO & Executive Director (upto 30.04.2019)* 2,11,71,818 16,82,600 2,28,54,418 20,34,499 1,31,073 21,65,572 Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 Value of perquisites u/s 17(2) of the Income-tax Act, 1961 Profits in lieu of salary under section 17(3) of the Income-tax Act, 1961 (b) (c) Nil Nil Nil Nil Stock Option Sweat Equity Commission& - - Others, Retirement Benefits Total Ceiling as per Act (@ 10% of profit calculated under Section 198 of the Companies Act, 2013) as % of profit others, specify... (performance based) - 2,75,00,000 26,24,400 5,33,30,717 Nil Nil - Nil 3,36,00,667 3,54,14,340 Nil Nil Nil - 2,75,00,000 3,62,25,067 8,87,45,057 ₹ 40.21 crore 1. 2. 3. 4. 5. * As Mr. Ashok S. Sethi superannuated on 30th April 2019, no commission is payable to him for FY20. & Commission relates to the financial year ended 31st March 2020, which will be paid during FY21. 174 The Tata Power Company Limited Integrated Annual Report 2019-20 B. Remuneration to other directors: Sl. No. Name of Directors Particulars of Remuneration Commission payable for FY20& Others, please specify Fee for attending board / committee meetings* (₹) Total Amount I. 1. 2. 3. 4. 5. 6. 7. II. 1. 2. 3. 4. 3,90,000 4,80,000 4,50,000 3,00,000 2,70,000 1,50,000 1,20,000 21,60,000 Independent Directors Ms. Anjali Bansal Ms. Vibha Padalkar Mr. Sanjay V. Bhandarkar Mr. K. M. Chandrasekhar Mr. Ashok Sinha (w.e.f. 02.05.2019) Mr. Nawshir H. Mirza (upto 12.08.2019) Mr. Deepak M. Satwalekar (upto 12.08.2019) Total (I) Other Non-Executive Directors Nil Mr. N. Chandrasekaran $ 40,00,000 Mr. Hemant Bhargava @ Nil Mr. Saurabh Agrawal # Nil Mr. Banmali Agrawala # 40,00,000 Total (II) Total Managerial Remuneration (I + II) 3,38,00,000 Ceiling as per Act (@ 1% of profit calculated under Section 198 of the Companies Act, 2013) 51,00,000 58,00,000 55,00,000 51,00,000 40,00,000 24,00,000 19,00,000 2,98,00,000 2,40,000 1,80,000 2,40,000 2,40,000 9,00,000 30,60,000 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil 54,90,000 62,80,000 59,50,000 54,00,000 42,70,000 25,50,000 20,20,000 3,19,60,000 2,40,000 41,80,000 2,40,000 2,40,000 49,00,000 3,68,60,000 ₹ 4.02 crore Excludes GST * & Commission relates to the financial year ended 31st March 2020, which will be paid to the eligible Directors during FY21. $ @ # As a policy, Mr. N. Chandrasekaran, Chairman, has abstained from receiving Commission from the Company. The Sitting Fees for attending meetings are paid to Mr. Bhargava and the Commission will be paid to LIC. In line with the internal guidelines of the Company, no payment is made towards Commission to the Non-Executive Directors of the Company, who are in full time employment with another Tata Company. C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD (₹) Sl. No. Particulars of Remuneration Key Managerial Personnel Total 1. 2. 3. 4. 5. Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 Value of perquisites u/s 17(2) of the Income-tax Act, 1961 Profits in lieu of salary under section 17(3) of the Income-tax Act, 1961 (b) (c) Stock Option Sweat Equity Commission - - as % of profit others Others, Retirement Benefits Total * Includes Performance Pay for FY19 paid in FY20. Mr. R. N. Subramanyam, Chief Financial Officer Mr. H. M. Mistry, Company Secretary 3,38,20,340 * 1,13,08,939 * 4,51,29,279 * 37,82,857 9,28,414 47,11,271 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil 8,79,365 10,17,107 18,96,472 3,84,82,562 1,32,54,460 5,17,37,022 175 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report VII. Penalties / Punishment/ Compounding Of Offences: Type Section of the Companies Act Brief Description Details of Penalty/ Punishment/ Compounding fees imposed Authority [RD/NCLT/ COURT] Appeal made, if any (give details) None None None On behalf of the Board of Directors, N. Chandrasekaran Chairman (DIN: 00121863) A. COMPANY Penalty Punishment Compounding B. DIRECTORS Penalty Punishment Compounding C. OTHER OFFICERS IN DEFAULT Penalty Punishment Compounding Mumbai, 19th May 2020 176 The Tata Power Company Limited Integrated Annual Report 2019-20 Annexure - IX : DISCLOSURE OF MANAGERIAL REMUNERATION Ref.: Board's Report, Section 27) a) The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year: b) The percentage in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year: increase Name of Director Mr. N. Chandrasekaran $ Ms. Anjali Bansal Ms. Vibha Padalkar Mr. Sanjay V. Bhandarkar Mr. K. M. Chandrasekhar Mr. Hemant Bhargava Mr. Saurabh Agrawal # Mr. Banmali Agrawala # Mr. Ashok Sinha ^ Mr. Praveer Sinha, CEO and Managing Director Mr. Nawshir H. Mirza * Mr. Deepak M. Satwalekar * Mr. Ashok S. Sethi, COO & Executive Director @ Ratio of Director’s remuneration to the median remuneration of the employees of the Company for the financial year - 3.48 3.98 3.77 3.42 2.65 - - N.A.& 33.76 N.A.& N.A.& N.A.& Name of Director and Key Managerial Personnel Percentage increase in remuneration in the financial year Mr. N. Chandrasekaran $ Ms. Anjali Bansal Ms. Vibha Padalkar Mr. Sanjay V. Bhandarkar Mr. K. M. Chandrasekhar Mr. Hemant Bhargava Mr. Saurabh Agrawal # Mr. Banmali Agrawala # Mr. Ashok Sinha ^ Mr. Praveer Sinha, CEO and Managing Director (KMP) Mr. Nawshir H. Mirza * Mr. Deepak M. Satwalekar * Mr. Ashok S. Sethi, COO & Executive Director (KMP) @ Mr. Ramesh N. Subramanyam, Chief Financial Officer (KMP) Mr. Hanoz M. Mistry, Company Secretary (KMP) - 1.29 15.23 -1.49 23.85 100.00 - - N.A.! 19.96 N.A.! N.A.! N.A.! 12.31 11.72 $ # ^ * As a policy, Mr. N. Chandrasekaran, Chairman, has abstained from receiving Commission from the Company and hence not stated. In line with the internal guidelines of the Company, no payment is made towards Commission to the Non-Executive Directors of the Company, who are in full time employment with another Tata Company and hence not stated. Mr. Ashok Sinha was appointed as an Independent Director with effect from 2nd May 2019. Mr. Mirza and Mr. Satwalekar ceased to be directors with effect from close of business hours on 12th August 2019, consequent upon completion of their term as Independent Directors. @ Mr. Sethi superannuated as COO & Executive Director of the Company with effect from close of business hours on 30th April 2019. & Since the remuneration is only for part of the year, ratio of their remuneration to median remuneration is not comparable and hence, not stated. ! Since the remuneration is only for part of the year, percentage increase is not comparable and hence, not stated. 177 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Board's Report c) The percentage increase in the median remuneration of employees in the financial year: 45.19%. f) d) The number of permanent employees on the rolls of the company: 3,156. e) Average percentile increase already made in the salaries of Affirmation remuneration policy of the Company: remuneration that the is as per the is affirmed that the remuneration is as per the It 'Remuneration Policy for Directors, Key Managerial Personnel and other employees' adopted by the Company. employees other than the managerial personnel in the last On behalf of the Board of Directors, financial year, its comparison with the percentile increase in the managerial remuneration, justification thereof and point out if there are any exceptional circumstances for Mumbai, 19th May 2020 N. Chandrasekaran Chairman (DIN: 00121863) increase in the managerial remuneration: • Average percentile increase in the salaries of employees other than managerial personnel was 4%. • Average increase in remuneration of Managers (defined as MD and ED on the Board of your Company) was 19.96%. As Mr. Ashok S. Sethi superannuated as COO & Executive Director of the Company with effect from close of business hours on 30th April 2019, his remuneration is not comparable for the in remuneration. purpose of calculating aforesaid increase 178 The Tata Power Company Limited Integrated Annual Report 2019-20 Management Discussion & Analysis 1. Industry Developments Global Power Sector The global power sector is witnessing a rapid change with the influx of renewable energy in the power portfolio mix as all nations rise to the challenge of climate change. In addition, Electric vehicles, Digitalisation, Grid scale energy storage, Cyber Security, Big Data Analytics, Energy Access to all and Demand Side Management are going to create a visible impact on the sector and the way it operates in the coming years. With energy sources moving to the edge of the grid, the role of players in the sector is also undergoing a change, necessitating a move from conventional methods to service delivery to becoming energy solution providers for the end consumers. changing energy landscape, global Amidst a power utilities are capitalising on the growth opportunities presented by clean energy. Power market developments are likely to undergo further transformation with changes in policy actions and technological advancements. Focus on environmental sustainability on the back of climate change, customer demand for clean energy sources and commitment to help customers optimise energy consumption and enable savings, are driving power utility companies in the U.S. and Europe to increasingly adopt green energy solutions and raise the bar on climate change. A U.S. utility was the first to commit to a ‘100% carbon- free’ initiative by 2050, and 80% by 2030. Several Europeans nations have formulated renewable energy targets which include increasing share of renewables portfolio in the power generation mix by 2030, while also planning to phase out coal by that time. Similar announcements have gathered pace worldwide. Renewables have become the preferred mode for energy generation and sourcing. The gradual reduction in costs supported by favourable Government policies are bringing about a positive change in the electricity generation mix. As per the International Energy Agency (IEA), the share of renewables is expected to be 44% by 2040, from the current level of 26%. The resulting impact of this would be the decline in coal-based power generation from 38% to 25% during the same period. Natural gas enabled generation is set to increase by 50% by 2040, driven by low-cost availability of shale gas. However, as rural and semi-urban electrification continues in most developing economies, affordability and ease-of-access are at the core of consumer demand, and these continue to be met by coal-based generation, especially in the developing markets of Africa and Asia. Global coal prices are stabilising as a result of increasing demand of certain developing economies, off-set by declining requirements of advanced economies. The global coal prices fell from a high of USD 120/MT (Newcastle FOB) in July 2018 to USD 66/MT in March 2020. With the changing scenario in the global energy market in terms of oil prices and renewable power generation costs, the oil-exporting Middle-East countries have devised economic diversification plans. As a means of diversifying its power mix, the MENA (Middle East and North Africa) region is increasingly shifting its focus towards renewables and setting long-term targets for clean energy development. While Morocco’s target is to generate 52% energy through renewable energy sources by 2030, the same for Dubai stands at attaining 75% level by 2050. Saudi Arabia is host to the largest programme of planned projects. The country set an ambitious target of developing 60 GW (60,000 MW) of Renewable Energy (RE) capacity by 2030, scaling up manifold from the current capacity of 100 MW. The region has witnessed large in renewables, driving some of the economically viable solar PV and onshore wind projects globally. investments With coal-based generation unlikely to wane away, a balanced approach aligned to the environmental responsibility is being explored. Technologies including blended power, carbon capture utilisation and storage (CCUS), or biomass co-firing equipment, are being explored depending upon the markets and economic viability and implications, given the high cost associated with such an approach. Electricity access in Africa is the biggest concern, with half of the population in sub-Saharan Africa having no access to power. The region is making progress and with that the rising demand needs have to be met with corresponding increase in supply, requiring significant expansion of the power system. Electricity output in the region is expected to increase from 225 TWh to 900 TWh by 2040, mainly supplied by on-grid power, though decentralised solutions are also being adopted, as declining costs of solar PV and battery storage technologies make these solutions more competitive and economically viable. Electricity access is also one of the core focus areas of ASEAN countries, and Southeast Asia is making steady progress towards achieving universal electricity access by 2030. The region’s electricity demand is growing at a rapid rate of 6% per annum and this demand is primarily lower generation met by thermal power, given costs and abundant supply of fuel source. Although dominance of coal in power generation mix is expected to continue, the declining costs of renewables, concerns over emissions and pollution accompanied by financing difficulties of coal projects, have started tilting the scales in favour of RE projects. Recent revisions to policy planning documents have been made to boost the long- term share of renewables, backed by private finance and policy incentives. its 179 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices Management Discussion & Analysis Given the focus on electricity access to all, microgrids is another area that is garnering attention. The demand for microgrids too is gaining momentum with the backing of the need for resiliency, energy security and electrification of rural and under-penetrated areas in a cost-effective manner without the requirement to extend the conventional grids. Another major global focus has been the adoption of Electric Vehicles (EV). EV deployment targets are witnessing upticks globally, thereby encouraging industry participants to invest in the EV supply chain. Large power utilities in Europe have been investing in EV charging infrastructure. Oil majors are also participating through acquisitions. With power generation through decentralised renewable energy sources gaining prominence, the same has also created requirement for deployment of storage solutions to accommodate the heightened demand. Many countries including the U.S., China, Germany and India are investing in energy storage projects to support power sector transformation and the cost of energy storage has been witnessing a downward trend with increasing advancements in technology. The power industry is transforming into a technology business as the utilities adapt to the evolving diverse needs of the customers and invest resources in development and adoption of new technologies. With more and more systems getting intelligent and connected, Cyber Security has emerged as an area of interest and concern in the power sector and most of the utilities are investing heavily in making their system robust and secure. Data Analytics is another area that is gaining prominence in the current scenario, with the increasing requirements of customised service delivery and in operational infusion of excellence. Further, with the decentralised generation, EVs, the demand supply scenario has become dynamic and requires accurate load and supply forecasting (including weather forecasting) to ensure stability and robustness of the grid. improvement increasing All the aforementioned factors, coupled with the need for affordable, sustainable and modern energy systems, is shaping the global power sector and opening business service opportunities for power utilities. This wave of change is not just limited to the power companies, but is also opening-up business opportunities for other industry groups like automobile and oil majors, which have been actively participating in this transition through business diversification, acquisition and collaboration with power utilities. 180 Indian Power Sector India’s demand for power is expected to grow at an average rate of 6% (as per the Ministry of Power’s Five Year Vision Document), led by industrial and residential consumers. This is, however, expected to take a hit in FY21, on account of the COVID-19 pandemic that has put the entire nation under lockdown, affecting power demand from high paying industrial and commercial segments. Power demand already witnessed a decline of more than 20% during the lockdown period. Moving ahead, the revival of economic activity coupled with the Government’s push towards 24x7 power for all, should provide the impetus to electricity demand growth in the country. While coal is expected to remain a significant fuel source in the country’s quest to provide power to every citizen, its growth would diminish in the coming years. The Government will focus on limited thermal capacity additions to be undertaken only by the Central and State utilities, primarily against retirals. It is focussing on RE growth in alignment to the sustainability and carbon emission reduction targets with an intent to increase the RE capacity 3-fold from the targeted level of 175 GW in 2022 to 500 GW by 2030. Measures to curb emissions by thermal power plants are also in place. These include installation of Flue Gas Desulphurisation (FGD) to reduce SO2 from exhaust flue-gas. The deadline for the same has been extended to December 2022. Actions are being taken to shut down coal-fired plants that fail to meet emission standards. is focus through the TBCB inflows by private players space has been on private in the transmission and The Government’s sector distribution in participation. Fund Transmission (tariff based competitive bidding) route. The distribution segment is also witnessing entry of private players through Public Private Partnerships (PPP) or franchisee models, in a bid to reduce high AT&C losses across India. The financial stress of Distribution companies (Discoms) is limiting their ability to make payments to the generation companies, thus adding on to the stress in the sector. The sector has Non-Performing Assets (NPAs) to the tune of ` 2 trillion, resulting in cautious lending to the sector by banks and financial institutions. However, a lot of efforts have been made to resolve this issue through various Government interventions. Out of the total 40 GW of stressed capacity, around 10 GW have been resolved – the recent acquisition of Prayagraj Power Generation Company Limited (PPGCL) by Resurgent Power Ventures Pte. Limited (Resurgent) being one such example. Emphasis now lies on the remaining assets. The Tata Power Company Limited Integrated Annual Report 2019-20 Generation India’s installed generation capacity stands at 370 GW as on 31st March 2020, which excludes 55 GW of captive generation capacity. Grid connected capacity addition during FY20 was 14 GW vis-à-vis 12 GW in FY19. Thermal Generation Coal-based capacities have accounted for more than half of India’s total installed capacity over the last 10 years (FY20 vs FY10), while that of renewables has risen from 9% to 23%. The PLF of thermal plants have witnessed a declining trend in the last decade, falling to 56.08% in FY20 from 77.5% in FY10. towards commitment Renewable Generation The Government’s carbon reduction accompanied by declining costs of renewables, have provided the impetus for rapid increase in renewable based capacities. The overall renewables addition during FY20 was 9 GW as against 8.6 GW during the previous year. Issues like safeguard duty, renegotiation of contracts, land availability, financing constraints and delayed payments by Discoms, have impacted RE projects. The tariffs have also risen from the lows of ` 2.44/unit to the range of ` 2.8-2.9/unit, with the rise in ceiling tariffs. INDIA GENERATION MIX (IN GW) CAGR (%) Installed capacity (GW) 9% 4% 4% 2% 19% 19% 9 9 1 4 8 7 8 6 4 7 3 5 2 7 1 75 6 1 7 1 Coal Gas Nuclear Hydro Renewables Others FY10 FY20 (Source: MoP, GoI, CEA) Fuel Coal produced by Coal its subsidiaries declined by 0.8% during FY20 to 602 MT from 607 MT in the previous fiscal. Extended monsoons posed challenges for supporting growth in domestic coal production, which might have necessitated coal imports India Limited (CIL) and by power utilities. Thermal coal imports grew by 3% y-o-y in FY20, supported by declining international coal prices in 2019. GLOBAL COAL PRICE AND INDIA’S COAL IMPORTS 140 120 100 80 60 40 20 0 ) n t / D S U ( e c i r P l a o C 8 1 - r p A 8 1 - y a M 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 ) T M ( s t r o p m I l a o C 0 2 - b e F 0 2 - r a M 9 1 - y a M 9 1 - n u J 9 1 - l u J 9 1 - g u A 9 1 - p e S 9 1 - t c O 9 1 - v o N 9 1 - c e D 0 2 - n a J 8 1 - p e S 8 1 - t c O 8 1 - v o N 8 1 - c e D 9 1 - n a J 9 1 - b e F 9 1 - r a M 9 1 - r p A 8 1 - n u J 8 1 - l u J 8 1 - g u A Global Coal Price Movement (USD/tn) Coal Import by Power Plant (MT) (Source: World Bank, CEA) Transmission The backbone transmission system in India is mainly through 765 kV, 400 kV and 220 kV AC networks, with the highest transmission voltage level being 800 kV (HVDC). Total transmission lines and substation capacity reached nearly 4.23 lakh Ckms and 9.62 MVA respectively, reflecting an increase of about 10,226 Ckms and 62,760 MVA over the previous year. With the changing power generation mix on account of increase in renewables, the Government is emphasising on augmenting the transmission infrastructure to support demand growth. In order to expedite the development of transmission lines for solar parks under Green Corridor- II (Under Green Corridor-I, Power Grid Corporation of India Limited (PGCIL) is responsible for strengthening inter-state transmission networks and constructing transmission network for connecting RE-rich states) and open-up private participation, which is still limited to 7%, the Government has decided to award these projects to private players through tariff based competitive bidding (TBCB). The National Electricity Plan (Volume II-Transmission) i.e. NEP- Trans, has been notified to review the development of the transmission system during the 12th Plan Period, the current planning period 2017-22 and the subsequent period 2022-27. Distribution The distribution segment has been plagued by a host of issues resulting in its deteriorating financial health. The sector has been at the forefront of major power sector reforms and policy developments in the country. The current outstanding debt of ` 4.3 lakh crore is largely due to delayed payments, issues around tariff rationalisation and subsidy disbursement constraints. UDAY scheme is yet to yield the desired results 181 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices Management Discussion & Analysis both in terms of financial and operational parameters and meet the objective and intent behind its launch. The AT&C loss level stands at about 20%, which is on the higher side compared to the FY19 target of 15% set by the scheme. ALL INDIA AT&C LOSS, % . 2 7 5 2 5 1 Y F . 6 9 3 2 6 1 Y F 6 5 3 2 . 7 1 Y F . 1 3 2 2 8 1 Y F . * 0 0 2 9 1 Y F *This is provisional (Source: PFC Report on Performance of State Power Utilities 2017-18, UDAY portal) indicating stress the ` 90,000 crore to generation The outstanding dues of Discoms in level companies crossed February 2020, in the sector. The Government is working towards addressing these issues and helping improve the financial situation of the power sector through various measures. It introduced the Letter of Credit (LoC) in August 2019 to ensure payment security. This has led to some improvements in receivables. As per the 7th Annual Integrated Rating, a methodology formulated by the Ministry of Power for evaluation of performance of the State Power Distribution utilities on a range of parameters covering operational, financial, regulatory and reform measures, 16 out of 41 Discoms were rated as A+ or A as against 7 Discoms in the previous rating. While a few state Discoms have started considering a distribution franchisee route in certain areas to help reduce the AT&C losses, many Discoms like Rajasthan, Uttar Pradesh, Madhya Pradesh and Odisha are evaluating options of privatisation through the PPP model. Central Electricity Supply Utility (CESU), Odisha has been privatised and the process of privatisation of the remaining Discoms of the state (WESCO, NESCO and SOUTHCO) are at advanced stages. The distribution sector is expected to pave the way for opportunities in the services segment like smart meters, smart grids, LED street lighting and advisory services projects. 182 The Government of India has made steadfast progress towards universal electricity access by covering 99.93% households through the Saubhagya scheme. The focus is now on penetrating deeper into the isolated regions of the country and ensuring 24x7 power supply for all. The microgrids will play a crucial role in enabling this. Power Trading Around 140 billion units (BUs) of electricity were traded in the short-term power market during FY20, as compared to a total of 145.2 BUs traded during FY19. Out of this, about 35% of trading took place using power exchange platforms. The trading margins were under immense pressure due to high competition amongst traders. The competition grew fierce due to an increase in the number of CERC licensed traders – from 11 in FY05 to 37 in FY19. At ` 3.005 per unit, the average clearing price for spot markets in FY20 decreased by 22% as compared to the previous fiscal. The decrease in spot price is largely attributable to lower demand, primarily because of the downward impact of COVID-19 in March 2020 on the economy and the manufacturing sector, and the availability of higher merchant capacity for power sale on exchange platforms. Regulatory And Policy Developments Regulatory and policy reforms in the sector are critical, given the current challenges across the value chain. The Ministry of Power released a revised draft of the Electricity Amendment Bill 2020 that seeks privatisation of Discoms through franchisees or sub-licencing, recommends formation of Electricity Contract Enforcement Authority (ECEA) for enforcement of contractual obligation and proposes the National Renewable Energy Policy for promotion of RE generation. It also proposes retail tariff determination to be without subsidy and introduced the Direct Benefit Transfer (DBT) scheme for any subsidy disbursal. The following are some of the important regulatory and policy changes introduced in FY20: Maharashtra: y Maharashtra Electricity Regulatory Commission (MERC) notified the Multi Year Tariff (MYT) Regulations, 2019, applicable for the Control Period from FY21 to FY25, wherein the Commission has linked the recovery of additional Return on Equity (RoE), in addition to the base RoE to improvement in efficiency in actual performance of the Generating Company, Transmission Licensee and Distribution Wires Business. Additionally, the Regulations provide that rate of RoE, including additional rate of RoE, shall be grossed up with the effective tax rate of respective financial year instead of the earlier approach of reimbursement of tax on income computed on Profit Before Tax (PBT). The Tata Power Company Limited Integrated Annual Report 2019-20 In addition, the most prominent impact of this Regulation includes no reduction of equity for older plants, incentives on making higher power generation during peak hours. For Hydro generating stations, incentive on excess generation from saleable Design Energy has been increased from existing 90 paise/unit to 120 paise/ unit and rate of depreciation on batteries has been increased from existing 5.28% to 18%. y MERC notified the Deviation Settlement Mechanism (DSM) Regulations, 2019. As per the said Regulations, the energy accounting and deviation settlement will no longer be as per the Final Balancing and Settlement Mechanism (FBSM) and the provisions under the DSM Regulations will override the FBSM. The Commission vide the said Regulations has set the Deviation Volume Limit for each utility and the consequential penalty for under-drawing or over-drawing beyond the defined limit. Further, a pass through of such penalty as part of the Annual Revenue Requirement (ARR) of the utility will not be allowed. y MERC notified the Guidelines for operation of Merit Order Despatch under Availability Based Tariff Order applicable from 1st April 2019 onwards wherein the Distribution Utility wise Merit Order Despatch (MOD) stack shall be prepared by Maharashtra State Load Despatch Centre (MSLDC) as compared to the state-wise MOD stack being prepared before the notification of the aforesaid guidelines. Hence, a Distribution Utility can now have access to the lowest variable cost generator tied up with another Distribution Utility only through an independent commercial arrangement. The guideline also put in place ‘zero schedule’ and ‘Reserve Shut Down (RSD)’ for generating stations in addition to specifying technical minimum for their operation. incremental Demand Charges y In June 2019, MERC amended the MERC Distribution Open Access Regulations, 2016. MERC has introduced conditions of Notional Contract Demand and levy of in cases where consumers, who do not opt for reduction in Contract Demand up to Open Access Capacity. In addition, the duration of the term of open access has been redefined. Further, repeated Short Term Open Access applications will be levied with additional transmission charges. Deviation Charges have been brought in line with the DSM Regulations (from its effective date). The Commission has also permitted banking of energy on a monthly basis. MERC has also made similar amendments in the MERC Transmission Open Access Regulations, 2016. y All generating companies and utilities in Maharashtra submitted tariff petitions to MERC seeking approval of True-up of Aggregate Revenue Requirement (ARR) for FY18 and FY19, Provisional True-up of Aggregate Revenue Requirement for FY20, and approval of ARR and Tariff for the MYT 4th Control Period from FY21 to FY25 for its Generation, Distribution and Transmission Business in November 2019. Subsequently, public notices were issued followed by public hearings seeking suggestions and objections from the public at large. After prudence check of the respective tariff petitions, the MERC has issued the Orders for the Generation, Distribution and Transmission Business approving the tariff largely in line with the tariff applications submitted by the Company. The new tariffs are applicable from 1st April 2020 onwards. Renewables y MERC issued Grid Interactive Rooftop Renewable Energy Generating Systems Regulations, 2019. The Regulations apply to Net Metering Arrangements, Net Billing Arrangements and Grid Connected Renewable Energy Generating Systems connected behind the Consumer’s meter, for those who have not opted either for Net Metering Arrangement or Net Billing Arrangement. The purpose of the said Regulation is to introduce modifications in certain clauses vis-à-vis the clauses specified in the MERC Net Metering Regulations, 2015 based on the experiences in implementation of the Net Metering Regulations, and in order to simplify/clarify/amend certain provisions as considered reasonable. y MERC issued Terms and Conditions for Determination of Renewable Energy Tariff Regulations, 2019 and Renewable Purchase Obligation, its Compliance Implementation of Renewable Energy and Certificate Framework Regulations, 2019. CERC & JSERC y CERC (Sharing of Revenue Derived from Utilisation of Transmission Assets for Other Business) Regulations, 2020 CERC issued the above Regulation, which is applicable to the inter-state transmission licensees who are proposing to undertake other business. This Regulation defines the manner of sharing of revenue from other business and the consequential reduction of transmission charges payable by the long-term customers of the transmission assets in proportion to the transmission charges payable by them to the transmission licensee. In case the transmission licensee engages in telecommunication business, an amount equal to 10% of the gross revenue from such business in a given financial year shall be shared with the long-term customers. In case the other business is not a telecommunication business, the 183 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices Management Discussion & Analysis sharing of revenue shall be decided by the Commission on a case-to-case basis based on transmission assets utilised for such other business. y Jharkhand State Electricity Regulatory Commission (JSERC) (Operation of Parallel Licensees) Regulations, 2019 The Commission, through this Regulation, aims to enable the consumer, in those areas, to avail electricity from any of the Distribution Licensees as per the choice of the consumer. This will also foster competition and may improve the utilisation of the existing assets. In cases where the distribution system of one Distribution Licensee already exists, the other Distribution Licensee may provide electricity to consumers by using the wires of the other licensee on payment of wheeling charges to the Licensee, whose wire is being used. 2. Tata Power Business Portfolio, Opportunities and Outlook Your Company’s generation business operates under various business models across divisions in the domestic as well as international markets, with the PPA/Fixed Tariff model contributing to the largest share of the generation segment. The following is a summary of the different business models under which various generation assets of your Company operate. Model Returns Project Capacity (MW) % Overall Capacity Regulated Tariff Regulated return on equity Mumbai operations (Trombay and Hydro), 2,775 Maithon, Jojobera (Unit 2 and 3) TPDDL-Rithala PPA/Fixed Tariff (Renewables) Feed In Tariff + Bid Driven Wind and Solar Projects (Domestic) PPA/Fixed Tariff (Bid/ Others) Bilateral Agreement + Bid Driven Jojobera (Unit 1 and 4), CGPL, Itezhi-Tezhi, Hydro projects, Georgia hydro, Kalinganagar-IEL-40 MW Captive Merchant Under platform management Total Bilateral Captive Agreement IEL (Unit 5, PH6, KPO), CKP (Indonesia) Market Driven PPA Based Haldia, Dagachhu Prayagraj 2,637 4,676 429 246 1,980 12,742 21.8 20.7 36.7 3.4 1.9 15.5 100 The Indian market continues to remain the primary focus of business for your Company with domestic markets accounting for more than 90% of generation capacity. As highlighted earlier, your Company has put in place well- defined plans to grow in the areas of renewable generation, distribution as well as new and service-led businesses. Renewables Generation Your Company is a leading player in the renewable generation space, having a presence across the value chain. Significant growth opportunities in renewables (both organic and inorganic) are expected to arise in the future and your Company plans to increase its footprint by capitalising on those opportunities through value- accretive projects. Significant emphasis has been laid on rooftop solar, and your Company has already rolled it out in 94 cities till March 2020. In the microgrids space, your Company intends to install 10,000 microgrids to service and meet the electricity requirements of customers in remote areas with unstable grid networks. Thermal and Hydro Generation Your Company plans to limit its exposure to thermal projects and does not intend to expand its coal based power plant portfolio beyond the current size. Your Company does not have any greenfield or brownfield expansion plans in the near term, but would continue to maintain the existing thermal and hydro operations in a sustainable manner. However, your Company has explored the inorganic route to acquire a few stressed thermal assets through Resurgent and has acquired PPGCL, a super critical Thermal plant (1,980 MW) in Uttar Pradesh. Your Company has been granted a long-term coal mining license for the Krutogorovskya coal deposit located in Sobolevo District, Kamchatka of the Russian Federation under competitive bidding, to explore cheaper and sustainable coal supply its subsidiary, Coastal for Gujarat Power Limited (CGPL). The project feasibility is being studied. Your Company is also evaluating growth opportunities in services for thermal and hydro plants by leveraging its technical and operation expertise. Transmission Your Company is significantly focusing on augmenting transmission in Mumbai operations. In addition, your Company will also look for suitable opportunities for acquiring few assets through M&A. infrastructure 184 The Tata Power Company Limited Integrated Annual Report 2019-20 Distribution With growing focus on improving the state of the distribution business, more states have been adopting the Distribution Franchisee (DF) model, while a few have invited bids through the PPP route. Your Company has already acquired CESU in Odisha and will evaluate similar opportunities in future to be a leading player in this space. Your Company will also explore services business opportunities in both, domestic and international markets. Company in capitalising on favourable market conditions, while ensuring stable returns. Highlights of operational performance of key entities are listed below: Renewables Tata Power Renewable Energy Limited - TPREL (1,187 MW) Type of entity: Wholly owned subsidiary i.e. businesses with looking to scale-up New and Service-Led Businesses its service Your Company is little or no capital businesses, investment (EV Charging, Home Automation, Distribution services, Thermal O&M services and solar EPC) and is also evaluating opportunities in emerging business areas such as microgrids, rooftop solar, energy efficiency solutions and EV charging stations. It has collaborated with Tata Motors Limited to roll-out EV charging infrastructure and aims to expand its presence further in high EV adoption cities in India. Your Company is also working on developing a robust software platform for customers of EV charging and has released a mobile based application towards the same effect. With the increase in EV adoption, your Company plans to cover the segments of home, workplace and captive charging through different models and approaches. Your Company has collaborated with the Rockefeller Foundation to roll out 10,000 microgrids to provide innovative solutions for the under-served communities and expand the global microgrid footprint. Your Company has also identified eight business wide Strategic Business Objectives (SBO). You may refer to page number 23 of the Integrated Report for a detailed explanation of these SBOs, along with goals and action plans to achieve these objectives. 3. Business Performance are Consolidated operations of categorised into four segments: Generation, Transmission & Distribution, Renewables and Others. Report on the performance and financial position of each of the subsidiaries, joint ventures and associate companies has been provided in Form AOC-1. your Company Your Company’s business performance in FY20 was mainly driven by lower losses in CGPL, capacity addition in renewables and strong operational performance across all businesses. The large section of the portfolio being under the regulated framework demonstrates the strong and reliable fundamentals of your Company’s finances. Also, the balance between regulated return businesses and market-linked businesses in it’s portfolio aids your Particulars Generation Sales (MUs) Net sales (` crore) PAT (` crore) FY20 2,162 975 (51) FY19 1,450 774 89 TPREL’s higher sales were due to addition of solar capacity during the year. During FY20, the company has added 300 MW Solar PV assets in operating portfolio and 9 MW of Rooftop Solar assets. The company has commissioned two new solar projects during the year – 150 MW at Karnataka (3 blocks of 50 MW each in Pavagada Solar Park), 150 MW at Pokharan in Rajasthan. The PAT for the year has reduced due to lower dividend income from Walwhan Renewable Energy Limited (WREL), increased O&M costs due to end of free O&M period at its wind sites located in Andhra Pradesh, Gujarat, Madhya Pradesh, curtailment of power offtake in Andhra Pradesh, one time impact of adoption of new tax regime and increased finance charges due to higher borrowings drawn to fund projects. During the year, the company evaluated the option given under the New Tax Ordinance and found that it would be beneficial to opt for the new tax regime. Based on this decision, the company reversed the MAT credit amount of ` 48 crore during the year resulting in lower profit for the year. The company is executing 650 MW solar PV projects under long term PPAs in Gujarat, Uttar Pradesh and Rajasthan. 400 MW of this capacity will be based out of solar parks located in Gujarat with long term power tie up with Gujarat Urja Vikas Nigam Limited (GUVNL). The Company has also signed PPA with Tata Power-Distribution for supply of 150 MW long term Solar power for which it is proposing to develop the project in Rajasthan. It has also signed a 100 MW PPA with Uttar Pradesh Power Corporation Limited and Noida Power Corporation Limited, awarded through a bid process conducted by the Uttar Pradesh New and Renewable Energy Development Agency. The company has planned commissioning of 650 MW capacity by Q4 of FY21. The company is also developing a 50 MW solar project in Maharashtra through its subsidiary, Poolavadi Windfarms Limited which will sell power to Netmagic IT Services Limited for their captive consumption. The commissioned capacity at the end of FY20 was 1,187 MW which included Vagarai Wind Farm Limited (21 MW) 185 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices Management Discussion & Analysis and Indorama Renewable Jath Limited (30 MW). The carve out of 379 MW of RE assets from Tata Power to TPREL through National Company Law Tribunal approved process is under review. Walwhan Renewable Energy Limited – WREL (Consolidated Financial statement) (1,010 MW) Type of entity: Wholly owned subsidiary (through TPREL) WREL is a wholly owned subsidiary of TPREL. It has an operating capacity of 1,010 MW, out of which 864 MW is solar and 146 MW is wind power. A major part of the capacity is in Tamil Nadu, followed by Rajasthan, Madhya Pradesh, Karnataka and Andhra Pradesh. The generation achieved by WREL in FY20 was 1,639 MUs as against 1,745 MUs in FY19. The lower generation was mainly on account of change in weather pattern this year with extended monsoon, higher cloud cover and lower wind speed till February 2020. The availability of generation assets of WREL has improved from 98.6% in FY19 to 98.8% in FY20 through various initiatives taken during the year. Particulars Generation Sales (MUs) Net Sales (` crore) PAT (` crore) FY20 1,639 1,203 183 FY19 1,745 1,272 300 The PAT decreased due to adoption of the new tax regime, the impact of which was ` 110 crore and lower generation. During the year, the company evaluated the option given under the New Tax Ordinance and found that it would be beneficial to opt for the new tax regime as this will result in significant reduction in the tax outgo for the company. Based on this decision, the company reversed the MAT credit amount to ` 110 crore during the year resulting in lower profit for the year. Tata Power Solar Systems Limited – TPSSL Type of entity: Wholly owned subsidiary Particulars Net sales (` crore) PAT (` crore) FY20 2,141 123 FY19 3,175 90 The sales are lower during the year mainly due to delay in the solar EPC projects on account of COVID-19. However, the sales from Rooftop and Products segments increased by 32% and 88% respectively. During the year, the company implemented various cost reduction initiatives, which resulted in increase in PAT by 36% over the previous year. During the financial year, 1,280 MW of utility-scale solar projects have been executed or are currently under execution. The company commissioned three blocks of the Karnataka Renewable Energy Development Limited 186 Pavagada project, i.e. 150 MW of the total 250 MW project capacity about five months before the scheduled date, 150 MW for Maharashtra State Electricity Distribution Company Limited at Chhayan, 200 MW for Softbank in Pavagada and 90 MW for Greenko in Shivpuri. TPSSL has won 1,580 MW orders during this financial year and currently has the highest ever order book value of around ` 7,000 crore. TPSSL further fortified its manufacturing capabilities this year and produced over 180 MW cells and 240 MW of modules. It has now attained module wattages of 335 Wp using its own cells. In the solar products domain, the company was declared as a market leader, with over 12,500 solar agricultural pumps installed in seven states in FY20, a growth of more than 180% from the previous year. During the financial year, the company continued to be a pioneer in the rooftop solar domain with projects of 66 MWp capacity executed and of 48 MWp capacity under execution. The Rooftop Focus City Launch campaign targeting 100 cities across India kicked off in September 2018 in New Delhi and covered 94 cities by the end of FY20. The company recorded solar module export revenue of over ` 105 crore to clients in the United States. Renewables Division on The Balance-Sheet of the Parent Company (379 MW) Type of entity: Division Particulars Generation Sales (MUs) FY20 643 FY19 632 The portfolio comprises 376 MW of wind assets and 3 MW of solar assets at Mulshi. The carve-out process for said assets from Tata Power to TPREL is under review. Tata Power Hydros (447 MW) Type of entity: Division Particulars Generation Sales (MUs)* FY20 1,493 FY19 1,548 *Includes sales to company’s distribution division During the year, generation sales was marginally lower than that of the previous year on account of lower demand. Lake levels have been maintained to meet the requirement of peak power till next monsoon (i.e. till June-July 2020). Availability for the year at 96% was lower compared to the previous year on account of planned major overhauls of 24 MW units at Khopoli and Bhivpuri and 150 MW BPSU at Bhira. These overhauls were completed as per the scheduled timelines. The Tata Power Company Limited Integrated Annual Report 2019-20 CGPL, Coal and Related Infrastructure Companies Coastal Gujarat Power Limited - CGPL (4,150 MW) Type of entity: Wholly owned subsidiary Particulars Generation Sales (MUs) Net sales (` crore) PAT (` crore) FY20 24,463 7,017 FY19 24,752 7,064 (891) (1,654) Loss in FY20 was lower as compared to FY19 mainly due to lower under-recovery on account of lower coal benchmark prices, optimized blending, effective coal procurement strategy and lower finance cost mainly due to re-financing of ECB loan partly offset by impact of Ind-AS 116. Under-recovery of fuel cost is listed below: Particulars Total Revenue* (` crore) EBITDA (` crore) Fuel under-recovery** (in ` crore) (in ` per kWh) FY20 7,037 810 FY19 7,137 (194) (1,066)*** (0.44)*** (2,080) (0.84) * Total revenue consists of Revenue other income from Operations and ** Fuel under-recovery consists of total coal cost under recovery (Fuel revenue net of coal costs). *** Fuel under-recovery includes ` 230 crore Ind-AS 116 non-cash positive impact for FY20. It is pertinent to note that the increase in EBITDA in CGPL is due to lower fuel under-recovery on account of lower benchmark coal price and optimised blending and lower forex loss pertaining to coal and freight exposures in FY20. CGPL continues to engage with the procuring states to find a solution for long-term viability of the plant. CGPL is also making efforts to improve profitability through initiatives like sourcing of low-cost coal from other geographies and low calorific value coal. increasing blending of Mundra (CGPL) Tariff Relief matter A ‘High Power Committee’ (HPC) was constituted by the Government of Gujarat (GoG) for suggesting relief to stressed thermal plants arising out of the issue of change in coal law in Indonesia. This HPC re-looked, reviewed, analysed and re-evaluated the overall situation afresh and made reasoned recommendations on 3rd October 2018 along with a draft Supplemental PPA to be executed between the parties to PPA. The Supreme Court passed an order allowing the parties to approach CERC for amendments in the PPAs in response to application filed by GoG and State Bank of India. Subsequently, based on the recommendation and acceptance of GoG for HPC recommendation, GUVNL has finalised Supplemental PPA and circulated to other Procurers (four states) seeking their approval. CGPL is pursuing the matter with other Procuring States for a consensus on Supplemental PPA circulated by GUVNL. As per the legal opinion received, even if UMPP Mundra supplies power as per the tariff discovered through the competitive bidding process to five states under single PPA, in order to implement HPC recommendations, CGPL can enter into separate Supplemental PPAs with each Procurer. CGPL is pursuing with Gujarat and Maharashtra to sign separate supplemental PPAs and once Supplemental PPAs are signed, parties will approach CERC for approval of the same. Once HPC recommendation is implemented in these two states, the matter will be taken up with other Procuring States. Russian Coal Mine Development Project The Company has acquired a long-term coal mining license for the Krutogorovskya coal deposit located in the Sobolevo District, Kamchatka of the Russian Federation under competitive bidding, to explore cheaper and sustainable coal supply for its subsidiary CGPL. The Far East Natural Resources LLC (FENR) is a registered local subsidiary entity of Tata Power International Pte Limited (TPIPL) and Bhira Investments Pte Limited (Bhira) incorporated in Russia to develop this coal mine. The Company also signed the TOR-I agreement with Far East Development Corporation (FEDC) Russia to become a resident of Advanced Special Economic Zone (ASEZ) and avail benefits/grants extended to the resident companies. Firm estimates of reserves and resource are being assessed through detailed drilling and exploration activities, which are presently under progress. Regulatory matters Ministry of Environment, Forest and Climate Change (MOEF&CC) vide its notification dated 7th December 2015 mandated all thermal power plants to comply with new environmental norms. Implementation of such revised environmental norms requires huge Capex and Opex. Therefore, CGPL filed a petition seeking in-principle Capex and Opex approval to secure finance from the lending institution. CERC passed an order in September 2018 holding that new/revised environmental norms qualify as change in law under the provision of PPA. Further, the company approached the CERC for determination of increase in cost or/and revenue expenditure on account of implementation of revised norms in accordance with the guidelines to be issued by CEA and the mode of recovery of the same through the monthly tariff. CGPL had a series of meetings and discussion with CEA and finalised the technology, based on which it filed a petition in June 2019 seeking approval of capital expenditure and annual operating expenditure. The matter has been heard on merit and reserved for order. 187 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices Management Discussion & Analysis Coal & Infrastructure Companies The Company, through its subsidiaries, holds a 30% stake in PT Kaltim Prima Coal (KPC) and a 26% stake in PT Baramulti Suksessarana Tbk (BSSR), which are strategic assets to hedge imported coal price exposure at CGPL and form an important part of the supply chain for its coal off- take requirements. Your Company has signed an agreement to sell its 30% stake in PT Arutmin Indonesia and associated companies in coal trading and infrastructure. The aggregate consideration for the stake is $ 401 million, subject to certain closing adjustments and restructuring actions. The Company received $ 214.9 million till March 2020 and expects to receive periodic payments in future. The Company is pursuing steps to conclude this transaction. The mining license for KPC is due for renewal in December 2021. KPC team has initiated the process of application for renewal of license and has submitted preliminary documents to the mining department. Indonesian Government is in process of making amendment in Mining Law. The parliamentary committee has conducted hearings and deliberations with the Ministry of Energy and Mines on the revision of this law. The revised Mining Law is expected to be passed in the first quarter of FY21 by Indonesia’s Parliament. The proposed changes, a few being extension in license area, auto renewal of mining contracts, etc., in the revised bill will benefit the mining companies operating in the region. Once implemented, this will also help KPC in its process of license renewal. PT Kaltim Prima Coal, Indonesia Particulars Coal Production (Million Tons) Net sales* (` crore) PAT* (` crore) FY20 61.2 24,628 1,206 FY19 58.5 25,997 2,462 *Figures are on 100% basis. The Company’s share is 30%. The coal price realisation for the year was at $ 55.22/tonne as compared to $ 63.56/tonne in the previous year. KPC’s profitability was adversely affected due to a drop in the international coal price index. PT Baramulti Suksessarana Tbk, and PT Antang Gunung Meratus Indonesia Particulars Coal Production (Million Tons) Net sales* (` crore) PAT* (` crore) FY20 11.7 2,936 277 FY19 11.7 3,169 354 *Figures are on 100% basis. The Company’s share is 26%. 188 is lower mainly due to PAT lower average price realisation at $ 35.11/tonne as compared to $ 38.98/tonne in the previous year. The status of infrastructure company at Indonesia, PT Nusa Tambang Pratama was as under: PT Nusa Tambang Pratama, Indonesia Particulars Net sales* (` crore) PAT* (` crore) FY20 1,065 639 FY19 1,019 632 *Figures are on 100% basis. The Company’s share is 30%. Trust Energy Resources Pte. Limited – Trust Energy Type of entity: Wholly owned subsidiary Particulars Net sales (` crore) PAT (` crore) FY20 1,086 185 FY19 1,298 168 PAT and sales for FY20 includes Energy Eastern Pte Limited as well. The three ships owned by Trust Energy maintained an overall availability of more than 99% with no major safety incidents. Coal shipments for Mundra Power Plant were performed as per plan in FY20. The company continued to undertake several measures to improve the operating efficiencies and reduced operating expenditure by optimising insurance premium and ensuring a lean structure to manage overhead costs. The daily operating expenses for all three ships are at benchmark levels as per industry standards. Thermal Generation Maithon Power Limited – MPL (1,050 MW) Type of entity: Subsidiary (Tata Power: 74%, Damodar Valley Corporation: 26%) Particulars Generation Sales (MUs) Net sales* (` crore) PAT* (` crore) FY20 6,340 2,741 338 FY19 6,858 2,776 273 *Figures are on 100% basis. The Company’s share is 74%. PAT has improved mainly due to the impact of favourable CERC orders and additional revenue generated due to introduced in the RRAS/SCED Scheme participation during the year. MPL maintained its strong financial position as evident by the ratings given by CARE and CRISIL for the long term (CARE AA) and short-term (CRISIL A1+) bank facilities. In principle approval has been obtained from Central Electricity Regulatory Commission (CERC) for setting up of Flue Gas Desulphurisation system. The Tata Power Company Limited Integrated Annual Report 2019-20 Industrial Energy Limited – IEL (415 MW) Type of entity: Subsidiary (Tata Power: 74%, Tata Steel: 26%) (Joint Venture under Ind AS) Particulars Generation Sales (MUs) Net sales* (` crore) PAT* (` crore) FY20 2,829 301 149 FY19 2,992 300 111 *Figures are on 100% basis. The Company’s share is 74%. IEL operates a 120 MW tolling coal-based plant in Jojobera. It also operates a 120 MW co-generation plant (Power House #6) in Jamshedpur, inside the Tata Steel plant, which is based on blast furnace and coke oven gas. 2 out of 3 units of 67.5 MW each of co-generation plant at Kalinganagar, Odisha, are also under operation by deploying production gases from Tata Steel’s plant. The company has started executing the third turbine of 67.5 MW co-generation plant at Kalinganagar, Odisha, based on discussions with Tata Steel for Phase Two of the steel plant. During the year, the company evaluated the option given under the New Tax Ordinance and found that it would be beneficial to opt for the new tax regime from FY32 since MAT credit will be fully utilised by FY31. This resulted in reversal of the deferred tax liability amounting to ` 48 crore, which improved the profitability for the year. Jamshedpur Unit 5 achieved highest monthly generation since inception in the month of December 2019, surpassing its previous best in May 2018. MoU have been signed with Tata Steel for multiple captive projects, including Captive Power Plant # 2, various CDQs, TRT projects, DG Projects and Thermal Projects. Trombay (930 MW) Type of entity: Division Particulars Generation Sales (MUs)* FY20 5,576 FY19 6,092 *Includes sales to Company’s distribution division. The plant achieved an availability of 94% in FY20 (compared to last year’s availability of 95%). Unit 5 and Unit 7 overhauling were successfully completed within the stipulated time frame. The plant had undertaken several operational improvement measures including reduction in auxiliary consumption, optimisation of operational expenses and reduction of store inventory etc. Jojobera (428 MW) Type of entity: Division Particulars Generation Sales (MUs) FY20 2,681 FY19 2,604 Jojobera plant achieved availability of 97% in FY20 improving from the previous year level of 92%. The plant had also achieved maximum continuous running days of Unit 3 (327 days) and Unit 4 (352 days) in FY20 since inception. The Jojobera Division secured 4.6 lakh MT coal from Shakti B (ii) coal linkage auction in May 2019. Haldia (120 MW) Type of entity: Division Particulars Generation Sales (MUs) FY20 693 FY19 704 Generation sales in FY20 were marginally lower than the previous year. However, lower flue gas availability from Tata Steel continues to remain a challenge for enhancing generation sales. The plant availability in FY20 is 97%, which is significantly higher than the FY19 achievement of 90%. Transmission Mumbai Transmission The transmission assets, which are a part of the Mumbai license area, had a grid availability of 99.75% in FY20 as against the MERC norm of 98%. Availability was maintained at high levels by proactive actions taken based on preventive maintenance practices, effective condition monitoring and judicious planning and execution of planned outages. Particulars Grid Availability (%) Transmission Capacity (MVA) FY20 99.75 9,838 FY19 99.50 9,803 Powerlinks Transmission Limited – PTL Type of entity: Subsidiary (Tata Power: 51%, Power Grid Corporation of (Joint Venture under Ind AS) India Limited: 49%) Particulars Net sales* (` crore) PAT* (` crore) FY20 92 121 FY19 146 113 *Figures are on 100% basis. The Company’s share is 51%. The availability of the lines was maintained at 99.97% for Eastern Region in FY20 (previous year availability stood at 99.97%) and 99.95% for Northern Region (previous year availability was 99.89%), as against the minimum stipulated availability of 98.50%. PAT for FY20 is higher mainly because of one-time impact due to change in MAT rate from 18.5% to 15% as per the New Tax Ordinance. 189 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices Management Discussion & Analysis Distribution Mumbai Distribution The highlights of the Mumbai Distribution business are as follows: Particulars Sales (MUs) Consumer Base (Nos.) FY20 4,573 FY19 4,521 7,20,310 7,01,438 Mumbai Distribution has added about 20,000 customers in FY20. The overall MUs sales has remained constant over the last year. The Multi-Year Tariff (MYT) order for Tata Power Mumbai Distribution was rolled out for FY21 to FY25 by MERC in FY20. Some key highlights of the Mumbai Distribution business including certain improve customer experience are: initiatives to y Mumbai Distribution is now (ISO IMS certified 9001:2015 for Quality Management system, ISO 14001:2015 for Environmental Management system, ISO 45001:2018 for Occupational Health and Safety Management system). y Won Platinum Award at ISGF Innovation Awards 2020 for ‘Most Reliable Supply of Electricity by Utility in India’. y Introduced a real-time tracking solution, where customers can track the real-time location of the complaint management crew. y Smart Meter Reading and Dispatch app (SMRD) was rolled out for meter reading activities, online spot billing and collection. y Became the first power utility to launch ‘Kaizala’, collaboration with Microsoft, a one-stop billing information and complaint in window and meter management for consumers. information/alert-sharing, related for y Added another all-women Customer Relations Centre at Ghatkopar, Mumbai, taking the total number to 4. y Know Your Electricity Consumption (KYEC) launched as part of Value-Added Services, which helps consumers monitor and analyse energy usage, made available in intervals of 15 minutes, to help consumers take decisions. Tata Power Delhi Distribution Limited – TPDDL Type of entity: Subsidiary (Tata Power: 51%, Government of National Capital Territory (NCT) of Delhi: 49%) Particulars Distribution Sales (MUs) Net sales (` crore) PAT (` crore) FY20 9,051 7,888 414 FY19 8,870 7,600 336 190 The profit during the year increased due to one-time impact of impairment of ` 106 crore for Rithala Plant in the previous year. In FY20, TPDDL had a registered customer base of 17.56 lakh spanning across an area of 510 sq. km. in North and North-West parts of Delhi. The AT&C losses for the year stood at 7.89% as against 7.93% last year. TPDDL met a peak demand of 2,069 MW in FY20 as compared to 1,967 MW during the last year. TPDDL was able to reduce the System Average Interruption Duration Index (SAIDI) to a level of 26.97 hours against the 38.43 hours in the previous financial year. TPDDL has given paramount importance to quality in all aspects of service delivery while at the same time focusing on optimising costs and meeting increasingly stringent regulatory guidelines. TPDDL has adopted TQM framework for taking operational excellence to the next higher level. TPDDL took several initiatives during the year: y Furthered the implementation of Advanced Metering Infrastructure (AMI) and rolled-out Smart Meter for its customers. During the financial year, 1.94 lakh Smart Meters were installed within the licensed area. To increase transparency and customer satisfaction, the data generated from the Smart Meters has been integrated with the TPDDL Mobile app. y Launched an interactive bill service through WhatsApp with the feature of audio description of bill, 6 months bill history details, nearby payment avenues along with existing offers and schemes. y Launched various energy efficiency programmes like 5-star AC Replacement Scheme, Super-Efficient BLDC Fan and LED Lighting Products, which helped reduce the Peak Load by 65 MW, with 99 MUs energy saving, leading to 32,531 MT CO2 reduction since FY15. y TPDDL is exploring innovative technology adoption to improve its overall performance and enhance customer experience. Under the Horizon 2020 programme, funded by the European Union, TPDDL is carrying out a pilot exercise of deploying an Energy Islanding System at one of its distribution sub-stations with the aim of creating a model for individual community-based storage systems. The project has deployed a holistic approach including community engagement and technology deployment to create a successful model. The Tata Power Company Limited Integrated Annual Report 2019-20 TP Ajmer Distribution Limited – TPADL Type of entity: Wholly owned subsidiary Particulars Distribution Sales (MUs) Net sales (` crore) PAT (` crore) FY20 483 401 1.02 FY19 465 376 0.40 TPADL has been operating as a franchisee for the supply and distribution of power in Ajmer city over the past three years. The total area under the franchisee is around 190 sq. km. The total consumer base in FY20 is 1.51 lakh and total peak demand is 128.64 MW, higher by 14.5% compared to that of last year. In FY20, PAT increased due to strong operational performance and AT&C loss reduction from 11.2% in FY19 to 9.96% in FY20. For enhancing consumer centricity and reliability, various initiatives were implemented resulting in improvement in business performance, which were manifested by 60% reduction in commercial complaints compared to previous year, zero meter faulty pendency within 30 days, reduction in provisional billing from 3.8% in FY19 to 1.8% in FY20, increase in digital payment from 19.0 % in FY19 to 33.4 % in FY20. The average restoration time of tripping also improved from 6.40 minutes in FY19 to 4.22 minutes in FY20 (34.1% reduction). Other Businesses Services In FY20, the Services division provided O&M management services for 3,180 MW capacity, complete O&M services for 99 MW, Project Management Services for 120 MW, Corporate Management Services for 1,425 MW and Asset Management Services for 692 MW of wind and solar assets. In addition, the division provided services such as training for Asset Management and Safety Management systems etc. to various clients. Tata Power Trading Company Limited – TPTCL Type of entity: Wholly owned subsidiary Particulars Generation Sales (MUs) Net sales (` crore) PAT (` crore) FY20 10,155 248 41 FY19 10,442 262 37 TPTCL’s PAT improved over that of last year owing to higher realisation for sale of power from Dagachhu Hydro Power Corporation Limited (DHPC) in Bhutan, improvement in working capital cycle, efficient receivables management and lower tax expenses on account of shifting to the new tax regime in the current year. New Businesses – EV Charging In line with its larger aim of being a change agent towards green and sustainable development, your Company has made a significant impact in developing EV ecosystem and encouraging EV adoption in the country. Your Company is committed to play a key role along with other stakeholders in achieving the national goal of transition to electric mobility. In FY20, Tata Power partnered with Tata Motors and Jaguar Land Rover for developing EV Charging Infrastructure for their customers and dealers. In Q4 FY20, your Company rolled out Beta Version of its Software Platform and Mobile App that plays a crucial role in the customer journey of EV charging, by helping customers in locating EV charging stations, charging EVs and making bill payments online. Tata Power EV charging points are now present in 20 cities including Delhi, Mumbai, Bengaluru, Pune, Hyderabad, Kolkata, Chennai, Ahmedabad and Lucknow, under various business models and market segments. Your Company aims to increase its presence both in terms of a greater number of charging stations and larger geographical presence across the country. As on 31st March 2020, your Company has set up 170 EV charging points in 20 cities. International Businesses Cennergi Pty Limited – Cennergi (230 MW) Type of entity: Joint Venture (Tata Power (through Khopoli Investments Limited) 50%, Exxaro Resources Limited 50%) Cennergi is an independent power producer jointly owned by Tata Power (50%) and Exxaro Resources Limited (Exxaro) (50%). The 134 MW Amakhala Emoyeni wind farm was commissioned on 28th July 2016 with the 95 MW Tsitsikamma Community Wind Farm reaching COD on 18th August 2016. The Company sold its entire stake in Cennergi to Exxaro on 31st March 2020 for ₹ 842 crore including hedging gain. Dagachhu Hydro Power Corporation Limited – DHPC (126 MW) Type of entity: Associate (Tata Power 26%, Druk Green Power Corporation Limited & Affiliates: 74%) Particulars Generation Sales (MUs) Net sales* (` crore) PAT* (` crore) FY20 FY19 513 143 (43) 495 124 (25) *Figures are on 100% basis. The Company’s share is 26%. While the generation sales increased from 495 MUs in FY19 to 513 MUs in FY20, foreign exchange variations resulted in increase of loss to ` (43) crore. 191 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices Management Discussion & Analysis Adjaristsqali Georgia LLC - AGL Type of entity: Joint Venture (Tata Power (through TPIPL): 50%, Clean Energy Invest: 50%) is developing a 187 MW hydropower project AGL (Shuakhevi and Skhalta projects) on the Adjaristsqali River and its tributaries in Georgia. This is one of the largest infrastructure investments in Georgia. The plant operations were suspended in October 2017 on account of collapses experienced in certain sections of the tunnels. The company received insurance claims proceeds from its insurers, which were used towards restoration and repair of the tunnels. The Company also negotiated a restructuring package with the project lenders to sustain the viability of the project. AGL had engaged experts from Austria and Brazil in tandem with the Owner’s Engineer team (Mott MacDonald UK) to identify the root cause of the collapses and understand the inconsistent geological behaviour in these tunnels to undertake the remedial work design required in the affected sections. the company held discussions with Further, the Government of Georgia for negotiating a Power Purchase Agreement (PPA) for the sale of power generated from the Shuakhevi Project. The same has been concluded and the amended BOO Agreement was executed in December 2019 for a 15-year PPA. The repair work has been completed and the tunnels have been put back in service. Further, both 89 MW Units of Shuakhevi HPP have been tested and re-commissioned and have commenced commercial operations in March 2020. The 9 MW Skhalta HPP, which is also a component of the overall project is expected to be commissioned in Q1 FY21. Digital Initiatives create Your Company has implemented digital technologies and solutions across various business segments in order to enhance customer experience, improve operational efficiencies , differentiation competitive support business growth. Tata Power has and implemented (IMS) Integrated Management System for Digital and IT and secured ISO 27001:2013 and ISO 9001:2015 Certification, that puts Tata Power Digital & IT service aligned with the accepted global benchmark. Some of the key initiatives across business/functions during the year are summarised as follows: Initiatives to enhance customer experience − Redesigning of customer mobile application, keeping focus on simplicity and user friendliness. − Simplification of online New Connection Application form resulting in significant reduction of average time taken to fill up the form from 15 min to 2 min. 192 − Implementation of Voice of Customer module for automatic capture of customer’s feedback/suggestions and assignment to appropriate through CRM stakeholders for prompt resolution. − Launch of ‘Kaizala’ App for Mumbai customers for variety of customer communications, including matters related to meter reading, billing, payment, discounts, complaints, etc. − AI assisted system to analyse the feedback received from the customers through email, automatically classify, create tickets and forward it to appropriate group of people for further action. Initiatives to enhance employee productivity, experience and learning − Implementation of O365 product suite for enhancing collaboration and productivity, and 24x7 availability and secured access to organisational data. − Setting up of the Data Analytics and Insights Academy, to build analytical capability across business clusters and functions, helping in enhancing business delivery outcomes by leveraging statistical, ML&AI methods. Initiative for business growth − EV – Mobile App for EV charging, developed in collaboration with other Tata group companies contributing to the development of the EV ecosystem. Initiatives to enhance Operational Efficiency (Asset performance and digitisation of process) − SAP footprint further extended to PPGCL to enhance business processes in terms of productivity, better inventory management, effective human resource management, etc. − Implementation of Project Management tool, Wrench for Roof Top Solar, to help TPSSL manage the real time status of various Roof Top Solar Projects. − Implementing Sales Force for Lead Management. − CCRA Infrastructure and platform integration – to help in near real-time monitoring of distributed generation assets (Solar and Wind) from a central location with the aid of automated system alerts, predictive analysis and reports. − Sankalp (RCM) – Implementation of APM tool in various generation plants including Trombay, Jojobera, MPL and CGPL to optimise the Preventive Maintenance (PM) cycle, improvement of reliability and utilisation of assets. − EKPI dashboards have been implemented for all major business verticals for monitoring and review of cluster and department level critical KPIs. As of now, around 140+ KPIs are deployed in various dashboards of T&D, The Tata Power Company Limited Integrated Annual Report 2019-20 Generation, Renewables, Finance and HR clusters. These KPIs are available to the Senior Management/ Cluster Heads for tracking and review of business performance at any point of time. − Automation of the Related Party Transaction process, which led to significant reduction of cycle time required for month-end closing, freeing up resources from the repetitive job and ensured robust control and compliance of applicable norms. Initiatives for communities − Implementation of Roshni portal to help in tracking the beneficiaries of community initiatives, thereby improving transparency of follow-up and such initiatives. the 4. Financial Performance – Standalone Your Company recorded a Profit After Tax of ` 148.12 crore during the financial year ended 31st March 2020 (the Profit After Tax was ` 1,768.70 crore in FY19). Both the basic and the diluted earnings per share were at ` (0.08) for FY20 and interest income from ICD given to subsidiaries, offset by the lower mutual fund and dividend income. Cost of Power Purchased and Cost of Fuel (` in crore) Particulars FY20 FY19 Change Cost of Power Purchased 458 457 1 Cost of Fuel 2,766 3,168 (402) % Change Nil (13) The cost of fuel was lower mainly due to lower generation and lower fuel price. Transmission Charges (` in crore) Particulars FY20 FY19 Change % Change Transmission Charges 214 248 (34) (14) Transmission charges are lower in the Mumbai regulated business on account of MYT order issued by MERC. The analysis of major items of the Standalone Financial Statements is shown below. Employee Benefit Expenses (` in crore) Revenue Particulars Revenue from Operations Regulatory Deferral Balances including deferred tax recoverable/(payable) Total Particulars FY20 FY19 Change % Change (` in crore) Employee benefit expenses 611 638 (27) (4) FY20 7,726 FY19 Change % Change 8,255 (651) (146) (529) (505) (6) (343) Employee Benefit Expenses are lower mainly due to reversal of performance pay provision and lower capitalisation of employee cost to the projects offset by higher provisions for retirals as per actuarial valuation. 7,075 8,109 (1,034) (13) Finance Costs The decrease in revenue was mainly due to lower generation on account of lower demand from procurers, lower transmission charges as per the MERC tariff order and the impact of the truing up order passed by MERC. Other Income Particulars Interest Income Dividend Income Gain/(Loss) on Investments Other Non-operating Income Total (` in crore) FY20 FY19 Change % Change 120 369 22 72 583 85 384 7 40 516 35 (15) 15 32 67 41 (4) 214 80 13 Increase in Other Income was mainly due to higher interest receipt on delayed payment from BEST, interest income on take or pay order in Mumbai Licensed area, guarantee commission income recognised pursuant to Advance Pricing Agreement with Income Tax Department Particulars Finance Costs (` in crore) FY20 FY19 Change % Change 1,510 1,500 10 1 Finance Cost was higher mainly due to increased borrowings and impact of IND-AS 116 off-set by higher interest paid on entry tax order in Mumbai Licensed Area in the previous year. Depreciation and Amortisation Particulars Depreciation and Amortisation (` in crore) FY20 FY19 Change % Change 686 633 53 8 Depreciation has increased mainly on account of Ind AS 116 and capitalisation during the year. 193 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices Management Discussion & Analysis Operations and Other Expenses (` in crore) Particulars FY20 FY19 Change % Change Repairs and maintenance Others Total 312 444 756 286 516 802 26 (72) (46) 9 (14) 6 The repairs and maintenance expenses were higher mainly due to scheduled outages planned for the business. The Other Expenses are lower due to reduction in the consultancy fees and rates, legal expenses and cost of service procured. Exceptional Items – Continued Operation (` in crore) Particulars FY20 FY19 Change % Change Reversal of Impairment of Non-current Investments and related obligation Standby Litigation Remeasurement of Deferred Tax Recoverable on account of New Tax Regime (net) Provision for contingencies Gain on sale of Investment in Associate Total 235 Nil 235 100 (276) (265) Nil Nil (276) (265) (100) (100) Nil Nil (45) 45 1,213 (1,213) 100 (100) (306) 1,168 (1,474) (126) investments Reversal of Impairment of Non-Current Investments and related obligation Your Company holds in Adjaristsqali Netherlands B.V. (ABV) (a joint venture of the Company operating 187 MW hydro power plant in Georgia) through intermediate holding company TPIPL. During the year, your Company performed the impairment assessment and recognised a reversal of ` 235 crore in impairment charge mainly on account of change in assumptions due to signing of PPA and renegotiating interest rates with lenders. Standby Litigation In respect to the Standby Charges dispute with Adani Electricity Mumbai Limited (Adani Electricity) erstwhile Reliance Infrastructure Limited (R-Infra) for the period from 1st April 1999 to 31st March 2004, the Appellate Tribunal of Electricity (ATE) set aside the MERC Order dated 31st May 2004 and directed your Company to refund ` 354 crore (including interest of ` 15 crore) to Adani Electricity as on 31st March 2004, and pay interest at 10% per annum thereafter. During the year, the Supreme 194 Court (SC) has upheld Appellate Tribunal for Electricity’s order directing the Company to pay ` 354 crore along with interest. Consequently, the Company has recognised an expense of ` 276 crore net of amount recoverable from customers including adjustment with consumer reserves. Remeasurement of Deferred Tax Recoverable as per New Tax Regime Pursuant to the Taxation Laws (Amendment) Act, 2019, which is effective from 1st April 2019, domestic companies have an option to pay income tax at 22% plus applicable surcharge and cess (‘new tax regime’) subject to certain conditions. Based on your Company’s assessment of the expected year of transition to the new tax regime at each entity level, where the new tax regime is applicable, your Company has remeasured the deferred tax liabilities and also reassessed the recoverability of Minimum Alternate Tax (‘MAT’) credit. Based on the above, your Company has also remeasured its regulatory asset balance against deferred tax liabilities and has recognised expense of ` 265 crore (` 98 crore for distribution business and ` 167 crore for generation and transmission business). Gain on sale of Investment in Joint Venture During the year, your Company has sold its investment in Cennergi to Exxaro on 31st March 2020 for a consideration of ` 737 crore and recognised gain on sale of investment amounting to ` 533 crore. Further, your Company has hedged its receivable against the consideration to be received, fair value gain on the hedge instrument of ` 105 crore has been recognised as Other Income. Exceptional Items- Discontinued Operation (Strategic Engineering Division) (` in crore) Particulars FY20 FY19 Change % Change Impairment Loss on Remeasurement to Fair Value (361) Nil (361) (100) In the earlier year, your Company has approved sale of its Strategic Engineering Division (SED) to Tata Advanced Systems Limited (TASL), subject to regulatory approvals, at an enterprise value of ` 2,230 crore (including contingent consideration of ` 1,190 crore) subject to certain adjustments as specified in the scheme. During the year, your Company has reassessed the fair value of contingent consideration and has recognised an impairment loss of ` 361 crore. The Tata Power Company Limited Integrated Annual Report 2019-20 Tax Expenses Particulars Current Tax Deferred Tax Deferred Tax relating to earlier Year Remeasurement of deferred tax on account of new tax regime (net) (` in crore) FY20 FY19 Change % Change 19 73 (25) 111 332 10 (92) (259) (35) (83) (78) (350) Non-Current Investments have increased mainly due to reclassification of Tata Project Investment from Assets held for sale, reversal of Georgia impairment provision offset by lower statutory investments in Government Securities. Current Investments (` in crore) (275) Nil (275) (100) Particulars FY20 FY19 Change % Change Total (208) 453 (661) (146) Mutual Funds (Unquoted) In FY20, lower current tax on account of lower operating profit, reduced MAT rate and increase in exceptional expenses relating to standby litigation. Previous year had exceptional reversal of DTA on sale of asset. Pursuant to the Taxation Laws (Amendment) Act, 2019 which is effective from 1st April 2019, domestic companies have an option to pay income tax at 22% plus applicable surcharge and cess (‘new tax regime’) subject to certain conditions. Based on your Company’s assessment of the expected year of transition to the new tax regime at each entity level, where the new tax regime is applicable, it has remeasured the deferred tax liabilities and also reassessed the recoverability of Minimum Alternate Tax (‘MAT’) credit. Accordingly, your Company has recognised deferred tax income of ` 275 crore after adjusting the MAT credit write off. Property, Plant and Equipment, Investment Property & Intangible Assets (` in crore) Particulars FY20 FY19 Change % Change Property, plant and equipment Intangible Assets Capital Work-in-Progress Total 7,974 7,546 428 6 62 403 84 368 (22) 35 8,439 7,998 441 (26) 10 6 The above assets capitalisation amortisation for FY20. increased mainly due to higher and depreciation the offset by Non-Current Investments (` in crore) Particulars FY20 FY19 Change % Change Investment in Subsidiary, JV and Associate Statutory Investments Others Total 20,743 20,477 266 1 168 416 374 420 21,327 21,271 (206) (4) 56 (55) (1) 0.3 Deferred Tax Liability Fund Investment Total Nil 20 20 42 Nil 42 (42) (100) 20 (22) 100 (52) Investments are Current to reclassification from current to non-current offset by the higher investment in mutual funds during the year. lower mainly due Trade Receivables Particulars Non-current Current Total (` in crore) FY20 FY19 Change % Change Nil 186 1,109 1,256 1,109 1,442 (186) (147) (333) (100) (12) (23) Decrease in Trade Receivables is mainly due to recovery of dues from BEST in the Mumbai operation area and final settlement of standby order. Loans Particulars Non-current Current Total (` in crore) FY20 FY19 Change % Change 42 550 51 119 592 170 (9) 431 422 (18) 362 248 Increase in loans was mainly due to higher Inter-Corporate loans given to related parties. Finance Lease Receivable Particulars Non-current Current Total (` in crore) FY20 FY19 Change % Change 553 32 585 554 38 592 (1) (6) (7) NIL (16) (1) Finance Lease Receivable reduced due to recovery of lease rentals during the year. 195 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices Management Discussion & Analysis Other Financial Assets Particulars Non-current Current Total (` in crore) FY20 FY19 Change 223 236 459 3 96 99 220 140 360 % Change 7,333 146 363 Other Financial Assets increased mainly due to higher advance to the Orissa Electricity Regulatory Commission towards Equity for the distribution license, which your Company won during the year, lease money receivable from Jojobera and receivable from consumers. Other Assets Particulars Non-current Current Total (` in crore) FY19 Change % Change 977 952 33 (806) (773) 3 (85) (40) FY20 1,010 146 1,156 1,929 Non-Current Assets increased mainly due to increase in recoverable from consumers offset by decrease in security deposit due to settlement of standby litigation and reclassification of unamortised premium on leasehold land to right of use assets as per Ind-AS 116. Current Assets decreased mainly due to decrease in recoverable from consumers. Assets Classified as Held for Sale Particulars Land Building Investments Loan and other receivables (including interest accrued) Transmission Lines Assets of Discontinued Operations (` in crore) FY20 FY19 Change % Change 302 9 299 23 310 14 399 19 128 Nil 1,880 2,064 (8) (5) (100) 4 128 (184) (3) (36) (25) 21 100 (9) Total 2,641 2,806 (165) (6) Assets held for sale has reduced during the year mainly due to impairment of SED and reclassification of Tata Projects Investment offset by inclusion of Vikhroli Project under held for sale as your Company lost the bid for project. 196 Regulatory Deferral Account – Asset/ (Liability) (` in crore) Particulars FY20 FY19 Change % Change Regulatory Deferral – Asset Less: Regulatory Deferral – Liability 258 Nil 999 Nil (741) NIL (74) NIL Total 258 999 (741) (74) Regulatory Deferral Asset (Net) pertains to regulatory receivables in the distribution business. The same has reduced on account of recovery during the year. Total Equity Particulars Equity Share Capital Unsecured Perpetual Securities Other Equity Total (` in crore) FY20 FY19 Change 271 271 1,500 1,500 Nil Nil 13,491 13,919 15,262 15,690 (428) (428) % Change Nil Nil (3) (3) Total Equity of the your Company decreased due to dividend pay-out, which increased with profits of the year. Non-Current Borrowings Particulars Secured Loans Unsecured Loans Total (` in crore) FY20 4,910 4,915 FY19 Change 4,896 3,854 14 1,061 9,825 8,750 1,075 % Change 0.3 28 12 Non-current borrowings increased mainly due to issue of Non-Convertible Debentures partially offset by repayment of term loans from the bank. Current Borrowings Particulars Secured Loans Unsecured Loans Total (` in crore) FY20 FY19 Change % Change 60 Nil 60 100 6,152 6,732 6,212 6,732 (580) (520) (9) (8) Current Borrowings decreased mainly due to redemption of Commercial Papers, repayment of term loans payables on demand offset by higher Bank Overdraft. The Tata Power Company Limited Integrated Annual Report 2019-20 Lease Liability Particulars Non-current Current Total (` in crore) FY20 FY19 Change 237 42 279 Nil Nil Nil 237 42 279 % Change 100 100 100 During the year, your Company has recognised Lease Liability based on the requirement of the Ind-AS 116. Trade Payables Particulars Non-current Current Total (` in crore) FY20 FY19 Change % Change Nil 23 (23) (100) 1,002 1,102 1,002 1,125 (100) (123) (9) (11) Trade payables decreased due to payment to the vendor as per the payment terms. Other Financial Liabilities Particulars Non-current Current Total (` in crore) FY20 FY19 Change 15 43 2,622 2,895 2,637 2,938 (28) (273) (301) % Change (65) (9) (10) Other Financial Liabilities decreased mainly due to reduction in current maturity of non-current borrowings & lower financial guarantee obligation. Other Liabilities Particulars Non-current Current Total (` in crore) FY20 FY19 Change 161 503 664 184 849 1,033 (23) (346) (369) % Change (13) (41) (36) Other Liabilities decreased mainly due to reduction in statutory consumers reserves offset by higher liability towards consumers. Provisions Particulars Non-current Current Total (` in crore) FY20 FY19 Change 222 62 284 196 15 211 26 47 74 % Change 13 313 35 Provision for FY20 is higher due to compensated absences and other defined benefit plans. Liabilities Directly Associated With Assets Classified as Held for Sale (` in crore) FY19 Change % Change Particulars Liabilities classified as held for sale FY20 1,036 966 Total 1,036 966 70 70 7 7 The liabilities increased mainly due to liabilities of SED ‘Discontinued Operations’, and business classified as accordingly, assets and liabilities were classified as held for sale. 5. Financial Performance – Consolidated Particulars Total Income* Depreciation & Amortisation Expenses Finance Costs Exceptional Item Profit Before Taxes Profit for the year (` in crore) FY20 FY19 Change 29,510 30,370 2,634 2,393 (860) 241 4,494 226 2,368 4,170 1,746 3,819 324 (1,520) (1,451) 1,316 2,606 (1,290) % Change (3) 10 7 (87) (38) (49) *Includes Regulatory Income/(Expenses) y Total Income decreased primarily on account of lower revenue in Tata Power, TPTCL, TPDDL and MPL. y Depreciation increased marginally with increased capitalisation and assets recognised as right of use as per Ind-AS 116. y Finance costs were higher mainly due to interest component on lease liability in CGPL and Trust Energy as per Ind-AS 116. y Exceptional items in FY20 included gain on sale of investments in Cennergi and reversal of impairments, offset by Remeasurement of Deferred Tax Recoverable and regulatory deferral balance on account of New Tax Regime. y Exceptional items in FY19 included gain on sale of investments in (Tata Communications Limited and Panatone Finvest Limited) offset by provision for contingencies related to entry tax provision and impairment of plant, property and equipment in the Rithala plant. 197 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices Management Discussion & Analysis Property, Plant and Equipment, Investment Property & Intangible Assets Trade Receivables (` in crore) Particulars FY20 FY19 Change % Change Property, plant and equipment Intangible Assets Capital Work-in-Progress Total 44,663 41,102 3,561 9 1,362 1,612 1,562 2,576 (200) (964) 47,637 45,240 2,397 (13) (38) 5 The above assets increased mainly on account of higher capitalisation in Tata Power, TPREL, TPDDL, MPL, reclassification of operating lease to right of use as per Ind-AS 116 offset by depreciation and amortisation for FY20 and assets reclassified as held for sale. Goodwill Particulars Goodwill (` in crore) FY20 FY19 Change % Change 1,642 1,642 Nil Nil Particulars Non-current Current Total (` in crore) FY20 FY19 Change 30 193 4,426 4,445 4,456 4,638 (163) (19) (182) % Change (84) (1) (4) Decrease in Trade Receivables was mainly due to decrease in receivables in Tata Power, CGPL and MPL offset by increase in receivables in TPSSL, TPTCL, WREL and TPREL. Loans Particulars Non-current Current Total (` in crore) FY20 FY19 Change % Change 81 33 91 87 114 178 (10) (54) (64) (11) (62) (36) Decrease loans in TPIPL. in Loans is mainly due to repayment of There is no change in goodwill during the year. Finance Lease Receivable Non-Current Investments (` in crore) Particulars FY20 FY19 Change % Change Investments in Joint Ventures & Associates Statutory Investments Others Total 13,203 12,513 690 6 168 465 374 487 13,836 13,374 (206) (22) 462 (55) (5) 5 Increase in Non-Current Investments was mainly due to increase in investments in Resurgent for acquisition of PPGCL, profit from joint ventures for the year net of dividend received and reclassification of Tata Projects Limited to investment from assets held for sale. Current Investments (` in crore) Particulars FY20 FY19 Change % Change Statutory Investments Investments in Mutual Funds Total Nil 700 700 42 125 167 (42) (100) 575 533 460 319 Increase in current Investments was mainly on account of increase in mutual fund investments in Af-Taab Investment Company Limited, MPL, TPDDL, TPREL and Tata Power, offset by decrease in statutory investments in Tata Power. 198 Particulars Non-current Current Total (` in crore) FY20 FY19 Change % Change 589 33 622 566 38 604 23 (5) 18 4 (12) 3 Finance Lease Receivable increased due to reduction in unearned finance income during the year. Other Financial Assets Particulars Non-current Current Total (` in crore) FY20 FY19 Change 579 1,412 1,991 317 242 559 262 1,170 1,432 % Change 83 483 256 Other Financial Assets increased mainly due to receivables on sale of investment in Cennergi, increase in fair valuation gain on derivative contracts and other advances. Other Assets Particulars Non-current Current Total (` in crore) FY20 1,185 770 FY19 Change 1,358 1,882 (173) (1,112) 1,955 3,240 (1,285) % Change (13) (59) (40) Other Assets decreased mainly due to decrease in recoverable from consumers in Tata Power and MPL, The Tata Power Company Limited Integrated Annual Report 2019-20 reclassification of unamortised premium on leasehold land to right of use assets as per Ind-AS 116, decrease in security deposit in Tata Power on account of settlement of standby dispute and decrease in power banking receivables of TPDDL. Assets Classified as Held for Sale Particulars FY20 FY19 Change % Change (` in crore) Trade Payables Particulars Non-current Current Total (` in crore) FY20 FY19 Change % Change Nil 23 (23) (100) 5,095 5,481 5,095 5,504 (386) (409) (7) (7) Trade Payables decreased mainly TPSSL and CGPL. in Tata Power, Assets classified as held for sale 6,253 5,103 1,150 23 Other Financial Liabilities Increase in the above assets is mainly due to reclassification of shipping assets in Trust Energy as held for sale offset by the reclassification of Tata Projects Limited to Investment. Total Equity Particulars Equity Share Capital Unsecured Perpetual Securities Other Equity Total (` in crore) FY20 FY19 Change 271 271 1,500 1,500 NIL NIL 17,796 16,535 1,261 19,567 18,306 1,261 % Change NIL NIL 7 7 The equity of your Company increased by 7% during the year on account of profits for the year, net of distribution on perpetual securities and dividend pay-out. Non-Current Borrowings Particulars Secured Loans Unsecured Loans Total (` in crore) FY20 FY19 Change 21,084 20,085 11,612 11,055 999 557 32,696 31,140 1,556 % Change 5 5 5 Non-Current Borrowings increased mainly due to increase in loan in Tata Power, TPREL, TPDDL and CGPL partially offset by reduction in loan in MPL and WREL. Current Borrowings Particulars Secured Loans Unsecured Loans Total (` in crore) FY20 1,075 FY19 Change 896 179 10,770 12,980 (2,210) 11,845 13,876 (2,031) % Change 20 (17) (15) Current Borrowings decreased mainly due to decrease of loan in Tata Power, Bhira, CGPL, MPL, TPTCL and TPSSL offset by increase in TPREL, Trust Energy and WREL. Particulars Non-current Current Total (` in crore) FY20 FY19 Change 722 687 35 7,503 6,481 1,022 8,225 7,168 1,057 % Change 5 16 15 Other Financial Liabilities increased due to increase in current maturities of long-term debts and advance received for sale of investment in Bhira and Trust Energy. Other Liabilities Particulars Non-current Current Total (` in crore) FY19 Change % Change FY20 2,085 1,453 1,874 1,500 3,538 3,374 211 (47) 164 11 (3) 5 Other Liabilities increased mainly due to increase in deferred revenue liability as per Ind AS-115 and increase in Deferred Revenue towards Service line contribution from consumers. Refer Notes to the Consolidated Statements for the restatements. Ind AS Financial 199 OverviewOur Emphasis on ValueOur Value‑creation ParadigmStatutory ReportsFinancial StatementsFuture ready for smart choices Report On Corporate Governance “The Tata philosophy of management has always been, and is today more than ever, that corporate enterprises must be managed not merely in the interests of their owners, but equally in those of their employees, of the consumers of their products, of the local community and finally the country as a whole.” Company’s Philosophy on Corporate Governance The essence of Corporate Governance is about maintaining the right balance between economic, social, individual and community goals. At Tata Power, good corporate governance is a way of life and the way we do our business, encompassing every day’s activities and is enshrined as a part of our way of working. The Company is focused on enhancement of long- term value creation for all stakeholders without compromising on integrity, societal obligations, environment and regulatory compliances. Our actions are governed by our values and principles, which are reinforced at all levels of the organisation. These principles have been and will continue to be our guiding force in future. For your Company, good corporate governance is a synonym for sound management, transparency and adequate disclosure, encompassing good corporate practices, procedures, standards and implicit rules which propel a company to take sound decisions. As a Company with a strong sense of values and commitment, Tata Power believes that profitability must go hand in hand with a sense of responsibility towards all stakeholders. This is an integral part of Tata Power’s business philosophy. The cardinal principles such as independence, accountability, responsibility, transparency, trusteeship and disclosure serve as means for implementing the philosophy of Corporate Governance. - Jamsetji N. Tata This philosophy is reflected and practised through the Tata Code of Conduct (TCoC), the Tata Business Excellence Model and the Tata Code of Conduct for Prevention of Insider Trading and Code of Corporate Disclosure Practices. Further, these codes allow the Board to make decisions that are independent of the management. The Company is committed to focus its energies and resources in creating and positively leveraging shareholders’ wealth and, at the same time, safeguarding the interests of all stakeholders. This is our path to sustainable and profitable existence and growth. The Company has adopted Governance Guidelines to help fulfil its corporate responsibility towards its stakeholders. The Governance Guidelines cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, director’s term, retirement age and committees of the Board. It also covers aspects relating to nomination, appointment, induction of directors, director’s remuneration, subsidiary oversight, Board effectiveness review. The Company is in compliance with the requirements stipulated under Regulation 17 to 27 read with Schedule V and clauses (b) to (i) of sub-regulation (2) of Regulation 46 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), as amended from time to time, including relaxations granted by the Ministry of Corporate Affairs (MCA) and the Securities and Exchange Board of India (SEBI) from time to time on account of the COVID-19 pandemic, with regard to corporate governance. The various material aspects of corporate governance and the Company’s approach to them are discussed in the table below: Material Aspect Avoidance of conflict of interest Board independence and minority shareholders’ interests Values, Ethics and compliance Company’s Approach Table 1 Chairmanship of the Board is a non-executive position and separate from that of the Chief Executive Officer and Managing Director (CEO & Managing Director). The Code of Conduct for Non-Executive Directors (NEDs), and for Independent Directors (IDs), carries explicit clauses covering avoidance of conflict of interest. Likewise, there are explicit clauses in the TCoC prohibiting any employee - including the Managing Director (MD) and Executive Directors (EDs) - from accepting any position of responsibility, with or without remuneration, with any other organisation without Company’s prior written approval. For MD and EDs, such approval must be obtained from the Board. The TCoC, which defines the governance philosophy at Tata Power, emphasizes fairness and transparency to all stakeholders. Shareholders can communicate any grievance to the Company Secretary’s office through a well-publicized channel, where complaints are tracked to closure. The Stakeholders’ Relationship Committee oversees the redressal of these complaints. The Annual General Meeting (AGM) is another forum where they can interact with the Board. Tata Power consistently adheres to the highest principled conduct and has earned its reputation for trust and integrity in the course of building a highly successful global business. The Company’s core values are SCALE viz. Safety, Care, Agility, Learning and Ethics. TCoC, which every employee signs at the time of joining the Company, serves as a moral guide and a governing framework for responsible corporate citizenship. Periodic refresher courses are conducted to ensure continued awareness of the code, and employee communications from the leadership reiterate the importance of our values and the TCoC. Customers and suppliers are made aware of the TCoC principles in contract discussions, and through inclusion of specific clauses in proposals and contracts. The Tata Power Supplier Code of Conduct is shared with suppliers as part of the procurement process and is published on the Tata Power website. Changes to legislation are closely monitored, risks are evaluated and effectively managed across our operations. Avenues have been provided for all employees and stakeholders to report concerns or non-compliance which are investigated and addressed by following due process. At the apex level, the Audit Committee oversees compliance to internal policies and external regulations. 200 Report on Corporate GovernanceThe Tata Power Company Limited Integrated Annual Report 2019-20 Material Aspect Company’s Approach Succession planning Succession planning is an integral part of the operations of the Company. Succession planning of senior management is reviewed by the Board. Business and Unit Heads are invited to present on specific topics at Board meetings from time to time, offering an opportunity for the Directors to assess their values, competencies and capabilities. Board of Directors i. The Board is the focal point and custodian of corporate governance for the Company. The Company recognizes and embraces the benefits of having a diverse Board and sees increasing diversity at Board level as an essential element in maintaining a competitive advantage. A truly diverse Board will include and make good use of differences in the skills, regional and industry experience, background, gender and other distinctions between directors. These differences will be considered in determining the optimum composition of the Board and when possible, will be balanced appropriately. ii. The size and composition of the Board as on 31st March 2020 is as under: Table 2 Size and composition of the Board 50 5 30 3 10 1 Independent, Non-Executive (including 2 Women Directors) Nominee Director Non-Independent Non-Executive % to total number of Directors Number of Directors 10 1 Executive As on 31st March 2020, the Company has 10 (ten) Directors. Out of 10, 5 (five) (i.e. 50%) are Independent, Non-Executive, 4 (four) (i.e. 40%) are Non-Independent, Non-Executive (including a Nominee Director) and 1 (one) (i.e. 10%) is Executive. None of the Directors held Directorship in more than 7 (seven) listed companies. Further, none of the IDs of the Company served as an ID in more than 7 (seven) listed companies. None of the IDs serving as a whole-time director/managing director in any listed entity serves as an ID of more than 3 (three) listed entities. None of the Directors held directorship in more than 20 (twenty) Indian companies, with not more than 10 (ten) public limited companies. None of the Directors is a member of more than ten committees or chairperson of more than five committees across all the public limited companies in which he/she is a Director. All IDs of the Company have been appointed as per the provisions of the Companies Act, 2013 (the Act) and Listing Regulations. Formal letters of appointment have been issued to the IDs. The Chairman of the Company is a NED and not related to the CEO & Managing Director. iii. The composition of the Board is in compliance with the requirements of the Act and Regulation 17 of the Listing Regulations. The profile of the Directors can be accessed on our website at https://www.tatapower.com/corporate/board-of-directors.aspx. iv. Four Board meetings were held during the year under review and the gap between two meetings did not exceed 120 days. The said Meetings were held on 2nd May 2019, 1st August 2019, 8th November 2019 and 29th January 2020. v. Audio Visual conferencing facilities are used to facilitate directors travelling or present at other locations, to participate in meetings. 201 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm vi. There are no inter-se relationships between the Board members. The Company has not issued any convertible instruments. vii. The details of each member of the Board during the year ended as on 31st March 2020 and their attendance at Board Meetings and the last AGM are provided hereunder: Sl. No. Name of the Director Category of Directorship 1. Mr. N. Chandrasekaran, Chairman DIN: 00121863 Non-Independent, Non-Executive Number of Board Meetings attended during FY20 4 Whether attended last AGM held on 18th June 2019 Yes No. of other Directorships* No. of Committee positions held** Member Chair- person Member Chair- person Table 3 No. of shares held in the Company Directorship in other listed entities (category of directorship) 5 0 0 0 2,00,000 Tata Consultancy Services Limited (Non-Independent, Non-Executive) Tata Steel Limited (Non-Independent, Non-Executive) Tata Motors Limited (Non-Independent, Non-Executive) The Indian Hotels Company Limited (Non-Independent, Non-Executive) Tata Consumer Products Limited (Formerly known as ‘Tata Global Beverages Limited’) (Non-Independent, Non-Executive) NA NA Apollo Tyres Limited (Independent, Non-Executive) Voltas Limited (Independent, Non-Executive) Bata India Limited (Independent, Non-Executive) Siemens Limited (Independent, Non-Executive) Tata Power Renewable Energy Limited (Debt listed) (Independent, Non-Executive) HDFC Life Insurance Company Limited (CEO & Managing Director) 16,262 (As a joint holder) HDFC Asset Management Company Limited (Independent, Non-Executive) S Chand and Company Limited (Independent, Non-Executive) Walwhan Renewable Energy Limited (Debt listed) (Independent, Non-Executive) Tata Power Renewable Energy Limited (Debt listed) (Independent, Non-Executive) Yes Yes NA NA NA NA NA NA NA NA NA NA Yes 0 7 0 4 Nil Yes Yes 0 0 3 6 1 5 2 4 Nil 2. Mr. Nawshir H. Mirza# DIN: 00044816 3. Mr. Deepak M. Satwalekar$ DIN: 00009627 4. Ms. Anjali Bansal DIN: 00207746 Independent, Non-Executive Independent, Non-Executive Independent, Non-Executive 5. Ms. Vibha Padalkar DIN: 01682810 Independent, Non-Executive 6. Mr. Sanjay V. Bhandarkar DIN: 01260274 Independent, Non-Executive 2 2 4 4 4 202 Report on Corporate GovernanceThe Tata Power Company Limited Integrated Annual Report 2019-20 Sl. No. Name of the Director Category of Directorship Number of Board Meetings attended during FY20 Whether attended last AGM held on 18th June 2019 No. of other Directorships* No. of Committee positions held** Member No. of shares held in the Company Directorship in other listed entities (category of directorship) Member Chair- person Chair- person 0 0 No Yes 4 6 0 4 3 2 Nil Nil 7. Mr. K. M. Chandrasekhar DIN: 06466854 Independent, Non-Executive 8. Mr. Ashok Sinha@ DIN: 00070477 Independent, Non-Executive 9. Mr. Hemant Bhargava (Nominee of Life Insurance Corporation of India (LIC) as an equity investor) DIN: 01922717 10. Mr. Saurabh Agrawal DIN: 02144558 Non-Independent Non-Executive Non-Independent Non-Executive 11. Mr. Banmali Agrawala DIN: 00120029 12. Mr. Praveer Sinha&, CEO & Managing Director DIN: 01785164 Non-Independent Non-Executive Executive 4 3 3 4 3 4 No 0 3 0 1 Nil Yes 4 2 0 2 Nil Yes Yes 4 4 1 0 1 0 0 0 Nil Nil Coastal Gujarat Power Limited (Debt listed) (Independent, Non-Executive) Cipla Limited (Independent, Non-Executive) J. K. Cement Limited (Independent, Non-Executive) Coastal Gujarat Power Limited (Debt listed) (Independent, Non-Executive) Maithon Power Limited (Debt listed) (Independent, Non-Executive) Voltas Limited (Nominee Director) Larsen & Toubro Limited (Nominee Director) ITC Limited (Nominee Director) Tata Steel Limited (Non-Independent, Non-Executive) Tata AIG General Insurance Company Limited (Debt listed) (Non-Independent, Non-Executive) Nil Tata Power Renewable Energy Limited (Debt listed) (Non-Independent, Non-Executive) NA 13. Mr. Ashok S. Sethi^, COO & Executive Director DIN: 01741911 Executive NA NA NA NA NA NA NA * ** # $ @ & ^ Excludes directorship in the Company, private companies, foreign companies and companies under Section 8 of the Act. Pertains to memberships/chairpersonships of the Audit Committee and Stakeholders' Relationship Committee of Indian public companies (excluding the Company) as per Regulation 26(1)(b) of the Listing Regulations. Consequent upon the completion of his term as an ID, Mr. Mirza ceased to be a Director effective 12th August 2019. Consequent upon the completion of his term as an ID, Mr. Satwalekar ceased to be a Director effective 12th August 2019. Appointed as an Additional and Independent Director effective 2nd May 2019. His appointment was approved by the Members at the AGM held on 18th June 2019. Mr. Praveer Sinha, CEO & Managing Director is not an ID of any other listed company. Mr. Ashok S. Sethi superannuated as COO & Executive Director of the Company effective 30th April 2019. viii. Necessary disclosures regarding committee positions in other public companies as on 31st March 2020 have been made by the Directors. ix. IDs are NEDs as defined under Regulation 16(1)(b) of the Listing Regulations read with Section 149(6) of the Act along with rules framed thereunder. In terms of Regulation 25(8) of the Listing Regulations, they have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties. Based on the declarations received from the IDs, the Board of Directors has confirmed that they meet the criteria of independence as mentioned under Regulation 16(1)(b) of the Listing Regulations and that they are independent of the management. Further, declaration on compliance with Rule 6(3) of the Companies (Appointment and Qualifications of Directors) Rules, 2014 as amended by MCA Notification dated 22nd October 2019 regarding the 203 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm requirement relating to the enrolment in the Data Bank created by MCA for IDs, has been received from all the IDs. disclosure. The Board periodically evaluates the need for change in its composition and size. x. Skills/expertise/competencies of the Board of Directors The Board is satisfied that the current composition reflects a mix of knowledge, skills, experience, diversity and independence. The Board provides leadership, strategic guidance, objective and an independent view to the Company’s management while discharging its fiduciary responsibilities, thereby ensuring that the management adheres to high standards of ethics, transparency and The Company requires skills/expertise/competencies in the areas of strategy, finance, leadership, technology, governance, mergers and acquisitions, human resources, etc. to efficiently carry on its core businesses such as generation, distribution and transmission of thermal/ renewables/hydro power, power trading, solar photovoltaic engineering, (PV) manufacturing procurement and construction (EPC) services, coal mines and logistics. associated and The Board has identified the following skills/expertise/competencies fundamental for the effective functioning of the Company which are currently available with the Board: Name of the Director Area of skills/expertise/competence Strategy Finance Leadership Technical HR Governance M&A Mr. N. Chandrasekaran Ms. Anjali Bansal Ms. Vibha Padalkar Mr. Sanjay V. Bhandarkar Mr. K. M. Chandrasekhar Mr. Ashok Sinha Mr. Hemant Bhargava Mr. Saurabh Agrawal Mr. Banmali Agrawala Mr. Praveer Sinha √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ - - √ √ √ √ √ √ √ √ √ √ √ - - - - √ - - √ √ √ √ √ - √ √ √ - √ √ √ √ √ √ √ √ √ √ √ √ √ - √ √ - √ √ √ - √ xi. Changes in Board composition Changes in board composition during FY20 are tabled hereunder: Name of the Director Sl. No. Nature of change 1. Mr. Ashok S. Sethi Superannuated as COO & Executive Director of the Company 2. Mr. Ashok Sinha Appointed as an Additional and Independent Director. His appointment was approved by the Members at the AGM held on 18th June 2019 Table 4 Government/ Regulatory √ - - - √ √ √ √ √ √ Table 5 Date of change 30th April 2019 2nd May 2019 3. Mr. Nawshir H. Mirza Consequent upon the completion of his term as an ID, Mr. Mirza ceased to be a Director. 12th August 2019 4. Mr. Deepak M. Satwalekar Consequent upon the completion of his term as an ID, Mr. Satwalekar ceased to be a Director. 12th August 2019 None of the IDs have resigned before the expiry of their respective tenures during FY20. xii. Term of Board membership xiii. Selection and appointment of new directors The Nomination and Remuneration Committee (NRC) determines the appropriate characteristics, skills and experience required for the Board as a whole and for individual members. Board members are expected to possess the required qualifications, integrity, expertise and experience for the position. They also possess expertise and insights in sectors/areas relevant to the Company and have ability to contribute to the Company’s growth. As per the existing Guidelines, the retirement age for MD/ EDs is 65 years, NEDs is 70 years and IDs is 75 years. The Board is responsible for the appointment of new directors. The Board has delegated the screening and selection process for new directors to the NRC. Considering the existing composition of the Board and requirement of new domain expertise, if any, the NRC reviews potential candidates. The assessment of members to the Board is based on a combination of criteria that include ethics, personal and professional stature, domain expertise, gender diversity and specific qualification required for the position. The potential Board member is also assessed on the basis 204 Report on Corporate GovernanceThe Tata Power Company Limited Integrated Annual Report 2019-20 of independence criteria defined in Section 149(6) of the Act read with rules framed thereunder and Regulation 16(1)(b) of the Listing Regulations. If the Board approves, the person is appointed as an Additional Director whose appointment is subject to the approval of the Members at the Company’s general meeting. xiv. Letter of appointment issued to Independent Directors The IDs on the Board of the Company are given a formal appointment letter inter alia containing the term of appointment, role, duties and responsibilities, time commitment, remuneration, insurance, code of conduct, training and development, performance evaluation process, disclosure, confidentiality, etc. The terms and conditions of appointment of IDs are available on the Company’s website at https://www.tatapower.com/ pdf/investor-relations/ Terms-& - conditions- of-IDs- appointment.pdf. xv. Information provided to the Board During FY20, information as mentioned in Part A of Schedule II of the Listing Regulations, has been placed before the Board for its consideration. xvi. Meeting of Independent Directors During the year under review, a separate meeting of the IDs was held on 18th March 2020. At the said meeting, the IDs reviewed the performance of the NEDs, of the Board as a whole and the Chairman, after considering the view of the ED and the NEDs. They also assessed the quality, quantity and timeliness of flow of information between the Company’s management and the Board. xvii. Details of familiarisation programmes for Directors including Independent Directors All Board members of the Company are accorded every opportunity to familiarize themselves with the Company, its management, its operations and above all, the Industry perspective and issues. They are made to interact with senior management personnel and proactively provided with relevant news, views and updates on the Company and sector. All the information/documents sought by them are also shared with them for enabling a good understanding of the Company, its various operations and the industry of which it is a part. Details of the familiarisation program on cumulative basis are available on the Company’s website at https://www. tatapower.com/pdf/investor-relations/familiarisation- programme-for-directors.pdf. xviii. Code of Conduct The Company has adopted the Code of Conduct for NEDs including IDs which provides for details as laid down in Schedule IV to the Act, as may be applicable. The Company has also adopted a Code of Conduct for all its employees including EDs. All Board members and senior management personnel have affirmed compliance with their respective Code of Conduct. The CEO & Managing Director has also confirmed and declared the same. The declaration is reproduced at the end of this Report and marked as Annexure I. xix. Tata Code of Conduct for Prevention of Insider Trading & Code of Corporate Disclosure Practices In accordance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time, the Board of Directors of the Company has adopted the Tata Code of Conduct for Prevention of Insider Trading and Code of Corporate Disclosure Practices (the Code). All the Promoters, Directors, Employees of the Company and its material subsidiaries, who are Designated Persons and their Immediate Relatives and other Connected Persons such as auditors, consultants, bankers, etc. who could have access to the unpublished price sensitive information of the Company, are governed under this Code. Mr. Ramesh N. Subramanyam, Chief Financial Officer (CFO) of the Company is the ‘Compliance Officer’ in terms of this Code. xx. Remuneration to Directors Details of remuneration to NEDs during and for the year under review: Sl. No. Name of the Director 1. Mr. N. Chandrasekaran$ Chairman 2. Mr. Nawshir H. Mirza^ 3. Mr. Deepak M. Satwalekar^ 4. Ms. Anjali Bansal 5. Ms. Vibha Padalkar 6. Mr. Sanjay V. Bhandarkar 7. Mr. K. M. Chandrasekhar 8. Mr. Ashok Sinha& 9. Mr. Hemant Bhargava@ 10. Mr. Saurabh Agrawal # 11. Mr. Banmali Agrawala # (Gross Amount in ₹) Table 6 Sitting Fees paid during FY20 Commission for FY20* 2,40,000 1,50,000 1,20,000 3,90,000 4,80,000 4,50,000 3,00,000 2,70,000 1,80,000 2,40,000 2,40,000 - 24,00,000 19,00,000 51,00,000 58,00,000 55,00,000 51,00,000 40,00,000 40,00,000 - - * Commission relates to the financial year ended 31st March 2020, which was approved by the Board on 19th May 2020, to be paid during FY21. $ As per the policy, Mr. N. Chandrasekaran has abstained from receiving commission from the Company. ^ Ceased to be Directors of the Company on account of completion of their term of appointment as IDs effective 12th August 2019. 205 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm & Appointed as an Additional and Independent Director effective 2nd May 2019. His appointment was approved by the Members at the AGM held on 18th June 2019. @ Sitting fees for attending meetings are paid to Mr. Bhargava and the Commission is paid to LIC. # In line with the internal guidelines, no payment is made towards Commission to Mr. Saurabh Agrawal and Mr. Banmali Agrawala, NEDs of the Company, who are in full-time employment with another Tata company. The NEDs are paid remuneration by way of Commission and Sitting Fees. The distribution of Commission amongst the NEDs is placed before the NRC and the Board. The Commission payment for the financial year ended 31st March 2020 was distributed based on the Company’s performance and keeping the attendance of Directors at Board and Committee meetings and their contribution at these meetings. None of the NEDs had any pecuniary relationship or transactions with the Company other than the Directors’ sitting fees and commission, as applicable, received by them. The Company reimburses the out-of-pocket expenses, if any, incurred by the Directors for attending meetings. Details of remuneration and perquisites paid to the CEO & Managing Director and COO & Executive Director during FY20: (Gross Amount in ₹) Table 7 Sl. No. Name of the Director Salary & allowances Commission for FY20@ Perquisites & Benefits Retirement Benefits Total 1. 2. Mr. Praveer Sinha CEO & Managing Director Mr. Ashok S. Sethi# COO & Executive Director Total 2,11,71,818 2,75,00,000 20,34,499 26,24,400 5,33,30,717 16,82,600 - 2,28,54,418 2,75,00,000 1,31,073 21,65,572 3,36,00,667 3,54,14,340 3,62,25,067 8,87,45,057 @ Commission (variable component) relates to the financial year ended 31st March 2020, which was approved by the Board on 19th May 2020, to be paid during FY21. # Mr. Sethi superannuated as COO & Executive Director of the Company effective 30th April 2019. Salient features of the agreement executed by the Company with CEO & Managing Director: Table 8 Terms of Agreement Period of appointment Remuneration Commission Incentive Remuneration Benefits, perquisites and allowances (excluding Company's contribution to Provident Fund, Superannuation, Gratuity, Leave Encashment) Notice period Severance fees Stock Option Mr. Praveer Sinha, CEO & Managing Director 01.05.2018 to 30.04.2023 Basic salary upto a maximum of ₹ 15,00,000 p.m. Within the limits stipulated under the Act. Not exceeding 200% of basic salary. As may be determined by the Board from time to time. The Agreement may be terminated by either party giving to the other party six months' notice or the Company paying six months' remuneration in lieu thereof. There is no separate provision for payment of severance fees. Nil Board Committees The Committees constituted by the Board focus on specific areas and take informed decisions within the framework designed by the Board and make specific recommendations to the Board on matters in their areas or purview. All decisions and the Committees are placed before the Board for information or for approval, if required. To enable better and more focused attention on the affairs of the Company, the Board has delegated particular matters to the Committees of the Board set up for the purpose. recommendations of The Board has seven committees as on 31st March 2020, comprising five statutory committees and two non-statutory committees that have been formed considering the needs of the Company. Details of the statutory and non-statutory committees are as follows: ❖ Statutory Committees The Board has the following statutory Committees as on 31st March 2020: • Audit Committee of Directors (AC) • Nomination and Remuneration Committee (NRC) 206 Report on Corporate GovernanceThe Tata Power Company Limited Integrated Annual Report 2019-20 • Corporate Social Responsibility Committee (CSR) • Stakeholders Relationship Committee (SRC) • Risk Management Committee (RMC) Audit Committee of Directors The Committee comprises the following as on 31st March 2020: • Mr. Ashok Sinha, Chairman • Ms. Vibha Padalkar • Mr. Sanjay V. Bhandarkar • Mr. Saurabh Agrawal • Ms. Anjali Bansal • Mr. K. M. Chandrasekhar All members are financially literate and bring in expertise in the fields of finance, accounting, development, strategy and management. The Committee met 5 times during the year under review. These meetings were held on 1st May 2019, 31st July 2019, 7th November 2019, 3rd December 2019 and 27th January 2020, with the requisite quorum. The attendance details of meetings of this Committee are as follows: Name of the Director Mr. Ashok Sinha* Mr. Nawshir H. Mirza@ Ms. Vibha Padalkar Mr. Sanjay V. Bhandarkar Mr. Saurabh Agrawal Ms. Anjali Bansal* Mr. K. M. Chandrasekhar* Table 9 No. of Meetings attended No. of Meetings held during tenure 3 2 5 5 5 3 3 3 2 5 5 4 3 3 * @ Appointed as the Members of the Committee effective 13th August 2019. Mr. Ashok Sinha was designated as the Chairman effective 13th August 2019. Consequent upon completion of his term as an ID, he ceased to be the Chairman and member of the Committee effective 12th August 2019. The CFO assists the Committee in discharge of its responsibilities. The Committee invites such employees or advisors as it considers appropriate to attend. The CFO, the head of internal audit and statutory auditors are generally invited to attend meetings unless the Committee considers otherwise. Quarterly Reports are sent to the members of the Committee on matters relating to the Insider Trading Code. The Company Secretary acts as the Secretary of the Committee. The Internal Auditors and Statutory Auditors of the Company discuss their audit findings and updates with the Committee and submit their views directly to the Committee. Separate discussions are held with the Internal Auditors to focus on compliance issues and to conduct detailed reviews of the processes and internal controls in the Company. The permissible non-audit related services undertaken by the Statutory Auditors are also pre-approved by the Committee. The Board has approved the Charter of the Audit Committee defining inter alia its composition, role, responsibilities, powers and processes. The terms of the Charter broadly include: • Oversee the processes that ensure the financial statements. integrity of • • • • • • • • • • • Oversee the adequacy and effectiveness of the processes and controls for compliance with laws and regulations. Oversee the adequacy and effectiveness of the process by which confidential or anonymous complaints or information regarding financial or commercial matters are received and acted upon. This includes the protection of whistle- blowers from victimization and the provision of access by whistle-blowers to the Chairman of the Committee. Approval/modification related parties. of the transactions with Enquiry into reasons for any default by the Company in honouring its obligations to its creditors and members. Oversee the quality of internal accounting controls and other controls. Oversee the system for storage (including back-up). Oversee the quality of the financial reporting process, including the selection of the most appropriate of permitted accounting policies. Ensure the independence of the auditor. Recommend remuneration of the auditors (including cost auditors). the appointment and the Board to Framing of rules for the hiring of any current or former employee of the audit firm. Scrutinize inter-corporate loans and investments. • Monitor the end use of funds raised through public offers. • • • • Conducting the valuation of any undertaking or asset of the Company. Oversee the internal audit function and approve the appointment of the Chief Internal Auditor. Bring to the notice of the Board any lacunae in the TCoC and the vigil mechanism (whistle blowing process) adopted by the Company. Reviewing with the CEO and the CFO of the Company the underlying process followed by them in their annual certification to the Board of Directors. • Approving the appointment of the CFO. 207 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm All the recommendations made by the AC during the year under review were accepted by the Board. Mr. Deepak Satwalekar, then Chairman of the NRC, was present at the last AGM held on 18th June 2019. Mr. Nawshir H. Mirza, then Chairman of the AC, was present at the last AGM held on 18th June 2019. Corporate Social Responsibility Committee The Committee comprises the following as on 31st March 2020: Nomination and Remuneration Committee The Committee comprises the following as on 31st March 2020: • Mr. Sanjay V. Bhandarkar, Chairman • Mr. N. Chandrasekaran • Ms. Vibha Padalkar The Committee met 4 times during the year under review. These meetings were held on 2nd May 2019, 3rd October 2019, 8th November 2019 and 18th March 2020 with the requisite quorum. • Ms. Anjali Bansal, Chairperson • Mr. K. M. Chandrasekhar • Mr. Praveer Sinha The Committee met twice during the year under review. These meetings were held on 23rd July 2019 and 7th November 2019 with the requisite quorum. The attendance details of meetings of this Committee are as follows: The attendance details of meetings of this Committee are as follows: Name of the Director Name of the Director Mr. Sanjay V. Bhandarkar * Mr. Deepak M. Satwalekar @ Mr. N. Chandrasekaran Ms. Vibha Padalkar* Ms. Anjali Bansal$ No. of Meetings held during tenure 3 1 4 3 1 Table 10 No. of Meetings attended 3 1 4 3 1 * Appointed as Members of the Committee effective 13th August 2019. Mr. Sanjay V. Bhandarkar was designated as the Chairman effective 13th August 2019. @ Consequent upon completion of his term as an ID, he ceased to be the Chairman and member of the Committee effective 12th August 2019. $ Consequent upon re-constitution of the Committee effective 13th August 2019, she ceased to be a member of the Committee. is responsible for In terms of the provisions of Section 178(3) of the Act and Regulation 19(4) read with Part D of Schedule II to the Listing Regulations, the Committee inter alia formulating the criteria for determining qualification, positive attributes and independence of a Director. The Committee is also responsible for recommending to the Board a policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees. The Board has adopted the Policy on Board Diversity & Director Attributes and Remuneration Policy for Directors, Key Managerial Personnel and other employees of the Company, which are attached as Annexures II and III respectively to the Board’s Report. The Company does not have any Employee Stock Option Scheme. The Board has also approved the Charter of the NRC defining its composition, powers, responsibilities, reporting, evaluation, etc. The terms of the Charter broadly include Board composition and succession planning, evaluation, remuneration, board development and review of HR Strategy, Philosophy and Practices. 208 Ms. Anjali Bansal Mr. Deepak M. Satwalekar * Mr. K. M. Chandrasekhar ** Mr. Praveer Sinha No. of Meetings held during tenure 2 1 1 2 Table 11 No. of Meetings attended 2 1 1 2 * Consequent upon completion of his term as an ID, he ceased to be a member of the Committee effective 12th August 2019. ** Appointed as a member of the Committee effective 13th August 2019. The Company has adopted a CSR policy which indicates the activities to be undertaken by the Company as specified in Schedule VII to the Act. The policy, including overview of projects or programs proposed to be undertaken, is provided on the Company’s website at https://www.tatapower.com/pdf/ aboutus/csr-policy-14.pdf. Brief Terms of Reference/Roles and Responsibilities: • • Formulate and recommend to the Board, a CSR Policy indicating the activities to be undertaken by the Company as specified in Schedule VII of the Act. Recommend the amount of expenditure to be incurred on the activities mentioned in the CSR Policy. • Monitor the CSR Policy. Ms. Anjali Bansal, Chairperson of the CSR Committee, was present at the last AGM held on 18th June 2019. Stakeholders Relationship Committee The Committee comprises the following as on 31st March 2020: • Mr. Banmali Agrawala, Chairman • Mr. Hemant Bhargava • Ms. Anjali Bansal The Committee met twice during the year under review. These meetings were held on 17th January 2020 and 11th March 2020 with the requisite quorum. Report on Corporate GovernanceThe Tata Power Company Limited Integrated Annual Report 2019-20 The attendance details of meetings of this Committee are as follows: • Carry out any other function as is referred by the Board from time to time or enforced by any statutory notification/ amendment or modification as may be applicable. Name of the Director Mr. Banmali Agrawala* Ms. Anjali Bansal** Mr. Sanjay V. Bhandarkar@ Mr. Hemant Bhargava# Mr. Ashok S. Sethi$ No. of Meetings held during tenure 2 2 NA 2 NA Table 12 No. of Meetings attended 2 2 NA 1 NA * Mr. Banmali Agrawala who was earlier a member of the Committee was designated as the Chairman effective 13th August 2019. ** Appointed as a member of the Committee effective 13th August 2019. @ Consequent upon re-constitution of the Committee effective 13th August 2019, he ceased to be a member of the Committee. # Appointed as a member of the Committee effective 2nd May 2019. $ Consequent upon his superannuation as COO & Executive Director of the Company effective 30th April 2019, he ceased to be a member of the Committee. The Committee specifically discharges duties of servicing and protecting the various aspects of interest of shareholders, debenture holders and other security holders. The Board has approved the Charter of the Committee defining its composition, powers, responsibilities, etc. The terms of the Charter broadly include: Review statutory compliances relating to all security holders. Resolve the grievances of all security holders. Oversee compliances in respect of dividend payments and transfer of unclaimed amounts to the Investor Education and Protection Fund. Oversee and review of all matters related to the transfer of securities of the Company. Name, designation and address of the Compliance Officer: Mr. H. M. Mistry, Company Secretary Bombay House, 24, Homi Mody Street, Mumbai 400 001 Tel: 022 6665 8282 In accordance with Regulation 6 of the Listing Regulations, the Board has appointed Mr. H. M. Mistry, Company Secretary as the Compliance Officer. He is authorised to approve share transfers/ transmissions, in addition to the powers with the members of the Committee. Share transfer formalities are regularly attended to and at least once a fortnight. All investor complaints which cannot be settled at the level of the Compliance Officer, are placed before the Committee for final settlement. The status of total number of complaints received during the year under review is as follows: Sl. No. A. B. Description Letters received from Statutory Bodies Securities & Exchange Board of India Stock Exchanges Depositories (NSDL/CDSL) Ministry of Corporate Affairs Consumer Forum Dividends Non-receipt of dividend/ interest warrants (pending reconciliation at the time of receipt of letters) Total Table 13 Total Received Replied Pending 17 2 1 0 0 0 20 16 2 1 0 0 0 19 1 0 0 0 0 0 1 Ensure setting of proper controls and oversight of performance of the Registrar and Share Transfer Agent (RTA). • For the 1 unresolved complaint received through the SEBI SCORES System (System), the Action Taken Report (ATR) has been uploaded on the System and the same is pending for closure as on 31st March 2020. share certificates • There were no pending transfers/demats as on 31st March 2020. Approve of the Company. issuance of duplicate Approve transmission of securities. Review movements structure of the Company. in shareholding and ownership Recommend measures for overall improvement of the quality of investor services. Conduct a Shareholder Satisfaction Survey to judge the level of satisfaction amongst shareholders. Suggest and drive implementation of various shareholder- friendly initiatives. Mr. Sanjay V. Bhandarkar, then Chairman of the SRC, was present at the last AGM held on 18th June 2019. Risk Management Committee The Committee comprises the following as on 31st March 2020: • Ms. Vibha Padalkar, Chairperson • Mr. Banmali Agrawala • Mr. Sanjay V. Bhandarkar • Mr. Hemant Bhargava • Mr. Ashok Sinha 209 • • • • • • • • • • • Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm The Committee met thrice during the year under review. These meetings were held on 9th July 2019, 13th December 2019 and 17th March 2020 with the requisite quorum. The attendance details of meetings of this Committee are as follows: Name of the Director Ms. Vibha Padalkar Mr. Nawshir H. Mirza* Mr. Sanjay V. Bhandarkar** Mr. K. M. Chandrasekhar@ Mr. Ashok Sinha** Mr. Hemant Bhargava** Mr. Banmali Agrawala Mr. Ashok S. Sethi# No. of Meetings held during tenure Table 14 No. of Meetings attended 3 1 2 1 2 2 3 3 1 2 1 2 2 3 NA NA * Consequent upon completion of his term as an ID effective 12th August 2019, he ceased to be a member of the Committee. ** Appointed as members of the Committee effective 13th August 2019. @ Consequent upon re-constitution of the Committee effective 13th August 2019, he ceased to be a member of the Committee. # Consequent upon his superannuation as COO & Executive Director of the Company effective 30th April 2019, he ceased to be a member of the Committee. The Board has adopted Risk Management Strategy Document which specifies the objective, benefits of Risk Management, Risk Management Policy, Risk Management Process, Risk Organization Structure, Risk Culture, etc. The Board has also approved the Charter of the committee defining its composition, powers, responsibilities, etc. The terms of the Charter broadly include: • Reviewing the Company’s risk governance structure, risk assessment and risk management practices and guidelines, policies and procedures for risk assessment and risk management including the risk management plan. • • Reviewing and approving Enterprise-wide Risk Management (ERM) framework. Review the alignment of the ERM framework with the strategy of the Company. • Monitor the Company’s risk appetite and strategy relating to key risks, including credit risk, liquidity and funding risk, market risk, cyber security risk, forex risk, commodity risk, product risk and reputational risk, as well as the guidelines, policies and processes for monitoring and mitigating such risks. • • • • • Oversee Company’s process and policies for determining risk tolerance and review management’s measurement and comparison of overall risk tolerance to established levels. Review and analyse risk exposure related to specific issues, concentrations and limit excesses, and provide oversight of risk across organisation. Review compliance with risk policies, monitor breaches / trigger trips of risk tolerance limits and direct action. Nurture a healthy and independent risk management function in the Company. Carry out any other function as is referred by the Board from time to time or enforced by any statutory notification/ amendment or modification as may be applicable. Ms. Vibha Padalkar, Chairperson of the RMC, was present at the last AGM held on 18th June 2019. ❖ Non-statutory Committees The Board has also constituted statutory Committees: (i) Executive Committee of the Board (ii) Committee of Directors the following non- Executive Committee of the Board The Committee comprises the following as on 31st March 2020: • Mr. N. Chandrasekaran, Chairman • Mr. Sanjay V. Bhandarkar • Mr. Praveer Sinha Notes: Consequent upon completion of his term as an ID effective 12th August 2019, Mr. Deepak M. Satwalekar ceased to be a member of the Committee. Consequent upon his superannuation as COO & Executive Director of the Company effective 30th April 2019, Mr. Ashok S. Sethi ceased to be a member of the Committee. Terms of Reference The Committee covers a detailed review of the following matters before they are presented to the Board: i) Business and strategy review. ii) Long-term financial projections and cash flows. iii) Capital and revenue budgets and capital expenditure programmes. iv) Acquisitions, divestments and business restructuring proposals. v) Any other item as may be decided by the Board. No Meeting was held during the year under review and the relevant matters from the above scope were discussed at various Board meetings held during the year with the intent to avail expertise of all the Board members. 210 Report on Corporate GovernanceThe Tata Power Company Limited Integrated Annual Report 2019-20 Committee of Directors The Committee comprises the following as on 31st March 2020: • Mr. Sanjay V. Bhandarkar, Chairman • Mr. Banmali Agrawala • Mr. Praveer Sinha Terms of Reference The role of this Committee is as follows: • • investments and Approve investment proposals to Tata Power group companies within overall Board approved framework. recommend Framing of Investment Guidelines outlining prudential norms for investing in Mutual Funds, Fixed Deposits, Inter-Corporate Deposits with approved corporates, Central and State Government securities and any subsequent amendments. • • • • • • Borrowings of the Company subject to outstanding facilities not exceeding an amount of ₹ 12,500 crore of term loans and ₹ 8,000 crore of working capital facilities. Create security on the assets of the Company to secure the borrowings of the Company subject to these being within the limit approved by the shareholders of the Company under Section 180(1)(a) of the Act. Issue of corporate guarantees to secure the borrowings of wholly owned subsidiaries / step-down subsidiaries of wholly owned subsidiaries of the Company. Change in authorised signatories for the existing borrowings including working capital facilities of the Company. Commitment to capex item exceeding ₹ 200 crore (within Board approved Annual Business Plan) in a financial year. Enter into any coal, fuel and freight contracts having tenure above 5 years. • Write off of receivables exceeding ₹ 10 crore in a financial year. • Claim settlement and dispute exceeding ₹ 25 crore per instance and ₹ 50 crore in aggregate in a financial year. • Waiver of delayed payment surcharge exceeding ₹ 50 crore in a financial year. General Body Meetings a) The details of the last three AGMs of the Company: • Modification/addition/deletion of authorised signatory list to give effect to investments within the Prudential Investment Norms. • • • • Reconstitution of the Boards of Trustees of The Tata Power Consolidated Provident Fund, The Tata Power Company Limited Staff Superannuation Fund and Tata Power Gratuity Fund. Change in operating instructions involving the Company’s bank accounts. Submit Request for Qualification for any project and authorise execution of all documents, including Powers of Attorney, in connection with the same. All other matters earlier delegated by the Board/ Committee thereof, to a Committee comprising the CEO & Managing Director and COO & Executive Director. No Meeting was held during the year under review but the relevant matters in the above scope were passed through circular resolutions and the same were noted at various Board meetings held during the year. Year ended Day, Date & Time Venue Special Resolutions passed 31st March 2019 31st March 2018 31st March 2017 Tuesday, 18th June 2019 at 3 p.m. (IST) Friday, 27th July 2018 at 3 p.m. (IST) Wednesday, 23rd August 2017 at 3 p.m. (IST) Birla Matushri Sabhagar, Sir Vithaldas Thackersey Marg, 19, New Marine Lines, Mumbai 400 020 • Nil • Private placement of Non-Convertible Debentures/ Bonds • Private placement of Non-Convertible Debentures/ Bonds Table 15 211 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm b) Extraordinary General Meeting: No extraordinary general meeting of the Members was held during FY20. c) Postal Ballot: (i) Details of special resolutions passed by postal ballot: During the year under review, no special resolution was passed by means of Postal Ballot. (ii) Details of Voting Pattern: Not Applicable (iii) Person who conducted the aforesaid postal ballot exercise: Not Applicable (iv) Whether any special resolution is proposed to be conducted through postal ballot: No (v) Procedure for Postal Ballot: In compliance with Regulation 44 of the Listing Regulations and Sections 108, 110 and other applicable provisions of the Act, read with applicable Rules, the Company provides an electronic voting facility to all its shareholders, to enable them to cast their votes electronically. The Company engages the services of National Securities Depository Limited (NSDL) for the purpose of providing e-voting facility to all its shareholders. The shareholders have the option to vote either by physical ballot or e-voting. The Company dispatches the postal ballot notices and forms along with self-addressed business reply envelope to its shareholders whose names appear on the Register of Members/ list of beneficiaries as on a cut-off date. The postal ballot notice is sent to the shareholders in electronic form to the e-mail IDs registered with the Depository Participants (DPs)/RTA. Voting rights are reckoned on the paid-up value of the shares registered in the names of the shareholders as on the cut-off date. Shareholders desiring to exercise their votes by physical postal ballot forms are requested to return the forms duly completed and signed, to the scrutinizer on or before the closing of the voting period. Shareholders desiring to exercise their votes by electronic mode are requested to vote before close of business hours on the last day of e-voting. The last date specified by the Company for receipt of duly completed postal ballot forms or e-voting is deemed to be the date of passing of the resolution. The scrutinizer submits his report to the Chairman of the Board of Directors or any person authorized by him, after the completion of scrutiny, and the consolidated results of the voting by postal ballot are then announced. The results are also displayed on the Company’s website, besides being communicated to the stock exchanges, depository and RTA. Means of Communication to the shareholders a) Calendar of financial year ended 31st March 2020 The Company follows April-March as the financial year. The meetings of Board of Directors for approval of quarterly financial results for the financial year ended 31st March 2020 were held on the following dates: Particulars Table 16 Date Quarter ended 30th June 2019 1st August 2019 Quarter/half-year ended 30th September 2019 8th November 2019 Quarter/ nine months ended 31st December 2019 29th January 2020 Quarter/ year ended 31st March 2020 19th May 2020 b) Quarterly, Half-yearly and Annual Results Quarterly, Half-yearly and Annual Results of the Company are published in widely circulated national newspapers, as per the details given below: Name of the Newspaper Indian Express - All editions Financial Express Region Ahmedabad, Vadodara, Mumbai, Chandigarh, New Delhi, Kolkata, Lucknow, Nagpur and Pune Mumbai, Pune, Ahmedabad, New Delhi, Lucknow, Chandigarh, Kolkata, Hyderabad, Bengaluru, Kochi and Chennai Loksatta - All editions Ahmednagar, Mumbai, Pune, Nagpur, Aurangabad and New Delhi Jam-e-Jamshed Weekly Mumbai Vyapar + Phulchhab Vyapar (Mumbai) and Phulchhab (Rajkot) Table 17 Language English English Marathi Gujarati Gujarati 212 Report on Corporate GovernanceThe Tata Power Company Limited Integrated Annual Report 2019-20 Post results, an Investor Conference call is held where members of the financial community are invited to participate in the Q&A session with the Company’s management. The key highlights are discussed and investor/analyst queries are resolved in this forum. The quarterly, half-yearly and annual financial results are also uploaded on the Company's website at https://www. tatapower.com/investor-relations/quarterly-results.aspx. c) Annual Reports and Annual General Meetings: The Annual Reports are emailed/posted to Members and others entitled to receive them. The Annual Reports are also available on the Company’s website at https:// www.tatapower.com/investor-relations/annual-reports- archive.aspx in a user-friendly downloadable form. The Company also provides live webcast facility of its AGM in co-ordination with NSDL. In line with the MCA Circular dated 5th May 2020 and SEBI Circular dated 12th May 2020, the Notice of the AGM along with the Annual Report 2019- 20 is being sent only through electronic mode to those Members whose e-mail addresses are registered with the Company/Depositories. d) News Releases, Presentations etc.: Official news releases, detailed presentations made to media, analysts, institutional investors, etc. are displayed on the Company’s website at https://www.tatapower.com/investor-relations/ analyst-presentation-archive.aspx. Official media releases, sent to the Stock Exchanges, are given directly to the press. e) Website: Comprehensive information about the Company, its business and operations, Press Releases and investor information can be viewed at the Company’s website at www.tatapower.com. The ‘Investor Relations’ section serves to inform the investors by providing key and timely information like financial results, annual reports, shareholding pattern, presentations made to analysts, etc. f) NSE Electronic Application Processing System (NEAPS) and BSE Online Portal: NSE has provided online platform NEAPS wherein the Company submits all the compliances/ disclosures to the Exchange in the SEBI prescribed format. Similar filings are made with BSE on their online Portal viz. BSE Corporate Compliance & Listing Centre. g) eXtensible Business Reporting Language (XBRL): XBRL is a standardized and structured way of communicating business and financial data in an electronic form. XBRL provides a language containing various definitions (tags) which uniquely represent the contents of each piece of financial statements or other kinds of compliance and business reports. BSE and NSE provide XBRL identical and based compliance reporting homogeneous compliance data structures between Stock Exchanges and MCA. XBRL filings are done on the NEAPS portal as well as the BSE online portal. featuring h) Web-based Query Redressal System: Members also have the facility of raising their queries/complaints on share related matters through an option provided on the Company’s website at https://www.tatapower.com/ investor-relations/investor-queries.aspx. i) System SEBI Complaints Redressal (SCORES): A centralised web-based complaints redressal system which serves as a centralised database of all complaints received, enables uploading of Action Taken Reports (ATRs) by the concerned company and online viewing by the investors of actions taken on the complaint and its current status. j) Dedicated email ID for communication with Investor Education and Protection Fund Authority: The Company has a dedicated e-mail id iepf@tatapower.com for communication with the IEPF Authorities. Stakeholders are requested to send their IEPF claim documents at iepfclaim@tsrdarashaw.com. k) Reminder to investors: Reminders to collect unclaimed dividend on shares or debenture redemption/interest are sent to the concerned shareholders and debenture holders. General Shareholder Information (a) Details of AGM: Thursday, 30th July 2020 at 3:00 p.m. (IST) In accordance with the General Circular issued by the MCA on 5th May 2020, the AGM will be held through Video Conferencing (VC) / Other Audio Visual Means (OAVM) only. For details, please refer to the Notice of the AGM. As required under Regulation 36(3) of the Listing Regulations and Secretarial Standard 2, particulars of a Director seeking re-appointment at this AGM are given in the Annexure to the Notice of AGM. (b) Financial Year : 1st April to 31st March (c) Dividend : Dividend of ₹ 1.55 per Equity share fully paid up (155%) for the financial year 2019-20 has been recommended by the Board of Directors to Members for their approval. If approved by the Members, payment will be made on and from Monday, 3rd August 2020. For the Members who are unable to receive the dividend directly in their bank accounts, the Company shall dispatch the dividend warrant to them, upon normalisation of postal services and other activities. (d) Book Closure : From Thursday, 16th July 2020 to Thursday, 30th July 2020 (both days inclusive). 213 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm (e) E-voting Dates : The cut-off date for the purpose of determining the shareholders eligible for e-voting is 23rd July 2020. The e-voting commences on Monday, 27th July 2020 at 9.00 a.m. (IST) and ends on Wednesday, 29th July 2020 at 5.00 p.m. (IST). (f) International Securities Identification Number (ISIN): INE245A01021 (g) Corporate Identity Number (CIN): L28920MH1919PLC000567 (h) Listing on Stock Exchanges: Listing of Equity Shares: The Company’s Equity Shares are listed on two Stock Exchanges in India viz. (a) BSE Limited (Regional Stock Exchange), Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001 and (b) National Stock Exchange of India Limited, Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai 400 051. Listing of GDS and GDRs: In February 1994, the Company jointly with the erstwhile The Tata Hydro-Electric Power Supply Company Limited and The Andhra Valley Power Supply Company Limited issued Global Depository Shares (GDS) in the International Market which have been listed on Luxembourg Stock Exchange, 35 Boulevard Joseph II, 1840, Luxembourg and have been accepted for clearance through Euroclear and Cedel. They have also been designated for trading in the PORTAL System of the National Association of Securities Dealers, Inc. In July 2009, the Company raised USD 335 million through offering of Global Depositary Receipts (GDRs). The GDRs are listed and traded in Euro MTF market of Luxembourg Stock Exchange and are also available for trading on IOB (International Order Board) of London Stock Exchange. Number of outstanding GDS as on 31st March 2020: • 436 (Issued in 1994 to Citibank NA) • 2,980 (Issued in 2009 to Bank of New York, Mellon) Listing of Debt Securities: The various series of Debentures issued by the Company are listed as under: Table 18 Sl. No. Series Amount outstanding as on 31st March 2020 (C in crore) Listed on Name of the Debenture trustee with full contact details 125 106 210 1,500 1,500 1,500 250 500 750 Centbank Financial Services Limited, Central Bank of India, MMO Bldg., 3rd Floor (East Wing), 55, Mahatma Gandhi Road, Fort, Mumbai 400 001. Tel : 022 2261 6217 Fax : 022 2261 6208 E-mail : info@cfsl.in IDBI Trusteeship Services Limited, Asian Building, Ground Floor, 17, R. Kamani Marg, Ballard Estate, Mumbai 400 001. Tel : 022 4080 7000 Fax : 022 6631 1776 E-mail : itsl@idbitrustee.com NSE NSE NSE NSE BSE & NSE BSE NSE NSE NSE 9.15% Secured, Non-Convertible, Non-Cumulative, Redeemable, Taxable Debentures with Separately Transferable Redeemable Principal Parts 9.15% Secured, Non-Convertible, Non-Cumulative, Redeemable, Taxable Debentures with Separately Transferable Redeemable Principal Parts 9.40% Redeemable, Transferable, Secured, Non-Convertible Debentures 10.75% Unsecured Debentures 11.40% Perpetual Bonds 7.99% Unsecured, Redeemable, Non- Convertible Debentures 9% Series I Unsecured, Redeemable, Taxable, Listed, Rated, Non- Convertible Debentures 8.84% Series II Unsecured, Redeemable, Taxable, Listed, Rated, Non-Convertible Debentures 8.84% Series III Unsecured, Redeemable, Taxable, Listed, Rated, Non-Convertible Debentures 1. 2. 3. 4. 5. 6. 7. 8. 9. 214 Report on Corporate GovernanceThe Tata Power Company Limited Integrated Annual Report 2019-20 During the year, the Company redeemed 9.48% Unsecured, Non-cumulative, Redeemable, Taxable, Listed, Rated, Non- Convertible Debentures. (i) Listing and Custodial Fees: The Company has paid the requisite Annual Listing and Custodial Fees to the Stock Exchanges and Depositories viz. Central Depository Services (India) Limited (CDSL) and NSDL, respectively for the financial years 2019-20 and 2020-21. (j) Listing Details: Name of the Exchange BSE Limited (physical form) (demat form) Table 19 Stock Code 400 500400 National Stock Exchange of India Limited TATAPOWER EQ (k) Market Price Data: Month wise High, Low and trading volumes of the Company’s Equity Shares during the last financial year at BSE and NSE are given below: Stock Exchange Month April 2019 May 2019 June 2019 July 2019 August 2019 September 2019 October 2019 November 2019 December 2019 January 2020 February 2020 March 2020 High (D) 74.02 70.65 69.00 73.90 59.90 67.25 61.50 59.60 56.50 61.50 57.95 44.65 BSE Low (D) 67.50 61.20 63.55 58.90 51.10 53.85 57.65 54.50 51.40 56.25 46.65 32.35 No. of shares traded 2,08,82,981 1,67,84,998 1,07,78,854 1,30,84,995 1,39,93,133 4,59,75,279 2,17,94,800 2,28,30,597 87,11,872 78,64,450 88,29,109 1,65,74,652 High (D) 74.40 70.80 69.00 73.85 59.75 67.20 61.60 59.70 56.50 61.55 58.00 44.75 NSE Low (D) 67.70 61.35 63.50 58.90 51.10 53.85 57.60 54.50 51.40 56.25 46.70 32.30 Table 20 No. of shares traded 14,74,10,750 14,72,61,127 10,51,61,102 16,33,13,005 19,28,11,950 22,87,86,254 14,93,60,352 19,32,29,456 16,36,80,713 17,33,72,170 17,68,76,778 28,05,10,315 (l) The market share price in comparison to broad-based indices like BSE Sensex and Nifty are given below: (i) Comparison of the Company’s Share Price with BSE (ii) Comparison of the Company’s Share Price with NSE Nifty Sensex and BSE Power Sensex in FY20: and NSE Nifty Energy in FY20: Months April 2019 May 2019 June 2019 July 2019 August 2019 September 2019 October 2019 November 2019 December 2019 January 2020 February 2020 March 2020 Tata Power closing price at BSE 67.75 68.85 69.00 60.55 56.75 62.50 59.30 57.40 56.50 58.05 46.65 32.85 BSE Sensex Table 21 BSE Power Sensex 39,031.55 39,714.20 39,394.64 37,481.12 37,332.79 38,667.33 40,129.05 40,793.81 41,253.74 40,723.49 38,297.29 29,468.49 1,969.54 2,010.12 2,093.86 1,966.31 1,887.96 1,934.40 1,986.56 1,924.80 1,926.25 1,899.25 1,716.78 1,377.95 Months April 2019 May 2019 June 2019 July 2019 August 2019 September 2019 October 2019 November 2019 December 2019 January 2020 February 2020 March 2020 Tata Power closing price at NSE 67.80 68.80 69.00 60.55 56.75 62.50 59.30 57.35 56.50 58.10 46.70 32.85 Nifty Nifty Energy Table 22 11,748.15 11,922.80 11,788.85 11,118.00 11,023.25 11,474.45 11,877.45 12,056.05 12,168.45 11,962.10 11,201.75 8,597.75 16,500.00 16,560.35 16,046.80 14,559.45 14,382.25 15,501.60 16,486.15 16,232.15 15,908.20 14,838.80 13,651.00 11,124.15 215 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm (iii) Performance in comparison to broad-based indices: Table 23 NSE 74.40 32.85 -55.85 Company's Share Price As at 01.04.2019 As at 31.03.2020 Change (%) BSE 74.20 32.85 -55.72 Indices As at 01.04.2019 As at 31.03.2020 Change (%) Sensex 38,871.87 29,468.49 -24.19 Table 24 Nifty 11,669.15 8,597.75 -26.32 (m) None of suspended from trading. the Company’s securities have been (n) (i) Registrars and Share Transfer Agents: TSR Darashaw Consultants Private Limited (TSRD) (Formerly known as TSR Darashaw Limited), 6-10, Haji Moosa Patrawala Industrial Estate (Near Famous Studio), 20, Dr. E. Moses Road, Mahalaxmi, Mumbai 400 011. Tel.: 022 6656 8484, Fax : 022 6656 8494, Email: csg-unit@tsrdarashaw.com Website: www.tsrdarashaw.com (ii) Branches of TSRD 1. 503, Barton Centre, 5th floor, 84, Mahatma Gandhi Road, Bengaluru 560 001. Tel : 080 2532 0321, Fax : 080 2558 0019; E-mail : tsrdlbang@tsrdarashaw.com 2. Bungalow No.1, ‘E’ Road, Northern Town, Bistupur, Jamshedpur 831 001. Tel : 0657 242 6616, Fax : 0657 242 6937; E-mail: tsrdljsr@tsrdarashaw.com 3. Tata Centre, 1st Floor, 43, Jawaharlal Nehru Road, Kolkata 700 071. Tel : 033 2288 3087, Fax : 033 2288 3062; E-mail : tsrdlcal@tsrdarashaw.com 4. Plot No.2/42, Sant Vihar, Ansari Road, Darya Ganj, New Delhi 110 002. Tel : 011 2327 1805, Fax : 011 2327 1802; E-mail : tsrdldel@tsrdarashaw.com (iii) Agent of TSRD Shah Consultancy Services Pvt. Ltd. 3, Sumatinath Complex, Pritam Nagar, Akhada Road, Ellisbridge, Ahmedabad - 380 006 Telefax : 079 2657 6038 E-mail : shahconsultancy8154@gmail.com For the convenience of Members, all communications/ documents are also accepted at the abovementioned branches/ agency of TSRD between 10.00 a.m. to 3.30 p.m. (Monday to Friday except bank holidays). (o) Share transfer system: All the transfers are processed by the RTA and are approved by the Stakeholders’ Relationship Committee. All share transfer and other communications regarding share certificates, change of address, dividends, etc. should be addressed to the RTA. Compliance of Share Transfer formalities As per the requirement of Regulation 40(9) of the Listing Regulations, the Company has obtained half-yearly certificates from the Company Secretary in practice for due compliance of share transfer formalities. The number of shares transferred/transmitted in physical form during the last two financial years are given below: Shares transferred/transmitted in physical form Number of transfers/ transmissions Number of shares FY20 1,046 Table 25 FY19 5,601 22,40,811 69,35,646 (p) Shareholding details of the Company: i. Distribution of Shareholding by range of shareholding as on 31st March 2020: Range of Holdings 1 - 5000 5001 - 10000 10001 - 20000 20001 - 30000 30001 - 40000 40001 - 50000 50001 - 100000 100001 and above Total Number of shares Number of shareholders Physical 2,07,48,004 81,78,786 43,91,017 17,99,267 12,78,500 5,24,580 10,83,400 19,74,340 Demat 14,19,41,235 5,44,29,312 4,97,76,081 2,55,01,823 1,58,25,667 1,19,20,221 3,16,57,084 2,33,37,44,193 3,99,77,894 2,66,47,95,616 % Physical Total 16,374 6.02 16,26,89,239 1,186 2.31 6,26,08,098 314 2.00 5,41,67,098 75 1.01 2,73,01,090 36 0.63 1,71,04,167 12 0.46 1,24,44,801 17 1.21 3,27,40,484 6 2,33,57,18,533 86.36 18,020 2,70,47,73,510* 100.00 % 90.87 6.58 1.74 0.42 0.20 0.07 0.09 0.03 Demat 3,37,305 7,688 3,583 1,040 456 264 450 472 100.00 3,51,258 % 96.03 2.19 1.02 0.30 0.13 0.07 0.13 0.13 Total 3,53,679 8,874 3,897 1,115 492 276 467 478 100.00 3,69,278 Table 26 % 95.78 2.40 1.06 0.30 0.13 0.07 0.13 0.13 100.00 * Excluding 28,32,060 shares not allotted but held in abeyance, 44,02,700 shares cancelled pursuant to a Court Order and 4,80,40,400 shares of the Company held by the erstwhile The Andhra Valley Power Supply Co. Ltd. cancelled pursuant to the Scheme of Amalgamation sanctioned by the High Court of Judicature at Bombay. 216 Report on Corporate GovernanceThe Tata Power Company Limited Integrated Annual Report 2019-20 ii. Shareholding pattern of the Company as on 31st March 2020: Particulars Promoters (including Promoter Group) Directors and their relatives Insurance Companies Financial Institutions/Banks Mutual Funds / UTI Clearing Members Corporate Bodies Body Corporate-NBFC Limited Liability Partnership-LLP Alternate Investment Fund Trusts Resident Individuals & HUF Central / State Governments Foreign Institutional Investors Foreign Portfolio Investors - Corporate Foreign Banks OCBs OCBs-DR Global Depository Receipts Non-Resident Indians QIB-Insurance Co. Regd. with IRDA IEPF Suspense A/c Total iii. Top 10 Shareholders of the Company as on 31st March 2020 Equity Shares of D 1 each Table 27 No. of Shares 1,00,66,91,528 36,862 33,65,79,095 1,68,62,117 35,70,45,674 90,20,989 3,32,00,613 81,950 8,23,333 1,48,32,479 25,28,314 35,88,42,229 2,56,09,803 4,51,848 50,31,63,143 19,75,582 4,000 12,21,000 4,22,300 2,44,45,856 28,96,492 80,38,303 % 37.22 0.00 12.44 0.62 13.20 0.33 1.23 0.00 0.03 0.55 0.09 13.27 0.95 0.02 18.60 0.07 0.00 0.05 0.02 0.90 0.11 0.30 2,70,47,73,510 100.00 Table 28 Sl. No. Name of Shareholder Total holdings % to capital 1 2 3 4 5 6 7 8 9 Tata Sons Private Limited ICICI Prudential Value Discovery Fund Matthews Pacific Tiger Fund Life Insurance Corporation of India The New India Assurance Company Limited Reliance Capital Trustee Co Ltd-A/C Nippon India Growth Fund General Insurance Corporation of India First State Investments Icvc- Stewart Investors Global Emerging Markets Leaders Fund Tata Steel Limited 10 Franklin India Equity Advantage Fund Total 95,39,46,984 21,83,11,309 18,03,16,487 17,15,81,237 5,21,93,839 5,04,59,465 4,68,62,960 4,58,28,682 3,91,22,725 3,63,17,715 35.27 8.07 6.67 6.34 1.93 1.87 1.73 1.69 1.45 1.34 1,79,49,41,403 66.36 217 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm (q) Details of Equity Shares in dematerialised and physical form as on 31st March 2020: The Company’s shares are compulsorily traded in dematerialised form and are available for trading through both the Depositories in India viz. NSDL and CDSL. The details of number of equity shares of the Company which are in dematerialised and physical form are given below: Particulars of Shares Dematerialised form NSDL* (A) CDSL (B) Sub-total (A+B) Physical form Total Shares of ₹ 1 each Shareholders Number 2,57,71,12,853 8,76,82,763 2,66,47,95,616 3,99,77,894 2,70,47,73,510 % to total 95.28 3.24 98.52 1.48 100.00 Number 2,10,840 1,40,418 3,51,258 18,020 3,69,278 Table 29 % to total 57.10 38.02 95.12 4.88 100.00 * includes shares held by Tata Sons and promoter group representing 37.22% of the total shareholding. (r) Commodity price risk or foreign exchange risk and hedging activities: The Company has adopted the Commodity Price Risk Management Policy to manage its risks associated with commodity imports (presently only Coal) from international markets. The objective of this policy is to ensure protection from risk arising out of adverse and volatile movement in commodity prices by proper monitoring of the exposures and taking timely actions to keep risks to acceptable levels. In terms of SEBI Circular No. SEBI/HO/CFD/CMD1/CIR/P/2018/0000000141 dated 15th November 2018, the required information is provided as under: i) Risk management policy of the Company with respect to commodities including through hedging: The Commodity Price Risk Management Policy is available on the Company’s website at https://www.tatapower.com/pdf/aboutus/commodity.pdf. ii) Exposure of the Company to commodity and commodity risks faced by the Company throughout the year: Total exposure of the listed entity to commodities in ₹: Total coal exposure of the Company in FY 2019-20 is • approx. ₹ 2,213.69 crore. • Exposure of the listed entity to various commodities: Commodity Name Exposure in ₹ towards the particular commodity Exposure in quantity terms towards the particular commodity Table 30 % of such exposure hedged through commodity derivatives Domestic market International market Total OTC Exchange OTC Exchange Coal • Trombay Plant - ₹ 1,347.31 crore • Trombay Plant - 2.38 Million MT (imported) • Jojobera Plant - ₹ 866.38 crore • Jojobera Plant - 2.02 Million MT (domestic) Nil Nil Nil Nil Nil • Commodity risks faced by the Company during the year and how they have been managed are given below: The Company has its coal based power generation plants situated at Trombay, Mumbai and Jojobera, Jamshedpur (Jharkhand). The Trombay Plant imports coal from Indonesia under long term index linked contract in accordance with Indonesian price regulation, while Jojobera Plant imports domestic coal (indigenous coal) which is governed by notified price declared by Coal India Limited. The Company, therefore, inherently faces commodity price risk from use of coal for its power generation facilities. However, as both the aforesaid plants are regulated business and the cost of coal is pass-through, the Company does not have any risk towards fluctuation of price of coal being sourced for these plants. Therefore, the price risk on imported as well as domestic coal is not hedged. To address short term price volatility and assure supply, the Company has entered into long term coal procurement agreements. Further, to manage sourcing, the Company has a dedicated Fuel Procurement team with strong understanding of coal markets. This team works closely with coal suppliers and the Company’s operations team to plan and source its coal supplies through reliable and lowest cost supply chain. The foreign exchange variation on the imported coal is allowed as a full cost pass-through in the tariff of the two regulated businesses and is therefore not hedged. 218 Report on Corporate GovernanceThe Tata Power Company Limited Integrated Annual Report 2019-20 (s) Plant locations of the Company and Group Companies: Type of plants Thermal Power Generating Plants Address of plants Table 31 Trombay Generating Station, Mahul Road, Chembur, Mumbai, Maharashtra Jojobera Power Plant, Jojobera, Jamshedpur, Jharkhand Haldia Power Plant, HFC Complex, Patikhali Haldia, District Purb, East Medinipur, West Bengal Coastal Gujarat Power Limited, Mundra Ultra Mega Power Plant, Tunda-Vandh Road, Village Tunda, Taluka Mundra, Kutch, Gujarat Maithon Power Limited, Village Dambhui, P.O. Barbindia, P.S. Nirsa, District Dhanbad, Jharkhand Industrial Energy Limited, Inside of Tata Steel Limited, Kalinganagar, Jajpur, Jajpur Road, Dubri, Odisha Rithala CCGT Power Plant, 2/9, Substation Building, Behind Char Dham Apartment, Sector 9, Rohini, New Delhi Hydro Generating Stations Generating Station, Bhira P.O. Bhira, Taluka Mangaon, District Raigad, Maharashtra Generating Station, Bhivpuri, P.O. Bhivpuri Camp, Taluka Karjat, District Raigad, Maharashtra Generating Station, Khopoli, P.O. Khopoli Power House, District Raigad, Maharashtra Generating Station, Itezhi Tezhi Power Corporation, Plot 3039, Makishi Road, Fairview, Post Net 239, Private Bag E891, Manda Hill, Lusaka, Zambia Dagachhu Hydro Power Corporation Limited, Dagapela, Dagana, Bhutan Adjaristaqali Georgia LLC, Shuakhevi Hydro Power Plant, Adjara Region Shuakhevi Municipality, Village Akhaldaba, Georgia Wind Farms Supa Wind Farm, Kauda Dongar, Village Shahjahanpur & Pimpalgoan Kauda, Taluka - Parner, District Ahmednagar, Maharashtra Khandke Wind Farm, Village Ranjani Agadgaon, Deogaon & Mehkari, District Ahmednagar, Maharashtra Bramanvel Wind Farm, Village Valve, Taluka Sakri, District Dhulia, Maharashtra Sadawaghapur Wind Farm, Village Sadawaghapur, Taluka Patan, District Satara, Maharashtra Agaswadi Wind Farm, Village Kannarwadi, Hiwarwadi & Agaswadi, Taluka Khatav, District Satara, Maharashtra Nivade Wind Farm, Village Sawarghar and Niwade, Taluka Patan, District Satara, Maharashtra Visapur Wind Farm, Village Kokrale, Visapur, Girijashankarwadi & Rajachekurle, Taluka Khatav, District Satara, Maharashtra Agaswadi Wind Farm, Taluka Maan, District Satara, Maharashtra Visapur Girijashankar Wadi, District Satara, Maharashtra Jath, Indorama, Maharashtra Samana Wind Farm, Village Mota Panchdevda, Taluka Kalavad, District Jamnagar, Gujarat Rojmal Phase I & II Wind Farm, Village Sukhpur, Taluka Babra, District Amreli, Gujarat Dwarka Wind Farm, Village Bhatiya, District Khambhalia, Gujarat Gadag Wind Farm, Hosur, Kanavi, Mulgund, Shiroland Harti, District Gadag, Karnataka Poolavadi Wind Farm, Villages: Anikaduvu, Mongilphuluvu, Illupunagaram, Taluka Madathukulam, District Tripur, Tamil Nadu Dalot Wind Farm, Village Raipur, Jungle, Khanpur, Talabkheda, Karaikhede, Taluka Arnod, District Pratapgarh, Rajasthan Vagarai Wind Farm Limited, Appayampatti Village, Oddan Chatram Taluk, District Dindigul, Tamil Nadu Inox Wind Infrastructure Limited, 220 KV Pooling Substation Dangri, Teh Fatehgarh, District, Jaisalmer, Rajasthan Tata Power Renewable Energy Limited, Dangri Wind Farm, Village Dangri, District Jaisalmer, Rajasthan Walwhan Wind RJ Limited, 132 KV Dhalmoo Substation,Village Dhalmoo, Tehsil Pratapgarh, District Pratapgarh, Rajasthan Walwhan Energy Rajasthan Limited, Dangri Wind Farm, Village Dangri, District Jaisalmer, Rajasthan Lahori Wind Farm, Village Lahori, District Shajapur, Madhya Pradesh Nimbagallu Wind Project, Nimbagallu Village, Uravakonda (Mandal), District Anantapur, Andhra Pradesh Amakhala Emoyeni Wind Farm, Bedford 5780, Eastern Cape, South Africa Tsitsikama (TCWF) Wind Farm, Humansdorp 6300, Eastern Cape, South Africa Solar Plants Mulshi Solar Plant, Mulshi (Khurd), Post Male, Taluka Mulshi, District Pune, Maharashtra 219 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Type of plants Address of plants Roof top Solar, Delhi Bidar, Srinivasapura, Kanakagiri, Karnataka Noamundi Solar Power Plant, Jharkhand Palsawade Solar Plant, Palsawade, Taluka Maan, District Satara, Maharashtra Sastra University, Maharashtra Mithapur Solar Plant, Plot B, Survey No. 78, Mithapur, District Jamnagar, Gujarat Tata Power Solar Plant, Belampalli Village, Ankepalli and Venkapalli, Mandal, Tandur, District Mancherial, Telangana Plot No.6, Gujarat Solar Park Charanka, District Patan, Gujarat 400 MW TPREL Solar Power Plants (blocks # 15,17, 18, 19, 21, 27, 32 and 34) @ 2000 MW Solar Park, Thirumani Village, Pavagada Taluka, Tumkur District, Karnataka Plot - P4&P5, Ananthapuramu Ultra Mega Solar Park, Thumkunta Village, Galiveedu Mandal, Raychoti Taluka, Kadapa, Andhra Pradesh Walwhan Urja Anjar Limited, Village Khirasara, Taluka Anjar, District Kutch, Gujarat Walwhan Solar Energy GJ Limited, Village Khirasara, Taluka Anjar, District Kutch, Gujarat MI MySolar 24 Private Limited, Village Fatepur, Taluka Dasada, District Surendranagar, Gujarat Dreisatz MySolar 24 Private Limited, Village Fatepur, Taluka Dasada, District Surendranagar, Gujarat Walwhan Solar Raj Limited, Khasra No. 44, Village Rawra, Tehsil Bap, Phalodi District, Jodhpur, Rajasthan Northwest Energy Private Limited, Khasra No. 240/1, Village Rawra, Tehsil Bap, Phalodi District, Jodhpur, Rajasthan Walwhan Solar AP Limited, Village Shrimandrup Nagar and Rawra, Phalodi District, Jodhpur, Rajasthan Walwhan Solar RJ Limited, Village Deh, Tahsil Kolayat, District Bikaner, Rajasthan Walwhan Solar MP Limited: - 105 MW Solar Power plant, Village Bhagwanpura, Diken Area, Tehsil Jawad, District Neemuch, Madhya Pradesh - 25 MW Solar Power plant, Village Padaliya, Ratangarh Area, Tehsil Singoli, District Neemuch, Madhya Pradesh Walwhan Solar MH Limited, MIDC Mangalwedha (G.C.), Taluka Mangalwedha, Maharashtra Walwhan Renewable Energy Limited, C/o Clean Sustainable Solar Energy Private Limited, Village Shirshuphal, Baramati, Pune, Maharashtra Walwhan Solar AP Limited., Plot No- 5A, 6A & 6B., IDC Park, APIIC, Pulivendula, Kadapa District, Andhra Pradesh Walwhan Renewable Energy Limited - 30 MW Site, Survey No. 863 & 864, Near Lomada Village, Shimadripuram Mandal, Pulivendula Taluka, District Kadapa, Andhra Pradesh - 70 MW Site Vermalapudu, Owk - Mandal Tq., Kurnool District, Andhra Pradesh - 16 MW Site Rajapura Village, Molakalmuru Tq., Chitradurga District, Karnataka - 34 MW Site, Kodihalli Village, Hiriyuru Tq., Chitradurga District, Karnataka - 50 MW Site Bedareddyhalli Village, Challakere Tq., Chitradurga District, Karnataka - 50 MW Solar Site, Panchapatti, Veeriyapalayam Village, Krishnarayauram Taluk, Karur District - 50 MW Solar Site, Iyermalai, Karupathur & Vayalur Village, Krishnarayauram Taluk, Karur District - Kaithar, Metupirancheri Village, Manur Taluk, Tiruneliveli - Noida, Uttar Pradesh - Bhiwadi, Rajasthan Walwhan Solar KA Limited, Villages Nagasamudra & Heruru Taluka Molakalamuru, District Chitradurga, Karnataka Walwhan Solar PB Limited, Villages Jagaram Tirath & Teona Pujarian, Tehsil Talwandi Sabo, Bhatinda, Punjab Walwhan Solar TN Limited, Musri & TT PET - 100MW, Krishnapuram Village, Valaiyeduppu Post, Musiri Taluk, Trichy District, Tamil Nadu Walwhan Solar BH Limited: - Bahera, Block: Dobhi, P.O.: Barachatti Anchal, Gaya, Bihar - Savkala & amp, Khaira Khurd, Block Amas, P.O.: Sherghati Anchal, Sherghati, Gaya, Bihar Walwhan Solar MH Limited, Village Dhalmu, Pratapgarh, Rajasthan 150 MW TPREL MSEDCL Chhayan Solar PV Plant, Chhayan I, Pokhran, District Jaisalmer, Rajasthan Transmission and Distribution Division Kalyan Receiving Station, Shil Road, Netivli, Kalyan, District Thane, Maharashtra 220 Report on Corporate GovernanceThe Tata Power Company Limited Integrated Annual Report 2019-20 Type of plants Address of plants Dharavi Receiving Station, Matunga, Near Shalimar Industrial Estate, Dharavi, Mumbai, Maharashtra Ambernath Receiving Station, Murbad Road, Varap, P.O. (Via) Kalyan, District Thane, Maharashtra Backbay Receiving Station, 148, Lt. Gen. J. Bhonsle Marg, Nariman Point, Mumbai, Maharashtra Bhokarpada Receiving Station, Hiranandani Business Park, Opposite Maharashtra Jeevan Pradhikaran, At - Bhokarpada Village, Post Poyanje, Panvel, Raigad, Maharashtra Carnac Receiving Station, 34, Sant Tukaram Road, Carnac Bunder, Mumbai, Maharashtra Chembur Receiving Station, P.O. Box HO 18801, RCF Premises, Near Gate No.2 Chembur, Mumbai, Maharashtra Kolshet Substation, Ghodbunder Road, Manpada, District Thane, Maharashtra Kurla Receiving Station, Tata Power, Kirol Road, Kamani, (Inside HDIL Premier Compound), Kurla (West), Mumbai, Maharashtra Malad Substation, Malad Marve Road, Malad (West), Mumbai, Maharashtra Mankhurd Substation, Near Mankhurd - Ghatkopar Highway, Mumbai Pune Road, Mankhurd, Mumbai, Maharashtra Parel Receiving Station, G D Ambekar Marg (Parel Tank Road), Parel, Mumbai, Maharashtra Panvel Receiving Station, Old Mumbai Pune Road, Behind MSEDCL Bhingari Substation, Bhingari Panvel, District Raigad, Maharashtra Sahar Receiving Station, Near Hotel Leela, Sahar T2 Airport Road, Andheri East, Mumbai, Maharashtra Salsette Receiving Station, Lake Road, Bhandup, Mumbai, Maharashtra Versova Substation, Off Andheri - Malad Link Road, Andheri (West), Mumbai, Maharashtra Vikhroli Substation, Godrej Soap Premises, Vikhroli (East), Mumbai, Maharashtra Mahalaxmi Substation, Senapati Bapat Marg, Lower Parel, Mumbai, Maharashtra BKC Receiving Station, Near Asian Heart Hospital, Opposite Bharat Diamond Bourse, Bandra Kurla Complex, Bandra (East), Mumbai, Maharashtra Borivali Receiving Station, Tata Power House Road, Borivali (East), Mumbai, Maharashtra Saki Receiving Station, 42, Saki Vihar Road, Andheri (East), Mumbai, Maharashtra Powai Receiving Station, Near MTNL, Hiranandani Kailas Complex Road, Powai, Mumbai, Maharashtra 42/43, Electronic City, Electronic City Post Office, Hosur Road, Bengaluru, Karnataka Strategic Engineering Division (t) Address for correspondence: The Tata Power Company Limited, Bombay House, 24, Homi Mody Street, Mumbai 400 001. Tel.: 022 6665 8282 Fax: 022 6665 8801, E-mail: tatapower@tatapower.com; Website: www.tatapower.com (u) Credit Rating: During the year under review, the Company has sustained its long-term bank facility credit rating of CRISIL AA- (Positive) which has been reaffirmed by CRISIL Limited (CRISIL). The rating of AA- (Positive) awarded by CRISIL reflects high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. Further, CRISIL has reaffirmed the rating of Non-Convertible debentures (NCD) programme (including perpetual and subordinated Non-convertible debentures) of the Company as AA-/Positive. The Company’s short-term bank facility credit rated as A1+ by CRISIL, has been reaffirmed. The rating of A1+ for Commercial Paper has also been reaffirmed by CRISIL. This highest rating of A1+ indicates a very strong degree of safety with regard to timely payment of interest and principal. Such instrument carry lowest credit risk. Further, ICRA Limited (ICRA) has reaffirmed the rating on NCD programme of the Company as AA- (Stable). The rating indicates highest degree of safety regarding timely servicing of financial obligation. The rated instrument reflects high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. The outlook on the long-term rating is stable. The rating of A1+ for Commercial Paper has also been reaffirmed by ICRA. This highest rating of A1+ indicates a very strong degree of safety with regard to timely payment of interest and principal. Such instruments carry lowest credit risk. CARE Ratings Limited has reaffirmed the rating on NCD programme (including perpetual bonds) of the Company, as CARE - AA. The outlook is Stable. India Ratings & Research Private Limited (Ind-Ra), a Fitch Group Company affirmed the rating on NCD programme of the Company as IND AA /Stable. 221 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Other Disclosures Particulars Regulations Details Website link for details/policy Table 32 Regulation 23 of the Listing Regulations and Schedule V (C) 10(f ) to the Listing Regulations Disclosures on materially significant related party transactions that may have potential conflict with the listed entity interests of at large and Web link for policy on dealing with related party transactions There are no material related party transactions during the year under review that have conflict with the interest of the Company. Transactions entered into with related parties during the financial year were in the ordinary course of business and at arms’ length basis and were approved by the Audit Committee. Certain transactions which were repetitive in nature were approved through omnibus route. The Board has received disclosures from senior management relating to material, financial and commercial transactions where they and/or their relatives have personal interest. There are no materially significant related party transactions which have potential conflict with the interest of the Company at large. The policy on dealing with related party transactions adopted by the Company is uploaded on the Company’s website. There were no instances of non-compliance, penalties, strictures imposed on the Company by the Stock Exchanges, the SEBI or any statutory authority, on any matter related to capital markets, during the last 3 years. https://www.tatapower. com/pdf/aboutus/rpt-policy- framework-guidelines.pdf - Schedule V (C) 10(b) to the Listing Regulations Regulation 22 of the Listing Regulations and Schedule V (C) 10(c) to the Listing Regulations The Company has adopted a Whistle Blower Policy & Vigil Mechanism for directors, employees and stakeholders to report concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct. The said policy has been posted on the Company’s website. The Company affirms that no personnel have been denied access to the Chairman of Audit Committee of Directors. https://www.tatapower.com/ pdf/aboutus/whistle-blower- policy-and-vigil-mechanism.pdf Details of non - compliance by the Company, penalty, strictures imposed on the the Stock Company by Exchange or SEBI or any statutory authority on any matter related to capital markets Vigil Details of establishment of Mechanism, Blower policy, Whistle and that affirmation no personnel has been denied access to the Audit Committee 222 Report on Corporate GovernanceThe Tata Power Company Limited Integrated Annual Report 2019-20 Particulars Regulations Details Website link for details/policy Details of mandatory requirements and adoption the non-mandatory of requirements Schedule II Part E of the Listing Regulations Web link where policy for determining material subsidiaries is disclosed Disclosures of commodity price risks and commodity hedging activities Regulation 16 (1)(c) of the Listing Regulations and Schedule V (C) 10(e) to the Listing Regulations Schedule V (C) 10(g) to the Listing Regulations raised Details of utilisation of through funds allotment preferential institutional or qualified placement as specified under Regulation 32(7A) A certificate from Company Secretary in practice for non-debarment/ disqualification Schedule V (C) 10(h) to the Listing Regulations Schedule V (C) 10(i) to the Listing Regulations Schedule V (C) 10(j) to the Listing Regulations Disclosure with respect to non-acceptance of any recommendation of any Committee of the Board is mandatorily which required, along with reasons thereof requirements of All mandatory the Listing Regulations have been complied with by the Company. The status of compliance with the discretionary requirements, as stated under Part E of Schedule II to the Listing Regulations, are as under: • The Board: As on date, the positions of the Chairman and the CEO are separate. Mr. N. Chandrasekaran, Non-Executive Chairman of the Company maintains a separate office for which the Company is not required to reimburse expenses. The Board has appointed Mr. Praveer Sinha as the CEO & Managing Director of the Company. All policy and strategic decisions of the Company are taken through a majority decision of the Board. • Shareholder Rights: The half-yearly financial performance of the Company is sent to all the Members possessing email IDs. The results are also posted on the Company’s website. • Modified opinion(s) in Audit Report: The auditors have expressed an unmodified opinion in their report on the financial statements of the Company. • Reporting of Internal Auditor: The Internal Auditor reports to the Audit Committee of Directors. The policy for determining material subsidiaries is uploaded on the adopted by the Board Company’s website. The disclosure of commodity price risks and is provided under section hedging activities ‘General Shareholder Information’. The policy on Commodity Price Risk Management adopted by the Company is uploaded on the Company’s Website. The Company did not raise any funds through preferential allotment or qualified institutions placement during the year under review. from A certificate the Practicing Company Secretaries has been received stating that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by SEBI/MCA or any such statutory authority and the same is reproduced at the end of this report and marked as Annexure IV. All the recommendations of the various mandatory committees were accepted by the Board. - https://www.tatapower. com/pdf/aboutus/policy- for-determining-material- subsidiaries.pdf https://www.tatapower.com/ pdf/aboutus/commodity.pdf - - - 223 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Particulars Regulations Details Website link for details/policy Subsidiary Companies Regulation 24 of the Listing Regulations Policy on Archival and Policy on Preservation of Documents 30 Regulation and Regulation 9 of the Listing Regulations Policy on Determination of Materiality for Disclosures Regulation 30 of the Listing Regulations Code of Conduct Regulation 17 of the Listing Regulations Dividend Policy Distribution Regulation 43A of Listing Regulations the Terms and conditions of Appointment of IDs Regulation 46 of the Listing Regulations reviews The Audit Committee the financial statements of subsidiaries of the Company. It investments made by such also reviews the subsidiaries, the statement of all significant transactions and arrangements entered into by the subsidiaries, if any, and the compliances of each materially significant subsidiary on a periodic basis. The minutes of board meetings of the unlisted subsidiary companies are placed before the Board. Composition of the Board of material subsidiaries is in accordance with the Regulation 24(1) of the Listing Regulations. The Policy on Archival and Policy on Preservation of Documents, duly adopted by the Board, are uploaded on the Company’s website. The Policy on determination of materiality for disclosures adopted by the Board is uploaded on the Company’s website. The members of the Board and Senior Management Personnel have affirmed compliance with the Code of Conduct applicable to them. A certificate by the CEO & Managing Director, on the compliance of same, is reproduced at the end of this report and marked as Annexure I. The Dividend Policy adopted by the Board is uploaded on the Company’s website. and Terms re-appointment of Company’s website. conditions appointment/ IDs are available on the of Familiarisation Program Regulation 25(7) read with Regulation 46 of the Listing Regulations Details of familiarisation program imparted to IDs are available on the Company’s website. - https://www.tatapower.com/ pdf/aboutus/archival-policy. pdf https://www.tatapower.com/ pdf/aboutus/preservation- policy-documents.pdf https://www.tatapower.com/ pdf/aboutus/determining- policy.pdf - https://www.tatapower.com/ pdf/aboutus/dividend-policy. pdf https://www.tatapower. com/pdf/investor-relations/ Terms-&-conditions-of-IDs- appointment.pdf https://www.tatapower. com/pdf/investor-relations/ familiarisation-programme-for- directors.pdf Other Disclosures: 1. The Company has maintained an integrated compliance dashboard which provides assurance to the Management and the Board of Directors regarding effectiveness of timely compliances. All the compliances applicable to the Company have been captured in the dashboard and are mapped amongst the respective users. The timelines are fixed based on the legal requirement and the system is aligned in such a manner that it alerts the users in a timely manner. 2. In terms of Regulation 17(8) of the Listing Regulations, the CEO & Managing Director and the CFO made a certification to the Board of Directors in the prescribed format for the year under review, which has been reviewed by the Audit Committee and taken on record by the Board. The same is reproduced at the end of this report and marked as Annexure II. 3. The Company has obtained compliance certificate from the Practising Company Secretaries on corporate governance. The same is reproduced at the end of this report and marked as Annexure III. 4. Details of fees paid/payable to the Statutory Auditors and all entities in the network firm/network entity of which the Statutory Auditor is a part, by the Company and its subsidiaries during the year, are given below: Particulars Statutory Audit Other Services Out-of-pocket expenses Total By the Company* By Subsidiaries* Total Amount (₹ in crore) Table 33 3.63 0.58 0.15 4.36 2.66 0.98 0.24 3.88 6.29 1.56 0.39 8.24 * The above fees are exclusive of applicable tax. 224 Report on Corporate GovernanceThe Tata Power Company Limited Integrated Annual Report 2019-20 5. Disclosures in relation to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013: The Company has always believed in providing a safe and harassment-free workplace for every individual working in the Company. The Company has complied with the applicable provisions of the aforesaid Act, and the rules framed thereunder, including constitution of the Internal Complaints Committee. The Company has in place an Anti- Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the same is available on the Company’s website at https:// www.tatapower.com/pdf/aboutus/Sexual-harass-policy. pdf. All employees (permanent, contractual, temporary and trainees, etc.) are covered under this Policy. Status of complaints as on 31st March 2020: Sl. No. Particulars Table 34 Number of Complaints 1. 2. 3. Number of complaints filed during the financial year Number of complaints disposed off during the financial year Number of complaints pending at the end of the financial year 3 2 1* * the case was received in the last week of March 2020. 6. The Company has complied with all the requirements of Corporate Governance Report as stated under sub-paras (2) to (10) of section (C) of Schedule V to the Listing Regulations. 7. The Company has complied with all the requirements of corporate governance as specified in Regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of Regulation 46 of the Listing Regulations. 8. The Company follows Indian Accounting Standards (Ind- AS) in the preparation of its financial statements. 9. As required under Regulation 36(3) of the Listing Regulations and the secretarial standards, particulars of a Director seeking re-appointment at the forthcoming AGM are given in the Notice of the AGM to be held on 30th July 2020. 10. Directors and Officers Liability Insurance: As per the provisions of the Act and in compliance with Regulation 25(10) of the Listing Regulations, the Company has taken a Directors and Officers Liability Insurance (D&O) on behalf of all Directors including IDs, Officers, Managers and Employees of the Company for indemnifying any of them against any liability in respect of any negligence, default, misfeasance, breach of duty or breach of trust for which they may be guilty in relation to the Company. Other Shareholder Information: ➢ Transfer of unclaimed/unpaid amounts to Investor Education and Protection Fund: In accordance with the provisions of Sections 124, 125 and other applicable provisions, if any, of the Act, read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (hereinafter referred to as ‘IEPF Rules’) (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), the amount of dividend remaining unclaimed or unpaid for a period of seven years from the date of transfer to the Unpaid Dividend Account is required to be transferred to the Investor Education and Protection Fund (IEPF) maintained by the Central Government. In pursuance of this, the dividend remaining unclaimed or unpaid in respect of dividends declared upto the financial year ended 31st March 2012 have been transferred to the IEPF. The details of the unclaimed dividends so transferred are available on the Company's website at https://www.tatapower.com/investor-relations/ unclaimed-dividends.aspx and on the website of the MCA at http://www.iepf.gov.in/. In accordance with Section 124(6) of the Act, read with the IEPF rules, all the shares in respect of which dividend has remained unclaimed/unpaid for a period of seven consecutive years or more from the date of transfer to the unpaid dividend account are required to be transferred to the demat account of the IEPF Authority. Accordingly, all the shares in respect of which dividends were declared upto the financial year ended 31st March 2012 and remained unpaid or unclaimed are transferred to the IEPF. The Company had sent notices to all such Members in this regard and published a newspaper advertisement and, thereafter, transferred the shares to the IEPF during financial year 2019-20. The details of such shares transferred have been uploaded in the Company’s website at https://www.tatapower.com/ investor-relations/unclaimed-dividends.aspx. The details of unclaimed dividends and equity shares transferred to IEPF during the year 2019-20 are as follows: Table 35 Amount of unclaimed dividend transferred ₹ 1,54,60,564.70 Number of Equity shares transferred 12,22,452 225 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm The below table gives information relating to various outstanding dividends and the dates by which they can be claimed by the Members from the Company’s RTA: Date of dividend declaration Unclaimed Dividend (As on 31st March 2020) 16.08.2013 13.08.2014 05.08.2015 21.09.2016 24.08.2017 27.07.2018 18.06.2019 1,79,27,750.20 2,14,96,290.48 2,33,54,239.41 2,76,93,326.70 2,74,62,986.20 2,23,50,690.70 2,11,27,505.10 (Amount in C) Table 36 Last date for claiming payment from TSRD 19.09.2020 15.09.2021 07.09.2022 24.10.2023 20.09.2024 20.08.2025 17.05.2026 It may be noted that the unclaimed dividend for the financial year 2012-13 declared on 16th August 2013, is due to be transferred to the IEPF. The same can, however, be claimed by the Members by 19th September 2020. Members who have not encashed the dividend warrant(s) from the financial year ended 31st March 2013 onwards may forward their claims to TSRD before they are due to be transferred to the IEPF. The Members whose unclaimed dividends/shares have been transferred to IEPF, may claim the same by making an application to the IEPF Authority in e-Form IEPF-5 available on www.iepf.gov.in. No claim shall lie against the Company in respect of the dividend/shares so transferred. ➢ Shares held in electronic form: Members holding shares in electronic form may please note that: i) For the purpose of making cash payments to the investors through Reserve Bank of India approved electronic mode of payment (such as ECS, NECS, NEFT, RTGS etc.), relevant bank details available with the depositories will be used. Members are requested to update their bank details with their DPs. ii) Instructions regarding change of address, nomination and power of attorney should be given directly to the DPs. ➢ Shares held in physical form: To facilitate better servicing, Members holding shares in physical form are requested to notify/send to TSRD any change in their address/mandate/ bank details in which they wish their dividend to be credited, in case they have not been furnished earlier. ➢ Payment of dividend or interest or redemption or repayment: As required under Regulation 12 read with Schedule I to the Listing Regulations, companies are directed to use, either directly or through the depositories or through their RTA, electronic clearing services (local, regional or national), 226 direct credit, real time gross settlement, national electronic funds transfer, etc. for making payment of dividend/ interest on securities issued/redemption or repayment amount to the investors. For investors holding shares in demat mode, relevant bank details from the depositories will be sought. Investors holding shares in physical form, are requested to register instructions regarding their bank details with the RTA. Only in cases where either the bank details such as Magnetic Ink Character Recognition (MICR), Indian Financial System Code (IFSC) etc., that are required for making electronic payment, are not available or the electronic payment instructions have failed or have been rejected by the bank, physical payment instruments for making cash payments to the Investors may be used. ➢ Investor contact: In compliance with Regulation 62 of the Listing Regulations, a separate e-mail ID investorcomplaints@tatapower.com has been set up as a dedicated e-mail ID solely for the purpose of dealing with Members’ queries/complaints. The Company maintains a TOLL-FREE Investor Helpline No. 1800-209-8484 to give Members the convenience of one more contact point with TSRD, for redressal of grievances/ responses to queries. The Shareholders’ Relations Team Registered Office of the Company. Contact Person: Mr. J. E. Mahernosh Tel.: 022 6665 7508 is located at the ➢ E-voting: E-voting is a common internet infrastructure that enables investors to vote electronically on resolutions of companies. The Company will also have the E-voting facility for the items to be transacted at this AGM. The MCA has authorised NSDL and CDSL for setting up electronic platform to facilitate casting of votes in electronic form. The Company has entered into agreements with NSDL and CDSL for availing E-voting facilities. ➢ Nomination Facility: Pursuant to the provisions of Section 72 of the Act, Members are entitled to make nominations in respect of shares held by them. Members holding shares in physical form and intending to make/change the nomination in respect of their shares in the Company, may submit their requests in Form No. SH.13 to TSRD. Members holding shares in electronic form are requested to give the nomination request to their respective DPs directly. the Company’s website under Form No. SH.13 can be obtained from TSRD or downloaded from section ‘Investor Relations’ at https://www.tatapower.com/pdf/ nomination-form-14.pdf the Report on Corporate GovernanceThe Tata Power Company Limited Integrated Annual Report 2019-20 ➢ Depository Services: Members may write to the respective Depository or to TSRD for guidance on depository services. Address for correspondence with the Depositories is as follows: National Securities Depository Limited Trade World, 4th Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai 400 013 Tel. No. : 022 2499 4200 Fax Nos. : 022 2497 6351 e-mail : info@nsdl.co.in website : www.nsdl.co.in Central Depository Services (India) Limited Marathon Futurex, A-Wing, 25th floor, N. M. Joshi Marg, Lower Parel, Mumbai 400 013 Tel. No. : 022 2272 3333 Fax Nos. : 022 2272 3199 e-mail : investor@cdslindia.com website : www.cdslindia.com ➢ Secretarial Audit: In terms of the Act, the Company appointed M/s. Makarand M. Joshi & Co, Practising Company Secretaries, to conduct Secretarial Audit of records and documents of the Company for FY20. The Secretarial Audit Report is provided as Annexure V to the Board’s Report. ➢ Description of voting rights: All Equity shares issued by the Company carry equal voting rights. ➢ Awareness Sessions/Workshops: Employees across the Company as well as those forming part of the Tata Power group are being sensitized about the various policies and governance practices of the Company. The Company had developed a system of keeping its employees educated about TCoC, Vigil Mechanism and Whistle Blower Policy, Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, SEBI Insider Trading Regulations, etc. through emails, presentations and workshops. ➢ Stakeholder Engagement: The Company has a dedicated department which facilitates an on-going dialogue between the Company and its stakeholders. The communication channels include: For external stakeholders - Analyst/investors meet, for meeting with key stakeholders, shareholders, online service and dedicated e-mail service for grievances, corporate website and access to business media to respond to queries, etc. factory visits For internal stakeholders - Employee satisfaction surveys, employee engagement surveys in employee engagement processes, circulars and messages from management, corporate social initiatives, welfare initiatives for employees and their families, online updates for conveying topical developments, helpdesk facility, etc. improvement for ➢ Investor safeguards: In pursuit of the Company’s objective to mitigate/avoid risks while dealing with shares and related matters, the following are the Company’s recommendations to its Members: i) Open Demat Account and dematerialise your shares Members are requested to convert their physical holdings into electronic holdings. ii) Consolidate your multiple folios Members are requested to consolidate their shareholdings held under multiple folios. This facilitates one-stop tracking of all corporate benefits on the shares and would reduce time and efforts required to monitor multiple folios. It will also help in avoidance of multiple mailing. iii) Confidentiality of security details Folio Nos./DP ID/Client ID should not be disclosed to any unknown persons. Signed delivery instruction slips should not be given to any unknown persons. iv) Dealing with Registered Intermediaries through Members registered intermediary. In case the intermediary does not act professionally, Members can take up the matter with SEBI. transact should a v) Obtain documents relating to purchase and sale of securities A valid Contract Note/Confirmation Memo should be obtained from the broker/sub-broker, within 24 hours of execution of the trade. It should be ensured that the Contract Note/Confirmation Memo contains order no., trade no., trade time, quantity, price and brokerage. vi) Prevention of Frauds There is a possibility of fraudulent transactions relating to folios which lie dormant. Hence, we urge you to exercise diligence and notify the Company of any change in address, as and when required. vii) Weblinks policies Corporate are Company’s website the on https://www.tatapower.com/corporate/policies.aspx. of available and Charters at 227 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm As required by the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, I affirm that Board Members and the Senior Management Personnel have confirmed compliance with the Codes of Conduct, as applicable to them, for the year ended 31st March 2020. DECLARATION Annexure I For The Tata Power Company Limited Praveer Sinha CEO & Managing Director DIN: 01785164 Mumbai, 19th May 2020 228 Report on Corporate GovernanceThe Tata Power Company Limited Integrated Annual Report 2019-20 Chief Executive Officer (CEO) & Chief Financial Officer (CFO) Certification Annexure II To The Board of Directors The Tata Power Company Limited We, the undersigned, in our respective capacities as Chief Executive Officer and Chief Financial Officer of The Tata Power Company Limited (“the Company”), to the best of our knowledge and belief certify that: (a) We have reviewed the financial statements and the cash flow statement for the financial year ended 31st March 2020 and to the best of our knowledge and belief, we state that: (i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; (ii) these statements together present a true and fair view of the Company’s affairs and are in compliance with the existing accounting standards, applicable laws and regulations. (b) There are no transactions entered into by the Company during the financial year, which are fraudulent, illegal or violative of the Company’s code of conduct. (c) We are responsible for establishing and maintaining internal controls and for evaluating the effectiveness of the same over the financial reporting of the Company and have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies. (d) We have indicated, based on our most recent evaluation, wherever applicable, to the Auditors and Audit Committee: (i) significant changes, if any, in the internal control over financial reporting during the year; (ii) significant changes, if any, in the accounting policies made during the year and that the same has been disclosed in the notes to the financial statements; and (iii) instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company’s internal control system over financial reporting. Mumbai, 19th May 2020 Praveer Sinha CEO & Managing Director (DIN:01785164) R. N. Subramanyam Chief Financial Officer 229 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Practicing Company Secretaries’ Certificate on Corporate Governance CORPORATE GOVERNANCE COMPLIANCE CERTIFICATE Annexure III To The Members, The Tata Power Company Limited We have examined the compliance of conditions of Corporate Governance by The Tata Power Company Limited (“the Company”) for the year ended on March 31, 2020, as stipulated in Regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of Regulation 46 and Para C, D and E of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, and representations made by the management, we certify that the Company, to the extent applicable, has complied with the conditions of Corporate Governance as stipulated in Regulations 17 to 27, clauses (b) to (i) of sub-regulation (2) of Regulation 46 and Para C, D and E of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company. For Makarand M. Joshi & Co. Makarand Joshi Partner FCS No. 5533 CP No. 3662 Peer Review No: P2009MH007000 Place: Mumbai Date: 15th May 2020 230 Report on Corporate GovernanceThe Tata Power Company Limited Integrated Annual Report 2019-20 Practicing Company Secretaries’ Certificate on Independent Directors CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS Annexure IV (Pursuant to Regulation 34 (3) and Schedule V Para C Clause (10) (i) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015) To, The Members THE TATA POWER COMPANY LIMITED We have examined the relevant disclosures provided by the Directors (as enlisted in Table A) to THE TATA POWER COMPANY LIMITED having CIN L28920MH1919PLC000567 and having registered office at Bombay House, 24, Homi Mody Street, Mumbai, Maharashtra, 400001 (hereinafter referred to as ‘the Company’) for the purpose of issuing this Certificate, in accordance with Regulation 34 (3) read with Schedule V Para C clause 10 (i) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. In our opinion and to the best of our information and according to the verifications (including Directors Identification Number (DIN) status at the portal www.mca.gov.in) as considered necessary and based on the disclosures of the Directors, we hereby certify that none of the Directors on the Board of the Company (as enlisted in Table A) have been debarred or disqualified from being appointed or continuing as Directors of the companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs or any such other Statutory Authority for the period ended as on March 31, 2020. Sl. No. Name of the Directors Director Identification Number Date of appointment in the Company Table A 00121863 00207746 01682810 01260274 06466854 01922717 02144558 00120029 00070477 01785164 11/02/2017 14/10/2016 14/10/2016 14/10/2016 04/05/2017 24/08/2017 17/11/2017 17/11/2017 02/05/2019 01/05/2018 1. 2. 3. 4. 5. 6. 7. 8. 9. Mr. Chandrasekaran Natarajan Ms. Anjali Bansal Ms. Vibha Padalkar Mr. Sanjay Bhandarkar Mr. Kesava Chandrasekhar Mr. Hemant Bhargava Mr. Saurabh Agrawal Mr. Banmali Agrawala Mr. Ashok Sinha 10. Mr. Praveer Sinha For Makarand M. Joshi & Co. Practicing Company Secretaries Kumudini Bhalerao Partner FCS No. 6667 CP No. 6690 Place: Mumbai Date: 19th May 2020 UDIN: F006667B000258952 231 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Business Responsibility Report Tata Power believes in conducting its business activities in an environmentally and socially responsible manner. Your commitment to sustainability is showcased through a robust foundation of Corporate Governance, which strengthens social and environmental stewardship of your Company. Tata Power’s vision is to ‘Empower a billion lives through sustainable, affordable and innovative energy solutions’. This clearly showcases the interdependence of your Company's business activities with the environment and community. Your Company's practice towards social responsibility and environmental stewardship also incorporates SCALE (Safety, Care, Agility, Learning and Ethics) values, along with key elements and principles of the National Voluntary Guidelines (NVG). The Business Responsibility Report (BRR) is aligned with National Voluntary Guidelines (NVGs) on Social, Environmental and Economic Responsibilities of Business, issued by Ministry of Corporate Affairs, and is in accordance with clause (f) of sub regulation (2) of regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Your Company's Business Performance and Impacts are disclosed based on the 9 Principles as mentioned in the NVGs Principle 1 Principle 2 Ethics Transparency & Accountability Product Life Cycle Sustainability Principle 3 Employee Well-Being Principle 4 Stakeholder Engagement Principle 5 Human Rights Principle 6 Environment Principle 7 Policy Advocacy Principle 8 Inclusive Growth and Equitable Development Principle 9 Customer Value Creation Section A: General Informaton about the Company Corporate Identity Number (CIN) of the company L28920MH1919PLC000567 Name of the company Registered address Website E-mail ID The Tata Power Company Limited Bombay House, 24, Homi Mody Street, Mumbai – 400 001 www.tatapower.com tatapower@tatapower.com Financial Year reported 2019-20 Sector(s) that the Company is engaged in (industrial activity code-wise) ITC Code: N/A Sector Description: Power, Electronic Products and Technical Services List three key products/services that the Company manufactures/ provides (as in Balance Sheet) 1. Power through Conventional and Renewable Generation 2. Transmission and Distribution of electricity 3. Next Generation Power Solutions - Solar Rooftop, EV Charging infrastructure, Home Automation and Microgrids 1. 2. 3. 4. 5. 6. 7. 8. 232 Business Responsibility ReportThe Tata Power Company Limited Integrated Annual Report 2019-20 9. Total number of locations where business activity is undertaken by the Company a. b. Number of International Locations (Provide details of major 5): Singapore, Georgia, Zambia, Indonesia and Bhutan Number of National Locations: Tata Power has 117 locations. The operational status as on 31st March 2020 are given below: States Maharashtra Delhi Gujarat Karnataka Rajasthan Tamil Nadu Jharkhand Andhra Pradesh Madhya Pradesh West Bengal Odisha Bihar Haryana Punjab Telangana Uttar Pradesh Uttarakhand No. of Project locations 4 2 18 13 1 6 11 2 33 2 1 10 6 3 2 2 1 Hydros Wind 1 3 6 1 1 9 4 2 Solar 3 2 15 6 1 3 10 1 18 1 5 4 3 1 2 10. Markets served by the Company: Delhi License Area Andhra Pradesh Bihar Delhi Gujarat Haryana Jharkhand Uttarakhand Local/ State/ National Mumbai License Area Jharkhand (Jamshedpur Circle) Madhya Pradesh Maharashtra Odisha Punjab Rajasthan Ajmer License Area Odisha Dist. Karnataka Tamil Nadu Telangana Uttar Pradesh West Bengal Section B: Financial Details of the Company 1. 2. 3. 4. *Calculated as per Section 135 of the Companies Act, 2013 Paid up capital (INR) Total Turnover (INR) Total profit after taxes (INR) Total Spending on Corporate Social Responsibility (CSR) as percentage of Profit after taxes (%) Thermal Transmission Distribution 1 1 3 1 1 1 1 1 1 1 1 1 1 International Singapore Georgia Zambia Bhutan Indonesia ₹ 271 crore ₹ 7,075 crore ₹ 148 crore 2%* List of activities in which expenditure in the above has been incurred Tata Power undertook CSR initiatives in alignment with the 5 Thrust areas as outlined in the CSR Policy. Tata Power (Standalone) CSR Initiatives covered 14.06 lakh beneficiaries across 225 locations in Maharashtra, Gujarat, Jharkhand and West Bengal. The Initiatives are aligned to 6 UNSDGs and MCA Schedule VII of Companies Act 2013. Thrust Areas Education Health and Sanitation Livelihood and Skill Building Water Financial Inclusivity Misc. & Club Enerji % Spend 16 9 43 6 4 22 The highlights of Tata Power Group Entities CSR Interventions are reported in Social and Relationship Capital section of Integrated Report (Reference Pg. 82) 233 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Section C: Other Details 1. the Company have any Subsidiary Company/ Does Companies? As on 31st March 2020, the Company had 54 subsidiaries (40 are wholly owned subsidiaries), 30 Joint Ventures (JVs) and 5 Associates. Of the subsidiaries, 3 companies have been classified as JVs under Indian Accounting Standards (Ind AS). 2. 3. Do the Subsidiary C ompany/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of such subsidiary company(s) All the Company’s subsidiaries are guided by Tata Code of Conduct (TCoC) to conduct their business in an ethical, transparent and accountable manner. The Company positively influences and encourages its subsidiaries to adopt Business Responsibility (BR) initiatives as recommended by their respective CSR Committees. All subsidiaries are aligned to the CSR Strategy and CSR Policy and implement activities under the 5 thrust areas. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with, participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities? [Less than 30%, 30- 60%, more than 60%] Tata Power collaborates with all relevant stakeholders for sustainability initiatives. The Company’s suppliers/ vendors are critical for operations and are engaged through the Responsible Supply Chain Management (RSCM) policy which covers guidance on Health & Safety, Environment, Human Rights and Ethics & Compliance. The suppliers/ vendors are required to ensure conformance to the RSCM policy in addition to the Tata Code of Conduct (TCoC). Section D: Business Responsibility Information 1. Details of Director/ Directors responsible for BR a. Details of the Director/ Directors responsible for implementation of the BR policy/ policies (BR) DIN Number 01785164 Name Mr. Praveer Sinha Designation CEO & Managing Director b. Details of BR Head DIN No. 07252909 Name Ms. Shalini Singh Designation Chief- Corp. Communications & Sustainability Contact 022 67171666 2. a. Principle-wise (as per NVGs) BR Policy/ policies (Reply in Y/N) Sl. No. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9 1 2 3 4 5 6 7 8 9 Do you have policy/policies for…. Has the policy been formulated in consultation with relevant stakeholders? Does the policy conform to any national / international standards? If yes, specify. Yes Yes Yes Tata Power policies are based on the NVG principles and also confirm to the International standards like ISO 9000, 14000, and 45001, UNGC principles, ILO principles and United Nations Sustainable Development Goals (SDGs). Has the policy been approved by the Board? If yes, has it been signed by the MD /owner/CEO/ appropriate Board Director? Policies are designed to ensure employee feedback, industry norms and legal norms are met in true spirit. The policies have been developed as per the need and are duly signed by the CEO & Managing Director. Does the Company have a specified committee of the Board/ Director/Official to oversee the implementation of the policy? The policies at Tata Power strengthen internal governance structures on compliance and beyond compliance efforts. All the policies are mapped to the respective business functions and their implementation is based on the commitment framework. The Company has set various processes to monitor the effectiveness of these policies. Indicate the link to view the policy online? https://www.tatapower.com/corporate/policies.aspx Has the policy been formally communicated to all relevant internal and external stakeholders? Does the Company have in-house structure to implement its policy/policies? Does the Company have a grievance redressal mechanism related to the policy / policies to address stakeholders’ grievances related to policy/policies? Yes Yes Yes 10 Has the Company carried out independent audit/ evaluation of the working of this policy by an internal or external agency? Policies are reviewed periodically for their implementation based on the commitment framework and related risk controls are set in place. Policies related to workforce benefits and wellbeing are co-created, in which employees’ inputs are taken and incorporated in the policy building process. These inputs along with internal and external benchmarking, form the pillars of policy 234 Business Responsibility ReportThe Tata Power Company Limited Integrated Annual Report 2019-20 3. Governance related to BR a. Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year. Sustainability performance at Tata Power represents a long-standing Board agenda, consistently monitored by the Board CSR Committee and Apex Leadership. the With CSR committee also recommends the activities to be undertaken by the Company as specified in Schedule VII to the Act or prescribed by the rules. quarterly meetings, established Principle 2 (P2): Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle 1. List up to 3 products or services whose design has incorporated social or environmental concerns, risks, and/or opportunities. The future of energy infrastructure – Manufactured Capital (Reference Pg. 46, 49, 51) build our Strengthening sustainable societies – Social & Relationship Capital (Reference Pg. 75, 95) communities to 2. Apex leadership SBU Heads Corporate Sustainability Team Sustainability SPOCs Thermal, T&D, Hydros, Renewables, HR, CSR, Ethics, IA&RM, Environment etc. ii. Fig. Sustainability Governance Structure For each such product, provide the following details in respect of resource use (energy, water, raw material etc.) per unit of product (optional): i. the previous year Reduction during sourcing/production/ distribution throughout achieved since the value chain? Leading the New Energy World – Natural Capital (Reference Pg. 101, 102, 105, 108) Reduction during usage by consumers (energy, water) has been achieved since the previous year? Strengthening build sustainable societies – Social & Relationship Capital (Reference Pg. 78, 95) communities our to b. Does frequently the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How is published? Yes, Tata Power is publishing an Integrated Annual Report for FY20 based on the IIRC framework. The Company also published Sustainability Reports in previous years in accordance with Global Reporting Initiative (GRI) standards annually. These reports can be viewed at https://www.tatapower.com it Section E: Principle-Wise Performance Principle 1 (P1): Businesses should conduct and govern themselves with Ethics, Transparency and Accountability 1. Does the policy relating to ethics, bribery and corruption cover only the company? Yes/ No. Does it extend to the Group/Joint Ventures/ Suppliers/ Contractors/NGOs /Others? Leadership with a difference - Corporate Governance (Reference Pg. 16) 3. Does the Company have procedures in place for sustainable sourcing (including transportation)? Strengthening our communities to build sustainable societies – Social & Relationship Capital (Reference Pg. 81) 4. Has the Company taken any steps to procure goods and services from local & small producers, including communities surrounding their place of work? If yes, what steps have been taken to improve their capacity and capability of local and small vendors? Strengthening build our sustainable societies – Social & Relationship Capital (Reference Pg. 81, 90, 94) communities to 5. Does the Company have mechanism to recycle products and waste? If yes, what is the percentage of recycling waste and products? Leading the New Energy World – Natural Capital (Reference Pg. 108) 2. How many stakeholders’ complaints have been received in the past financial year and what percentage was satisfactorily resolved by the management? If so, provide details thereof, in about 50 words or so. Leadership with a difference - Corporate Governance (Reference pg. 17) Principle 3 (P3): Businesses should promote the wellbeing of all employees 1. Please indicate the total number of employees. Engaged, agile, future ready workforce – Human Capital (Reference Pg. 60) 235 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 2. 3. 4. Please indicate the total number of employees hired on temporary/ contractual/casual basis. Engaged, agile, future ready workforce – Human Capital (Reference Pg. 60) indicate the number of permanent Please women employees. Engaged, agile, future ready workforce – Human Capital (Reference Pg. 60) Please indicate the number of permanent employees with disability. Engaged, agile, future ready workforce – Human Capital (Reference Pg. 60) 5. Do you have an employee association that is recognised by management? Engaged, agile, future ready workforce – Human Capital (Reference Pg. 66) Stakeholder Engagement (Reference Pg. 25) 6. What percentage of your permanent employees are a member of this recognised employee association? Engaged, agile, future ready workforce – Human Capital (Reference Pg. 66) 7. Please indicate the Number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in the last financial year and pending, as on the end of the financial year. Engaged, agile, future ready workforce – Human Capital (Reference Pg. 66) Leadership with a difference - Corporate Governance (Reference Pg. 17) 8. What percentage of your employees were given safety & skill up-gradation training in the last year? Engaged, agile, future ready workforce – Human Capital (Reference Pg. 63, 64, 65) Principle 4 (P4): Businesses should respect the interests of, and be responsive to the needs of all stakeholders, especially those who are disadvantaged, vulnerable, and marginalised. 1. Has the Company mapped internal and its external stakeholders? Trust with transparent communications – Stakeholder Engagement (Reference Pg. 24, 25) 236 2. Out of the above, has the Company identified the disadvantaged, vulnerable & marginalised stakeholders? Strengthening our communities to build sustainable societies – Social & Relationship Capital (Reference Pg. 94) 3. Are there any special initiatives taken by the Company to engage with the disadvantaged, vulnerable, and marginalised stakeholders? If so, provide details thereof, in about 50 words or so. Strengthening our communities to build sustainable societies – Social & Relationship Capital (Reference Pg. 94) Principle 5 (P5): Businesses should respect and promote human rights. 1. Does the policy of the company on human rights cover only the Company or extend to the Group/ Joint Ventures/Suppliers/Contractors/NGOs/Others? Engaged, agile, future ready workforce – Human Capital (Reference Pg. 66) 2. How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily resolved by the management? Engaged, agile, future ready workforce – Human Capital (Reference Pg. 66) Principle 6 (P6): Business should respect, protect, and make efforts to restore the environment 1. Does the policy related to Principle 6 cover only the Company or extends to the Group/Joint Ventures/ Suppliers/Contractors/NGOs/others? Leading the New Energy World – Natural Capital (Reference Pg. 100) Strengthening our communities to build sustainable societies – Social & Relationship Capital (Reference Pg. 81) for 2. Does the Company have strategies/initiatives to address global environmental issues such as climate change, global warming, etc.? In alignment with global goals – Tata Power’s Commitment to UNSDGs (Reference Pg. 30, 31) Our blueprint (Reference Pg. 23) The future of energy infrastructure – Manufactured Capital (Reference Pg. 46, 49, 50) build Strengthening sustainable societies – Social & Relationship Capital (Reference Pg. 78, 79, 95) Leading the New Energy World – Natural Capital (Reference Pg. 101) future – Our Strategy communities our the to Business Responsibility ReportThe Tata Power Company Limited Integrated Annual Report 2019-20 3. Does the Company identify and assess potential environmental risks? Building a future ready business – Risk Management (Reference Pg. 35) 4. Does the Company have any project related to Clean Development Mechanism? If so, provide details thereof, in about 50 words or so. Also, if Yes, whether any environmental compliance report is filed? The future of energy infrastructure – Manufactured Capital (Reference Pg. 47) 5. Has the Company undertaken any other initiatives on – clean technology, energy efficiency, renewable energy, etc.? Y/N. Driving change through innovation – Intellectual Capital (Reference Pg. 56) 6. Are the Emissions/Waste generated by the Company within the permissible limits given by CPCB/SPCB for the financial year being reported? Leading the New Energy World – Natural Capital (Reference Pg. 100) 7. Number of show cause/ legal notices received from CPCB/SPCB which are pending (i.e. not resolved to satisfaction) as on end of Financial Year. Leadership with a difference - Corporate Governance (Reference Pg. 17) Principle 7 (P7): Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner 1. Is your Company a member of any trade and chamber or association? If Yes, Name only those major ones that your business deals with: A leading market disruptor in sustainable energy – Business at a glance (Reference Pg. 10) Annexure I – Our Industry Associations (Reference Pg. 128) 2. Have you through advocated/lobbied above associations for the advancement or improvement of public good? Yes/No; if yes specify the broad areas (drop box: Governance and Administration, Development Economic Policies, Energy security, Water, Food Security, Sustainable Business Principles, Others) Leadership with a difference - Corporate Governance (Reference Pg. 17) Reforms, Inclusive Principle 8 (P8): Businesses should support inclusive growth and equitable development 1. Does the Company have specified programmes/ initiatives/projects in pursuit of the policy related to Principle 8? If yes details thereof. Strengthening our communities to build sustainable societies – Social & Relationship Capital (Reference Pg. 90) 2. Are the programmes/projects undertaken through foundation/external NGO/ in-house Government structures/any other organisation? Strengthening our communities to build sustainable societies – Social & Relationship Capital (Reference Pg. 82) team/own 3. Have you done any impact assessment of your initiative? Strengthening our communities to build sustainable societies – Social & Relationship Capital (Reference Pg. 83) 4. What is your Company’s direct contribution to community development projects-Amount in INR and the details of the projects undertaken? Strengthening our communities to build sustainable societies – Social & Relationship Capital (Reference Pg. 82) 5. Have you taken steps to ensure that this community is successfully adopted development by the community? Strengthening our communities to build sustainable societies – Social & Relationship Capital (Reference Pg. 83) initiative Principle 9 (P9): Businesses should engage with and provide value to their customers and consumers in a responsible manner 1. What percentage of customer complaints/consumer cases are pending as on the end of financial year? build Strengthening sustainable societies – Social & Relationship Capital (Reference Pg. 72, 80) communities our to 2. Does the Company display product information on the product label, over and above what is mandated as per local laws? Strengthening our communities to build sustainable societies – Social & Relationship Capital (Reference Pg. 73) 3. Is there any case filed by any stakeholder against the Company regarding unfair trade practices, irresponsible advertising and/or anti-competitive behavior during the last five years and pending as on end of financial year? Leadership with a difference - Corporate Governance (Reference Pg. 17) 4. Did your Company carry out any consumer survey/ consumer satisfaction trends? Strengthening build sustainable societies – Social & Relationship Capital (Reference Pg. 72, 73) communities our to 237 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Independent Auditor's Report To the Members of The Tata Power Company Limited Report on the Audit of the Standalone Financial Statements Opinion We have audited the accompanying standalone Ind AS financial statements of The Tata Power Company Limited (“the Company”), which comprise the Balance Sheet as at March 31 2020, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone Ind AS financial statements, including a summary of significant accounting policies and other explanatory information. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2020, its profit including other comprehensive loss, its cash flows and the changes in equity for the year ended on that date. Basis for Opinion We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor’s Responsibilities for the Audit of the Standalone Ind AS Financial Statements’ section of our report. We are independent of the Company in accordance with the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone Ind AS financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements for the financial year ended March 31, 2020. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the ‘Auditor’s Responsibilities for the Audit of the Standalone Ind AS Financial Statements’ section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements. 238 Independent Auditor's ReportThe Tata Power Company Limited Integrated Annual Report 2019-20 How our audit addressed the key audit matter Key audit matters Revenue recognition and accrual of regulatory deferrals (as described in Note 19 and Note 30 of the standalone financial statements) In the regulated generation, transmission and distribution business of the Company, the tariff is determined by the regulator on cost plus return on equity basis wherein the cost is subject to prudential norms. The Company invoices its customers on the basis of pre-approved tariff which is based on budget and is subject to true up. • Considered the Company's accounting policies with respect to accrual of regulatory deferrals and assessing Ind AS 114 “Regulatory Deferral compliance with Accounts” from Ind AS and Contract with Customers”. Our procedures included, amongst others, the following: “Revenue 115 The Company recognizes revenue on the basis of tariff invoiced to customers. As the Company is entitled to a fixed return on equity, the Company recognizes accrual for the shortage / excess compared to the entitled return on equity. The Company has recognized ` 1,121.53 crore for generation and transmission business and ` 258.32 crore for distribution business as accruals as at March 31, 2020. • • Accruals are determined based on tariff regulations and past tariff orders and are subject to verification and approval by the regulators. Further the costs incurred are subject to prudential checks and prescribed norms. Significant judgements are made in determining the accruals including interpretation of tariff regulations. Further certain disallowances of claims have been litigated by the Company before higher authorities. Revenue recognition and accrual of regulatory deferrals is a key audit matter considering the significance of the amount and significant judgements involved in the determination. Performed test of controls over revenue recognition and accrual of regulatory deferrals through inspection of evidence of performance of these controls. Performed the tests of details including the following key procedures: • the key assumptions used by Evaluated the Company by comparing it with prior years, past precedents and the opinion of management’s expert. • Considered the independence, objectivity and competence of management’s expert. • For tariff orders received by the Company, assessed the impact recognized by the Company and for matters litigated by the Company, also assessed the management’s evaluation of the likely outcome of the dispute based on past precedents and / or advice of management’s expert. • Assessed the disclosures requirements of Accounts” and Contract with Customers”. in accordance with the Ind AS 114 “Regulatory Deferral from Ind AS “Revenue 115 Recognition and Measurement of Deferred Tax (as described in Note 35 of the standalone financial statements) The Company has recognized Minimum Alternate Tax (MAT) credit receivable of ` 437.51 crores as at March 31, 2020. The Company also has recognized deferred tax assets of ` 379.97 crores on long term capital loss on sale of investments. • Considered Company's accounting policies with respect to recognition and measurement of tax balances in accordance with Ind AS 12 “Income Taxes” Our procedures included, amongst others, the following: Further, pursuant to the Taxation Laws (Amendment) Act, 2019 (new tax regime), the Company has remeasured its deferred tax balances expected to reverse after the likely transition to new tax regime, at the rate specified in the new tax regime and has recognized a net gain of `v275.00 crores. • • Performed test of controls over recognition and measurement of tax balances through inspection of evidence of performance of these controls. Performed the tests of details including the following key procedures: The recognition and measurement of MAT credit receivable and deferred tax balances; is a key audit matter as the recoverability of such credits within the allowed time frame in the manner prescribed under tax regulations and estimation of year of transition to the new tax regime involves significant estimate of the financial projections, availability of sufficient taxable income in the future and significant judgements in the interpretation of tax regulations and tax positions adopted by the Company. • tax Involved the Company’s tax positions basis the tax law and also by comparing it with prior years and past precedents. specialists who evaluated • Discussed the future business plans and financial projections with the management. • Assessed the management’s long term financial projections and the key assumptions used in the projections by comparing it to the approved business plan, projections used for estimation of likely year of transition to the new tax regime and projections used for impairment assessment where applicable. • Assessed the disclosures in accordance with the requirements of Ind AS 12 “Income Taxes”. 239 OverviewStatutory ReportsFinancial StatementsFuture ready for smart choicesOur Emphasis on ValueOur Value-creation Paradigm Impairment of assets (as described in Note 5 and Note 7 of the standalone financial statements) At the end of every reporting period, the Company assesses whether there is any indication that an asset or cash generating unit (CGU) may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset or CGU. The determination of recoverable amount, being the higher of fair value less costs to sell and value-in-use involves significant estimates, assumptions and judgements of the long term financial projections. The Company is carrying impairment provision amounting to ` 3,555.00 crores with respect to Mundra CGU (comprising of investment in companies owning Mundra power plant, coal mines and related infrastructure), ` 446.09 crores for investment in company owning hydro power plant in Georgia and ` 100.00 crores with respect to a generating unit in Trombay. During the year, as the indication exists, the Company has reassessed its impairment assessment with respect to the specified CGUs. significance of Impairment of assets is a key audit matter considering the term estimation and the significant judgements involved in the impairment assessment. the carrying value, long Our procedures included, amongst others, the following: • Considered the Company's accounting policies with respect to impairment in accordance with Ind AS 36 “Impairment of assets”. • • Performed test of controls over impairment process evidence of performance through inspection of of these controls. Performed the tests of details including the following key procedures: • Obtained the management’s impairment assessment. • Evaluated the key assumptions including projected generation, coal prices, exchange rate, energy prices post power purchase agreement period and weighted average cost of capital by comparing them with prior years and external data, where available. • Obtained and evaluated the sensitivity analysis. • Assessed the disclosures in accordance with Ind AS 36 “Impairment of assets”. Going Concern Assessment (as described in Note 42.4.3 of the standalone financial statements) Our procedures included, amongst others, the following: • Obtained an understanding of the process and tested the internal controls associated with the management’s assessment of Going Concern assumption. • Discussed with management and assessed judgements and estimates used the in assumptions, assessment having to past performance and current emerging business trends affecting the business and industry. regards • Assessed the Company’s ability to refinance its obligation based on the past trends, credit ratings, ability to generate cash flows and access to capital. • Assessed the adequacy of the disclosures in the standalone Ind AS financial statements. The Company has current liabilities of ` 10,550.18 crores and current assets of ` 2,989.86 crores as at March 31, 2020. Current liabilities exceeds current assets as at the year end. Given the nature of its business i.e. contracted long term power supply agreements and a significant composition of cost plus contracts leading to significant stability of cashflows and profitability, management is confident of refinancing and consider the liquidity risk as low and accordingly, the Company uses significant short term borrowings to reduce its borrowing costs. Management has made an assessment of the Company’s ability to continue as a Going Concern as required by Ind AS 1 Presentation of Financial Statements considering all the available information and has concluded that the going concern basis of accounting is appropriate. Going Concern assessment has been identified as a key audit matter considering the significant judgements and estimates involved its dependence upon management’s ability to complete the planned divestments, raising long term capital and / or successful refinancing of certain current financial obligations. in the assessment and 240 Independent Auditor's ReportThe Tata Power Company Limited Integrated Annual Report 2019-20 Other Information The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone Ind AS financial statements and our auditor’s report thereon. Our opinion on the standalone Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the standalone Ind AS financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of Management for the Standalone Financial Statements The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive loss, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the standalone Ind AS financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Standalone Financial Statements Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone Ind AS financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • • • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the standalone Ind AS financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. Those Board of Directors are also responsible for overseeing the Company’s financial reporting process. • Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the 241 OverviewStatutory ReportsFinancial StatementsFuture ready for smart choicesOur Emphasis on ValueOur Value-creation Paradigm disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements for the financial year ended March 31, 2020 and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on Other Legal and Regulatory Requirements As required by the Companies (Auditor’s Report) Order, 1. 2016 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure 1” a statement on the matters specified in paragraphs 3 and 4 of the Order. 2. As required by Section 143(3) of the Act, we report that: (a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; (b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books; The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account; In our opinion, standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 the aforesaid (c) (d) 242 (e) (f) (g) (h) of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended; On the basis of the written representations received from the directors as on March 31, 2020 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2020 from being appointed as a director in terms of Section 164 (2) of the Act; With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report; In our opinion, the managerial remuneration for the year ended March 31, 2020 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act; With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us: i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements – Refer Note 38 to the standalone Ind AS financial statements; ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on including long-term contracts derivative contracts – Refer Note 18 to the standalone financial statements; iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company. For S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E/E300003 Mumbai Date: May 19, 2020 per Abhishek Agarwal Partner Membership Number: 112773 UDIN: 20112773AAAACW7931 Independent Auditor's ReportThe Tata Power Company Limited Integrated Annual Report 2019-20 Independent Auditor’s Annexure 1 to the in paragraph 1 under Report referred to the heading ‘Report on Other Legal and Regulatory Requirements’ of our report of even date on the standalone financial statements of The Tata Power Company Limited (iii) (a) The Company has granted loans to thirteen companies covered in the register maintained under section 189 of the Companies Act, 2013. In our opinion and according to the information and explanations given to us, the terms and conditions of the grant of such loans are not prejudicial to the Company's interest. (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (iii) (i) (i) (b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No such material discrepancies were noticed on verification. (iii) (c) (c) According to the information and explanations given by the management, the title deeds of in property, immovable properties plant and equipment are held in the name of the Company, except for: included (iv) aggregating to immovable properties ` 0.88 crore acquired during merger of Chemical Terminal Trombay Limited in the earlier year for which registration of title of deeds is in progress; (b) The Company has granted loans to thirteen companies covered in the register maintained under section 189 of the Companies Act, 2013. The schedule of repayment of principal and payment of interest has been stipulated for the loans granted and the repayment/receipts are regular. There are no amounts of loans granted to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013 which are overdue for more than ninety days. In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Companies Act, 2013 in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made, guarantees and securities given have been complied with by the Company. immovable properties to ` 8.01 crore acquired in earlier years for which registration of title of deeds is in progress; aggregating (v) immovable properties aggregating to ` 27.57 crore for which the title deed is in dispute and pending resolution as at March 31, 2020; The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable. a. b. c. Further registration of title deed is in progress in respect of leasehold land classified under Asset held for sale aggregating to ` 215.56 crore (Gross value ` 225.65 crore). According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are pledged with the banks and not available with the Company as described in note 22 of standalone financials statements. The same has not been independently confirmed by the bank and hence we are unable to comment on the same. (vi) (ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification. We are informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal, Reserve Bank of India or any Court or any other Tribunal. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to generation of electricity and arms and ammunitions, electricals or electronic machinery and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same. 243 OverviewStatutory ReportsFinancial StatementsFuture ready for smart choicesOur Emphasis on ValueOur Value-creation Paradigm (vii) According to the information and explanations given to us in respect of statutory dues: (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees’ state income-tax, goods and service tax, duty of custom, cess and other statutory dues applicable to it. insurance, (b) No undisputed amounts payable in respect of provident fund, employees’ state insurance, income tax, service tax, sales tax, custom duty, excise duty, value added tax, goods and service tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable. (c) According to the records of the Company, the dues of income tax, sales tax, service tax, custom duty, excise duty, value added tax and cess on account of any dispute are as follows: Name of Statute Nature of dues (` Crores) The Customs Act, 1962 Customs Duty 34.43 Period to which amount relates 2011-12 and 2012-13 2004-05 to 2005-06 2004-05 to 2005-06 and 2009-10 1993-94 to 1995-96 2009-10 3.60 1.37 0.81 1.13 8.99 1.08 100.19 50.19 2008-09 2009-10 2011-12 – 2014-15 2016-17 Forum where the dispute is pending The Customs Excise and Service Tax Appellate Tribunal (CESTAT) CESTAT Principal Commissioner of Customs CESTAT Chairman, Maharashtra Pollution Control Board (MPCB) Income Tax Appellate Tribunal Commissioner of Income Tax (Appeals) High Court CESTAT Joint Commissioner (Appeals) The Central Excise Act, 1944 The Water (Prevention & Control of Pollution) Cess Act, 1977 Income Tax Act, 1961 Excise Duty Cess Income Tax Tax deducted at source The Finance Act, 1994 Service Tax 375.29 5.86 0.25 July 2012 to June 2017 2011-12 to 2014-15 2007-08 244 Independent Auditor's ReportThe Tata Power Company Limited Integrated Annual Report 2019-20 (viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to a financial institution, bank or government or dues to debenture holders. (xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the standalone Ind AS financial statements, as required by the applicable accounting standards. (ix) In our opinion and according to the information and explanations given by the management, the Company has utilized the monies raised by way of debt instruments in the nature of debentures and term loans for the purposes for which they were raised. According to the information and explanations given by the management, the Company has not raised any money by way of initial public offer or further public offer. (xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon. (x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the standalone Ind AS financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year. (xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013. (xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company. (xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013. (xii) In our opinion, the Company is not a Nidhi company. Therefore, the Order are not applicable to the Company and hence not commented upon. the provisions of clause 3(xii) of For S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E/E300003 per Abhishek Agarwal Partner Membership Number: 112773 UDIN: 20112773AAAACW7931 Mumbai Date: May 19, 2020 245 OverviewStatutory ReportsFinancial StatementsFuture ready for smart choicesOur Emphasis on ValueOur Value-creation Paradigm Annexure 2 to the Independent Auditor’s Report of even date on the Standalone Financial Statements of The Tata Power Company Limited Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013, as amended (“the Act”) We have audited the internal financial controls over financial reporting of The Tata Power Company Limited (“the Company”) as of March 31, 2020 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date. Management’s Responsibility for Internal Financial Controls The Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under Act. Auditor’s Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting with reference to these standalone Ind AS financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing as specified under section 143(10) of the Act to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting with reference to these standalone Ind AS financial statements was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls 246 over financial reporting with reference to these standalone Ind AS financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these standalone Ind AS financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls over financial reporting with reference to these standalone Ind AS financial statements. to these Meaning of Internal Financial Controls Over Financial Reporting With Reference Standalone Financial Statements A company's internal financial control over financial reporting with reference to these standalone Ind AS financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting with reference to these standalone Ind AS financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the standalone Ind AS financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting With Reference to these Standalone Financial Statements Because of the inherent limitations of internal financial controls over financial reporting with reference to these standalone Ind AS financial statements, including the possibility of collusion improper management override of controls, material or misstatements due to error or fraud may occur and not be Independent Auditor's ReportThe Tata Power Company Limited Integrated Annual Report 2019-20 detected. Also, projections of any evaluation of the internal financial controls over financial reporting with reference to these standalone Ind AS financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone Ind AS financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting with reference to these standalone Ind AS financial statements and such internal financial controls over financial reporting with reference to these standalone Ind AS financial statements were operating effectively as at March 31, 2020, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the Institute of Chartered Accountants of India. For S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E/E300003 per Abhishek Agarwal Partner Membership Number: 112773 UDIN: 20112773AAAACW7931 Mumbai Date: May 19, 2020 247 OverviewStatutory ReportsFinancial StatementsFuture ready for smart choicesOur Emphasis on ValueOur Value-creation Paradigm Standalone Balance Sheet as at 31st March, 2020 ASSETS Non-current Assets (a) Property, Plant and Equipment (b) Capital Work-in-Progress (c) Intangible Assets (d) Financial Assets (i) Investments (ii) Trade Receivables (iii) Loans (iv) Finance Lease Receivables (v) Other Financial Assets (e) Non-current Tax Assets (Net) (f) Other Non-current Assets Total Non-current Assets Current Assets (a) Inventories (b) Financial Assets (i) Investments (ii) Trade Receivables (iii) Unbilled Revenue (iv) Cash and Cash Equivalents (v) Bank Balances other than (iv) above (vi) Loans (vii) Finance Lease Receivables (viii) Other Financial Assets (c) Other Current Assets Total Current Assets Assets Classified as Held For Sale Total Assets before Regulatory Deferral Account Regulatory Deferral Account - Assets TOTAL ASSETS EQUITY AND LIABILITIES Equity (a) Equity Share Capital (b) Unsecured Perpetual Securities (c) Other Equity Total Equity 248 Notes Page As at 31st March, 2020 K crore As at 31st March, 2019 K crore 5 6 7 8 9 10 11 12 13 262 265 267 272 273 275 276 277 277 7,974.07 7,545.96 402.87 62.22 368.10 83.89 21,327.20 21,270.77 Nil 42.10 553.03 222.77 135.00 1,009.64 185.76 51.35 554.27 2.89 68.65 977.10 31,728.90 31,108.74 14 279 635.01 579.51 15 8 16 17 9 10 11 13 279 272 280 281 273 275 276 277 18a. 281 20.00 1,108.68 83.41 158.54 20.40 550.09 31.89 235.58 146.26 42.00 1,256.44 41.56 75.94 19.85 119.20 37.58 96.06 952.11 2,989.86 2,639.40 3,220.25 2,806.59 37,358.16 37,135.58 19 284 258.32 999.00 37,616.48 38,134.58 20a. 20b. 21 285 286 287 270.50 1,500.00 270.50 1,500.00 13,491.47 13,919.10 15,261.97 15,689.60 Standalone Ind AS Statement of Profit and Lossfor the year ended 31st March, 2020The Tata Power Company Limited Integrated Annual Report 2019-20 Standalone Balance Sheet as at 31st March, 2020 (Contd.) Liabilities Non-current Liabilities (a) Financial Liabilities (i) Borrowings (ii) Lease Liabilities (iii) Trade Payables small enterprises (iv) Other Financial Liabilities (b) Deferred Tax Liabilities (Net) (c) Provisions (d) Other Non-current Liabilities Total Non-current Liabilities Current Liabilities (a) Financial Liabilities (i) Borrowings (ii) Lease Liabilities (iii) Trade Payables (a) Total outstanding dues of micro enterprises and small enterprises 36 314 (b) Total outstanding dues of trade payables other than micro enterprises and Notes Page As at 31st March, 2020 K crore As at 31st March, 2019 K crore 22 23 289 292 9,825.33 237.03 Nil Nil 14.60 307.25 222.46 161.34 24 25 26 27 293 293 294 302 8,749.72 Nil Nil 22.75 42.76 583.49 195.55 183.54 10,768.01 9,777.81 28 23 302 292 6,212.31 41.82 6,731.80 Nil (a) Total outstanding dues of micro enterprises and small enterprises 36 314 7.72 3.96 (b) Total outstanding dues of trade payables other than micro enterprises and small enterprises (iv) Other Financial Liabilities (b) Current Tax Liabilities (Net) (c) Provisions (d) Other Current Liabilities Total Current Liabilities 24 29 26 27 293 302 294 302 994.15 2,621.62 107.67 62.02 502.87 1,098.18 2,895.43 107.67 14.74 849.12 10,550.18 11,700.90 Liabilities directly associated with Assets Classified as Held For Sale 18b. 282 1,036.32 966.27 Total Liabilities before Regulatory Deferral Account Regulatory Deferral Account - Liability TOTAL EQUITY AND LIABILITIES 22,354.51 22,444.98 19 284 Nil Nil 37,616.48 38,134.58 See accompanying notes to the Standalone Financial Statements As per our report of even date For S R B C & CO LLP Chartered Accountants For and on behalf of the Board, PRAVEER SINHA CEO & Managing Director BANMALI AGRAWALA Director ICAI Firm Registration No.324982E/E300003 DIN 01785164 DIN 00120029 per ABHISHEK AGARWAL Partner Membership No. 112773 Mumbai, 19th May, 2020. RAMESH SUBRAMANYAM Chief Financial Officer H. M. MISTRY Company Secretary Mumbai, 19th May, 2020. 249 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Standalone Statement of Profit and Loss for the year ended 31st March, 2020 Notes Page For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 K crore I II III IV Revenue from Operations Other Income Total Income Expenses Cost of Power Purchased Cost of Fuel Transmission Charges Employee Benefits Expense (Net) Finance Costs Depreciation and Amortisation Expenses Other Expenses Total Expenses V Profit/(Loss) Before Movement in Regulatory Deferral Balance, Exceptional Items and Tax Add/(Less): Net Movement in Regulatory Deferral Balances Add/(Less): Net Movement in Regulatory Deferral Balances in respect of earlier years Add/(Less): Deferred Tax Recoverable/(Payable) VI Profit/(Loss) Before Exceptional Items and Tax Add/(Less): Exceptional Items Reversal of Impairment of Non-current Investments and related obligation Standby Litigation Remeasurement of Deferred Tax Recoverable on account of New Tax Regime (Net) Provision for Contingencies Gain on Sale of Investment in Associates VII Profit/(Loss) Before Tax VIII Tax Expense/(Credit) Current Tax Deferred Tax Deferred Tax relating to earlier years Remeasurement of Deferred Tax on account of New Tax Regime (Net) 30 31 303 307 39b. 316 32 33 5 & 6 34 19 19 3.11.3 7 39a. 35 39b. 18a. 35 35 35 35 308 308 262 309 284 284 261 267 316 310 316 281 310 310 310 310 IX Profit/(Loss) for the Year from Continuing Operations X Profit/(Loss) before tax from Discontinued Operations 18c. 282 7,726.39 582.62 8,309.01 457.59 2,765.61 214.00 610.71 8,255.25 516.35 8,771.60 457.02 3,168.27 248.23 637.57 1,510.38 1,500.35 685.75 756.69 632.70 801.87 7,000.73 7,446.01 1,308.28 (792.24) (21.32) 162.16 (651.40) 656.88 235.00 (276.35) (265.00) Nil Nil (306.35) 350.53 18.61 73.08 (24.51) (275.00) (207.82) 558.35 (81.64) 1,325.59 (519.03) 274.26 98.19 (146.58) 1,179.01 Nil Nil Nil (45.00) 1,212.99 1,167.99 2,347.00 110.88 331.58 10.00 Nil 452.46 1,894.54 (191.82) Impairment Loss related to Discontinued Operations on remeasurement to Fair Value 18c. 282 (361.00) Nil XI Tax Expense/(Credit) of Discontinued Operations Current Tax Deferred Tax Tax Expense/(Credit) of Discontinued Operations XII Profit/(Loss) for the Year from Discontinued Operations 18c. 282 XIII Profit/(Loss) for the Year Nil (32.41) (32.41) (410.23) 148.12 (71.92) 5.94 (65.98) (125.84) 1,768.70 250 Standalone Ind AS Statement of Profit and Lossfor the year ended 31st March, 2020The Tata Power Company Limited Integrated Annual Report 2019-20 Standalone Statement of Profit and Loss for the year ended 31st March, 2020 (Contd.) Notes Page For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 K crore XIV Other Comprehensive Income/(Expenses) - Continuing Operations Add/(Less): (i) Items that will not be reclassified to profit or loss (a) Remeasurement of the Defined Benefit Plans 26 294 (b) Equity Instruments classified at FVTOCI (c) Gain on sale of Investment classified at FVTOCI (d) Assets Classified as Held For Sale - Equity Instruments classified at FVTOCI (ii) Tax relating to items that will not be reclassified to profit or loss (a) Current Tax (b) Deferred Tax 35 35 310 310 XV Other Comprehensive Income/(Expenses) - Discontinued Operations Add/(Less): (i) Items that will not be reclassified to profit or loss 26 294 (ii) Income tax relating to items that will not be reclassified to profit or loss Other Comprehensive Income/(Expenses) For The Year (Net of Tax) XVI Total Comprehensive Income for the Year (XIII + XIV+XV) XVII Basic and Diluted Earnings Per Equity Share (of J 1/- each) (J) 40 317 (i) From Continuing Operations before net movement in regulatory deferral balances (ii) From Continuing Operations after net movement in regulatory deferral balances (iii) From Discontinued Operations (iv) Total Operations after net movement in regulatory deferral balances See accompanying notes to the Standalone Financial Statements (51.79) (3.50) Nil (15.84) 0.77 17.40 (52.96) 0.20 Nil 0.20 (52.76) 95.36 3.23 1.44 (1.52) (0.08) (20.00) 0.17 0.01 (31.05) 6.99 (0.02) (43.90) (1.14) 0.40 (0.74) (44.64) 1,724.06 6.72 6.36 (0.46) 5.90 As per our report of even date For S R B C & CO LLP Chartered Accountants For and on behalf of the Board, PRAVEER SINHA CEO & Managing Director BANMALI AGRAWALA Director ICAI Firm Registration No.324982E/E300003 DIN 01785164 DIN 00120029 per ABHISHEK AGARWAL Partner Membership No. 112773 Mumbai, 19th May, 2020. RAMESH SUBRAMANYAM Chief Financial Officer H. M. MISTRY Company Secretary Mumbai, 19th May, 2020. 251 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Standalone Statement of Cash Flows for the year ended 31st March, 2020 A. Cash Flow from Operating Activities Profit/(loss) before tax from continuing operations Profit/(loss) before tax from discontinued operations Adjustments to reconcile profit before tax to net cash flows: Depreciation and amortisation expense Interest income Interest on income-tax refund Delayed payment charges Dividend income Finance cost (Net of capitalisation) (Gain)/loss on disposal of property, plant and equipment (Net) (Gain)/loss on sale/fair value of current investment measured at fair value through profit and loss (Gain)/loss on sale of non-current investments (including fair value change) Amortisation of premium paid on leasehold land Guarantee commission from subsidiaries and joint ventures Amortisation of service line contributions Transfer to Statutory Consumer Reserve Bad debts Allowance for doubtful debts and advances (Net) Gain on sale of investment in associates 685.75 (107.44) (10.96) (6.61) (368.81) 1,546.53 (0.35) (13.41) (9.06) Nil (60.63) (7.99) 17.00 6.05 2.85 Nil Reversal of impairment of non-current investments and related obligation (235.00) Impairment Loss on Remeasurement to Fair Value related to discontinued operations Effect of exchange fluctuation (Net) Working Capital adjustments: Adjustments for (increase) / decrease in assets: Inventories Trade receivables Finance lease receivables Loans - current Loans - non-current Other current assets Other non-current assets Unbilled revenue Other financial assets - current Other financial assets - non-current Regulatory deferral account - assets 252 361.00 (2.44) (34.65) (10.04) 6.93 (2.39) 9.25 141.11 123.64 (26.24) 1.18 (41.15) 740.68 For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 K crore 350.53 (442.64) 2,347.00 (191.82) 632.70 (84.91) Nil (6.34) (383.91) 1,536.68 (10.81) (6.29) (0.88) 2.64 (20.95) (7.46) 16.00 Nil 19.11 (1,212.99) Nil Nil 4.54 1,796.48 1,704.37 477.13 2,632.31 (107.14) (251.20) 17.18 (0.41) 4.09 (646.61) 270.34 66.23 (0.40) 1.10 796.37 908.32 2,612.69 149.55 2,781.86 Standalone Ind AS Statement of Profit and Lossfor the year ended 31st March, 2020The Tata Power Company Limited Integrated Annual Report 2019-20 Standalone Statement of Cash Flows for the year ended 31st March, 2020 (Contd.) Adjustments for increase / (decrease) in liabilities: Trade payables Other current liabilities Other non-current liabilities Current provisions Non-current provisions Other financial liabilities - current Other financial liabilities - non current Regulatory deferral account - liability Cash flow from/(used in) operations Income tax paid (Net of refund received) Net Cash Flows from/(used in) Operating Activities A B. Cash Flow from Investing Activities Capital expenditure on property, plant and equipment (including capital advances) Proceeds from sale of property, plant and equipment (including property, plant and equipment classified as held for sale) Purchase of non current investments Proceeds from sale of non-current investments (including investments classified as held for sale) (Purchase)/proceeds from/ to sale of current investments (Net) Interest received Delayed payment charges received Loans given Loans repaid Dividend received Guarantee commission received Bank balance not considered as cash and cash equivalents Net Cash Flow from/(used in) Investing Activities B C. Cash Flow from Financing Activities Proceeds from non-current borrowings Repayment of non-current borrowings Proceeds from current borrowings Repayment of current borrowings Interest and other borrowing costs Dividends paid Distribution on unsecured perpetual securities Increase in capital/service line contributions Payments of Lease liability (including interest) Net Cash Flow from/(used in) Financing Activities C Net increase/(decrease) in Cash and Cash Equivalents (A + B + C) Cash and Cash Equivalents as at 1st April (Opening Balance) Cash and Cash Equivalents as at 31st March (Closing Balance) For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 K crore (277.60) 139.56 0.70 (12.66) 25.03 (80.47) (24.05) Nil (34.77) (382.37) (66.98) (40.72) 24.62 (13.37) 1.38 (485.00) (229.49) 2,383.20 (74.40) 2,308.80 (705.05) 26.53 (284.11) 271.28 35.41 107.83 6.61 (3,259.41) 2,824.04 449.97 56.16 (0.25) (470.99) 3,403.59 (2,568.35) 30,776.85 (31,295.20) (1,524.17) (351.99) (171.00) 7.03 (29.34) (1,752.58) 85.23 79.86 165.09 (997.21) 1,784.65 (101.31) 1,683.34 (522.39) 32.35 (3,450.99) 2,412.77 16.29 122.36 6.34 (2,361.61) 2,623.97 548.55 18.76 (2.95) (556.55) 3,337.09 (4,729.41) 22,729.91 (20,231.28) (1,591.08) (351.99) (171.00) 11.49 Nil (996.27) 130.52 (50.66) 79.86 253 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Standalone Statement of Cash Flows for the year ended 31st March, 2020 (Contd.) Cash and Cash Equivalents include: (a) Balances with banks In current accounts (b) Bank overdraft Cash and Cash Equivalents related to Continuing Operations (a) Balances with banks In current accounts (b) Book overdraft Cash and Cash Equivalents related to Discontinued Operations Total of Cash and Cash Equivalents See accompanying notes to the Standalone Financial Statements As at 31st March, 2020 K crore As at 31st March, 2019 K crore 158.54 (1.05) 157.49 7.62 (0.02) 7.60 165.09 75.94 (2.19) 73.75 6.13 (0.02) 6.11 79.86 As per our report of even date For S R B C & CO LLP Chartered Accountants For and on behalf of the Board, PRAVEER SINHA CEO & Managing Director BANMALI AGRAWALA Director ICAI Firm Registration No.324982E/E300003 DIN 01785164 DIN 00120029 per ABHISHEK AGARWAL Partner Membership No. 112773 Mumbai, 19th May, 2020. RAMESH SUBRAMANYAM Chief Financial Officer H. M. MISTRY Company Secretary Mumbai, 19th May, 2020. 254 Standalone Ind AS Statement of Profit and Lossfor the year ended 31st March, 2020The Tata Power Company Limited Integrated Annual Report 2019-20 Standalone Statement of Change in Equity for the year ended 31st March, 2020 e r o r c D t n u o m A . 0 5 0 7 2 l i N . 0 5 0 7 2 l i N . 0 5 0 7 2 . 0 5 0 7 2 e r o r c D t n u o m A . 0 0 0 0 5 1 , l i N . 0 0 0 0 5 1 , . 0 0 0 0 5 1 , l i N . 0 0 0 0 5 1 , e r o r c D l a t o T . 3 0 8 1 7 2 1 , . 0 7 8 6 7 1 , ) 4 6 4 4 ( . . 6 0 4 2 7 1 , l i N l i N . ) 9 9 1 5 3 ( . ) 0 0 1 7 1 ( . 0 1 9 1 9 3 1 , . 0 1 9 1 9 3 1 , . 2 1 8 4 1 ) 6 7 2 5 ( . 6 3 5 9 . . ) 9 9 1 5 3 ( l i N l i N . ) 0 0 1 7 1 ( . 7 4 1 9 4 3 1 , s e r a h S f o . o N , 0 1 5 3 7 7 4 0 7 2 , , l i N , 0 1 5 3 7 7 4 0 7 2 , , , 0 1 5 3 7 7 4 0 7 2 , , l i N , , 0 1 5 3 7 7 4 0 7 2 , 0 0 0 5 1 , l i N 0 0 0 5 1 , l i N 0 0 0 5 1 , 0 0 0 5 1 , s e i t i r u c e S f o . o N e m o c n I r e h t O f o m e t I e v i s n e h e r p m o C s u l p r u S d n a s e v r e s e R e m o c n I r e h t O h g u o r h t e v i s n e h e r p m o C t n e m u r t s n I y t i u q E d e n s g n i i a t e R n r a E e v r e s e R y r o t u t a t S l a t i p a C e v r e s e R l a t i p a C e v r e s e R n o i t p m e d e R e v r e s e R e r u t n e b e D n o i t p m e d e R i s e i t i r u c e S m u m e r P s e i t i r u c e S l a u t e p r e P d e r u c e s n U . B ) 1 2 e t o N r e f e R ( y t i u q E r e h t O . C 8 1 0 2 , l i r p A t s 1 t a s a e c n a l a B r a e y e h t g n i r u d d e u s s I 9 1 0 2 , h c r a M t s 1 3 t a s a e c n a l a B 0 2 0 2 , h c r a M t s 1 3 t a s a e c n a l a B 9 1 0 2 , l i r p A t s 1 t a s a e c n a l a B r a e y e h t g n i r u d d e u s s I l a t i p a C e r a h S y t i u q E . A 8 1 0 2 , l i r p A t s 1 t a s a e c n a l a B r a e y e h t g n i r u d d e u s s I 9 1 0 2 , h c r a M t s 1 3 t a s a e c n a l a B 0 2 0 2 , h c r a M t s 1 3 t a s a e c n a l a B 9 1 0 2 , l i r p A t s 1 t a s a e c n a l a B r a e y e h t g n i r u d d e u s s I l a r e n e G e v r e s e R n o i t p i r c s e D A L A W A R G A I L A M N A B 9 2 0 0 2 1 0 0 N D I r o t c e r i D y r a t e r c e S y n a p m o C Y R T S I M . M . H , d r a o B e h t f o f l a h e b n o d n a r o F r o t c e r i D g n i g a n a M & O E C A H N I S R E E V A R P 4 6 1 5 8 7 1 0 N D I M A Y N A M A R B U S H S E M A R r e c ffi O l a i c n a n i F f e i h C . 0 2 0 2 , y a M h t 9 1 , i a b m u M . ) 2 1 4 7 3 ( l i N ) 9 8 0 3 ( . ) 9 8 0 3 ( . l i N l i N l i N . 9 4 5 3 7 . 8 4 0 3 3 l i N . 8 4 0 3 3 ) 4 3 9 1 ( . . ) 4 3 9 1 ( l i N l i N . ) 5 2 6 5 3 ( l i N ) 1 1 5 4 ( . . 9 9 8 7 8 1 , . 0 7 8 6 7 1 , ) 5 7 3 1 ( . . 5 9 4 5 7 1 , . 6 6 8 7 5 . ) 9 9 1 5 3 ( . ) 9 4 5 3 7 ( . ) 0 0 1 7 1 ( . 2 1 4 5 9 2 , . 2 1 4 5 9 2 , . 2 1 8 4 1 ) 2 4 3 3 ( . . 0 7 4 1 1 . ) 9 9 1 5 3 ( . 0 0 5 2 1 . 5 2 6 5 3 . ) 0 0 1 7 1 ( . 8 0 7 2 0 3 , . 8 0 0 6 6 6 6 1 6 . l i N l i N l i N l i N l i N l i N l i N . 8 0 0 6 6 . 8 0 0 6 6 l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N 6 6 1 6 . 6 6 1 6 . l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N 5 8 1 . 5 8 1 . 5 8 1 . l i N l i N l i N l i N l i N l i N l i N . 8 0 0 6 6 6 6 1 6 . 5 8 1 . . 1 6 0 0 0 1 , . 8 9 4 3 6 5 , . 8 9 3 5 8 3 , l i N l i N l i N l i N . ) 6 6 8 7 5 ( l i N l i N . 5 9 1 2 4 . 5 9 1 2 4 l i N l i N l i N l i N . ) 0 0 5 2 1 ( l i N l i N . 5 9 6 9 2 l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N . 8 9 4 3 6 5 , . 8 9 3 5 8 3 , . 8 9 4 3 6 5 , . 8 9 3 5 8 3 , l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N . 8 9 4 3 6 5 , . 8 9 3 5 8 3 , ) x a T f o t e N ( r a e y e h t r o f ) s e s n e p x E ( / e m o c n I e v i s n e h e r p m o C r e h t O e m o c n I e v i s n e h e r p m o C l a t o T 8 1 0 2 , l i r p A t s 1 t a s a e c n a l a B r a e y e h t r o f ) s s o L ( / t fi o r P i i i ) d n e d v d n o x a t g n d u l c n i ( d a p d n e d v D i i i ) x a T f o t e N ( r a e y e h t r o f ) s e s n e p x E ( / e m o c n I e v i s n e h e r p m o C r e h t O e m o c n I e v i s n e h e r p m o C l a t o T 9 1 0 2 , l i r p A t s 1 t a s a e c n a l a B r a e y e h t r o f ) s s o L ( / t fi o r P s e i t i r u c e S l a u t e p r e P d e r u c e s n U n o n o i t u b i r t s i D 9 1 0 2 , h c r a M t s 1 3 t a s a e c n a l a B e v r e s e R n o i t p m e d e R e r u t n e b e D ) m o r f ( / o t r e f s n a r T l s e r a h S f o e a S n o s g n n r a E d e n a t e R o t i i r e f s n a r T s t n e m e t a t S l a i c n a n i F e n o l a d n a t S e h t o t s e t o n g n i y n a p m o c c a e e S s e i t i r u c e S l a u t e p r e P d e r u c e s n U n o n o i t u b i r t s i D 0 2 0 2 , h c r a M t s 1 3 t a s a e c n a l a B e t a d n e v e f o t r o p e r r u o r e p s A s t n a t n u o c c A d e r e t r a h C P L L O C & C B R S r o F e v r e s e R n o i t p m e d e R e r u t n e b e D ) m o r f ( / o t r e f s n a r T l s e r a h S f o e a S n o s g n n r a E d e n a t e R o t i i r e f s n a r T i i i ) d n e d v d n o x a t g n d u l c n i ( d a p d n e d v D i i i 3 0 0 0 0 3 E / E 2 8 9 4 2 3 o N n o i t a r t s i g e R m . r i F I A C I L A W R A G A K E H S I H B A r e p r e n t r a P 3 7 7 2 1 1 . i o N p h s r e b m e M . 0 2 0 2 , y a M h t 9 1 , i a b m u M 255 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Notes to the Standalone Financial Statements 1. Corporate Information: The Tata Power Company Limited (the ‘Company’) is a public limited company domiciled and incorporated in India under the Indian Companies Act, VII of 1913. The registered office of the Company is located at Bombay House, 24, Homi Mody Street, Mumbai 400001, India. The Company is listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). The principal business of the Company is generation, transmission and distribution of electricity. The Company was amongst the pioneers in generation of electricity in India more than a century ago. The Company has an installed generation capacity of 2,304 MW in India and a presence in all the segments of the power sector viz. Fuel and Logistics, Generation (thermal, hydro, solar and wind), Transmission and Distribution. 2. 2.1 2.2 Significant Accounting Policies: Statement of compliance The Standalone Ind AS financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as notified under the Companies (Indian Accounting Standards) Rules, 2015 read with section 133 of the Companies Act, 2013 (as amended from time to time). Basis of preparation and presentation The Standalone Ind AS Financial Statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value - derivative financial instruments; - certain financial assets and liabilities measured at fair value (Refer accounting policy regarding financial instruments); - employee benefit expenses (Refer Note 26 for accounting policy) Historical cost is the amount of cash or cash equivalents paid or the fair value of the consideration given to acquire assets at the time of their acquisition or the amount of proceeds received in exchange for the obligation, or at the amounts of cash or cash equivalents expected to be paid to satisfy the liability in the normal course of business. 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. 3. 3.1 Other Significant Accounting Policies Foreign Currencies The functional currency of the Company is Indian Rupee (₹). Income and expenses in foreign currencies are recorded at exchange rates prevailing on the date of the transaction. Foreign currency denominated monetary assets and liabilities are translated at the exchange rate prevailing on the balance sheet date and exchange gains and losses arising on settlement and restatement are recognised in the statement of profit and loss. Non-monetary assets and liabilities that are measured in terms of historical cost in foreign currencies are not retranslated. Exchange differences on monetary items are recognised in the statement of profit and loss in the period in which they arise except for exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings. 3.2 Current versus non-current classification The Company presents assets and liabilities in the balance sheet based on current / non-current classification. An asset is treated as current when it is: - expected to be realised or intended to be sold or consumed in normal operating cycle, - held primarily for the purpose of trading, - expected to be realised within twelve months after the reporting period, or 256 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 3. Other Significant Accounting Policies (Contd.) - cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current. A liability is current when: - - - - it is expected to be settled in normal operating cycle, it is held primarily for the purpose of trading, it is due to be settled within twelve months after the reporting period, or there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. The Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities. The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle. 3.3 Financial Instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities measured at fair value through profit or loss are recognised immediately in the statement of profit and loss. 3.4 Financial Assets All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the market place. All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets. 3.5 Financial assets at amortised cost Financial assets are subsequently measured at amortised cost using the effective interest rate method if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. 3.5.1 Financial assets at fair value through other comprehensive income (FVTOCI) A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. On initial recognition, the Company makes an irrevocable election on an instrument-by-instrument basis to present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments, other than equity investment which are held for trading. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the ‘Equity Instruments through Other Comprehensive Income’. The cumulative gain or loss is not reclassified to profit or loss on disposal of the investments. 257 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Other Significant Accounting Policies (Contd.) 3. 3.5.2 Financial assets at fair value through profit or loss (FVTPL) Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading. Other financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income. 3.5.3 Investment in Subsidiaries, Jointly Controlled Entities and Associates Investment in subsidiaries, jointly controlled entities and associates are measured at cost less impairment as per Ind AS 27 - ‘Separate Financial Statements’. Impairment of investments: The Company reviews its carrying value of investments carried at cost annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted in the statement of profit and loss. 3.5.4 Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Company’s balance sheet) when: - the right to receive cash flows from the asset have expired, or - the Company has transferred its right to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Company has transferred its right to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company’s continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained. 3.5.5 Impairment of financial assets The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company recognises lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. Financial liabilities and equity instruments 3.6 3.6.1 Classification as debt or equity Debt and equity instruments issued by a Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. 3.6.2 Equity Instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs. 3.6.3 Financial liabilities All financial liabilities are subsequently measured at amortised cost using the effective interest method. Gains and losses are recognised in statement of profit and loss when the liabilities are derecognised as well as through the Effective Interest Rate (EIR) amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss. 258 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements Other Significant Accounting Policies (Contd.) 3. 3.6.4 Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss. 3.6.5 Financial guarantee contracts Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 - ‘Financial Instruments’ and the amount recognised less cumulative amortisation. 3.7 Derivative financial instruments The Company enters into a variety of derivative financial instruments to manage its exposure to foreign exchange rate risks, including foreign exchange forward contracts. Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in statement of profit and loss immediately. 3.8 Reclassification of financial assets and liabilities The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Company’s senior management determines change in the business model as a result of external or internal changes which are significant to the Company’s operations. Such changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest. 3.9 Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. 3.10 Dividend distribution to equity shareholders of the Company The Company recognises a liability to make dividend distributions to its equity holders when the distribution is authorised and the distribution is no longer at its discretion. A corresponding amount is recognised directly in equity. 3.11 New and amended standards and interpretations The Company applied for the first time certain amendments to the standards, which are effective for annual periods beginning on or after 1st April, 2019. The nature and the impact of each amendment is described below: 3.11.1 Ind AS 116 ‘Leases’ Ind AS 116 - ‘Leases’ (Ind AS 116) was notified in March, 2019 and it replaces Ind AS 17 Leases. Ind AS 116 is effective for annual periods beginning on or after 1st April, 2019. The Company has applied Ind AS 116 with a date of initial application of 1st April, 2019 using modified retrospective approach, under which the cumulative effect of initial application is recognized as at 1st April, 2019. Lessor accounting under Ind AS 116 is substantially unchanged from Ind AS 17. As a lessee, the Company previously classified leases as operating or finance lease based on its assessment of whether the lease transferred significantly all of the risk and 259 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 3. Other Significant Accounting Policies (Contd.) rewards incidental to the ownership of the underlying asset of the Company. Under Ind AS 116, the Company recognizes the right-of-use assets and lease liabilities as stated in the Note 5B and 23. On adoption of Ind AS 116, the Company has recognized ‘Right-of-use’ assets amounting to ₹ 406.99 crore (including reclassification of lease prepayment from other assets amounting to ₹ 206.00 crore) and ‘Lease liabilities’ amounting to ₹ 225.00 crore (including reclassification of lease liability from trade payables amounting to ₹ 24.00 crore) as at 1st April, 2019. There is no impact on retained earnings as at 1st April, 2019. The Company has applied Ind AS 116 only to the contracts that were previously identified as leases. As a practical expedient, contracts previously identified as lease under Ind AS 17 has not reassessed as to whether a contract is, or contains, a lease under Ind AS 116. The Company has used the following practical expedients when applying Ind AS 116 to leases previously classified as operating leases under Ind AS 17: - Applied a single discount rate to a portfolio of leases with similar characteristics. - Relied on its assessment of whether leases are onerous immediately before the date of initial application. - Applied the exemption not to recognize right-of-use asset and liabilities for leases with remaining lease term of 12 months or less. - Excluded initial direct costs from measuring the right-of-use asset at the date of application. - Used hindsight when determining the lease term if the contract contains options to extend or terminate the lease. The lease liabilities as at 1st April, 2019 can be reconciled to the operating lease commitments as of 31st March, 2019 as follows: Particulars Operating lease commitments (including cancellable and non-cancellable leases) as at 31st March, 2019. Less: Commitments relating to short-term leases Less: Commitments relating to leases of low-value assets Net Operating lease commitments as at 31st March, 2019. Weighted average incremental borrowing rate as at 1st April, 2019 Lease liabilities as at 1st April, 2019 Accounting Policy for Leases till 31st March, 2019 Leasing arrangement E crore 462.20 (29.07) (0.38) 432.75 9.15% 225.00 The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement. The Company as lessee A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease. A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term. 3.11.2 Ind AS 12 Income Taxes Pursuant to the amendment in Ind AS 12 - ‘Income Taxes’ effective from 1st April, 2019, the Company has recognised the income tax consequence on interest on perpetual securities in the profit and loss which was earlier recognized directly in other equity and has restated the figures for previous year presented. Accordingly, the profit after tax for the year ended 31st March, 2019 is higher by C 60.12 crore as compared to previous year Standalone Ind AS financial statements. There is no impact on the “Other Equity” of the Company. 260 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements Other Significant Accounting Policies (Contd.) 3. 3.11.3 Deferred Tax Recoverable / Payable In the regulated operations of the Company where tariff recovered from consumers is determined on cost plus return on equity, the Income tax cost is pass through cost and accordingly the Company recognizes Deferred Tax Recoverable / Payable against any Deferred Tax Expense / Income. Until previous year, the same was presented under ‘Tax Expenses’ in the financial statements. During the year, pursuant to an opinion by the Expert Advisory Committee of The Institute of Chartered Accountants of India, the same has now been included in ‘Revenue from Operations’ in case of Generation and Transmission business and disclosed as ‘Deferred Tax Recoverable / (Payable)’ as Net Movement in Regulatory Deferral Balances in case of Distribution business. There is no impact in the Other Equity and Profit / (Loss) on account of such change in presentation. Impact of this restatement in the comparative year is as follows: Particulars Revenue from Operations - Increase / (Decrease) Movement in Net Regulatory Deferral Balances - Income / (Expense) Tax (Expense) / Credit Basic and diluted EPS from continuing operations before movement in regulatory deferral balances - Increase / (Decrease) E crore For the year ended 31st March, 2019 322.42 98.19 420.61 (0.23) 4. Critical accounting estimates and judgements In the application of the Company’s accounting policies, management of the Company is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the Standalone Ind AS financial statements. The areas involving critical estimates or judgements are: Estimations used for impairment assessment of property, plant and equipment of certain cash generating units (CGU) - Note 5 Estimations used for fair value of unquoted securities and impairment assessment of investments - Note 7 Estimation of defined benefit obligation - Note 26 Estimations used for determination of tax expenses and tax balances (including Minimum Alternate Tax credit) - Note 35 Estimates related to accrual of regulatory deferrals and revenue recognition - Note 19 and 30 Estimates and judgements related to the assessment of liquidity risk - Note 42.4.3 Judgement to estimate the amount of provision required or to determine required disclosure related to litigation and claims against the Company - Note 38 Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances. 261 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 5. Property, Plant and Equipment Accounting Policy Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price (net of trade discount and rebates) and any directly attributable cost of bringing the asset to its working condition for its intended use and for qualifying assets, borrowing costs capitalised in accordance with the Ind AS 23. Capital work in progress is stated at cost, net of accumulated impairment loss, if any. When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the statement of profit and loss as incurred. The accounting policy related to Right of Use Assets has been disclosed in Note 23. Depreciation Depreciation commences when an asset is ready for its intended use. Freehold land and assets held for sale are not depreciated. Regulated Assets: Depreciation on Property, plant and equipment in respect of electricity business of the Company covered under Part B of Schedule II of the Companies Act, 2013, has been provided on the straight line method at the rates specified in tariff regulation notified by respective state electricity regulatory commission. Non-Regulated Assets: Depreciation is recognised on the cost of assets (other than freehold land and properties under construction) less their residual values over their estimated useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of building, plant and equipment over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used. Estimated useful lives of the Regulated and Non-Regulated assets are as follows: Type of Assets Leasehold Lands Hydraulic Works Buildings-Plant Buildings-Others Coal Jetty Railway Sidings, Roads, Crossings, etc. Plant and Equipment (excluding Computers and Data Processing units) Plant and Equipment (Computers and Data Processing units) Transmission Lines, Cable Network, etc. Furniture and Fixtures Office Equipment Motor Cars Motor Lorries, Launches, Barges etc. Helicopters Useful Lives 95 years 35 years 5 to 35 years 25 to 60 years 25 years 25 to 35 years 25 to 35 years 3 years 25 to 35 years 10 to 35 years 5 years 5 years 25 to 35 years 25 years Derecognition An item of Property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipments is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the statement of profit and loss. 262 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 5. Property, Plant and Equipment (Contd.) Impairment Impairment of tangible and intangible assets The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Company’s CGUs to which the individual assets are allocated. Impairment losses of tangible and intangible assets are recognised in the statement of profit and loss. 263 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm . 7 4 5 0 9 4 1 , . 9 9 7 7 6 ) 8 5 5 6 ( . 0 6 0 3 . ) 5 6 0 3 ( . . 3 8 7 1 5 5 1 , . 8 4 8 0 6 ) 7 7 5 5 ( . 7 6 5 2 . ) 3 5 1 ( . . 6 3 6 3 9 7 , . 7 4 1 8 5 7 , . 1 5 9 5 3 7 , l i N l i N l i N 1 0 7 3 . ) 1 7 1 ( . 0 3 5 3 . l i N l i N 1 0 0 . 5 2 3 3 . ) 3 5 1 ( . 3 7 1 3 . 4 9 0 . 4 4 2 4 . ) 9 1 7 ( . l i N l i N 9 1 6 3 . 7 6 4 . 1 8 9 2 . ) 8 0 6 ( . l i N l i N 0 4 8 2 . 4 8 0 . 9 0 7 2 . ) 5 0 2 ( . 1 0 0 . ) 1 0 0 ( . 8 8 5 2 . 2 5 1 . 9 9 2 2 . ) 4 9 1 ( . l i N 1 0 0 . 8 5 2 2 . 7 5 3 . 9 7 7 . 0 3 3 . 7 9 1 . 7 4 5 6 . ) 6 6 5 ( . l i N 1 0 0 . 9 7 1 6 . 0 2 4 . 3 5 1 4 . ) 4 2 5 ( . l i N 1 0 0 . 0 5 0 4 . 9 2 1 2 . . 8 1 3 6 1 3 , . 4 1 3 8 5 9 , ) 0 1 0 ( . l i N ) 9 6 0 ( . . 7 5 1 5 2 ) 2 0 9 4 ( . 3 2 9 2 . ) 2 0 0 ( . . 5 4 3 3 3 . 6 9 3 1 4 3 , . 8 7 6 9 8 9 , . 0 7 8 9 1 1 , . 8 0 7 9 2 5 , l i N l i N ) 8 0 0 ( . . 9 7 7 3 1 . 6 1 4 0 4 ) 6 1 1 4 ( . 8 6 4 2 . l i N . 1 4 6 3 3 1 , . 6 7 4 8 6 5 , . 5 5 7 7 0 2 , . 2 0 2 1 2 4 , 3 5 0 . 1 5 6 4 . ) 5 0 0 ( . l i N ) 3 2 0 ( . 6 7 6 4 . 0 3 1 . 9 4 3 2 . ) 5 0 0 ( . l i N l i N 4 7 4 2 . l i N l i N l i N l i N . 0 1 6 0 1 ) 3 9 0 ( . 4 3 0 . ) 9 7 0 ( . 1 4 4 2 . . 5 3 7 1 2 ) 8 5 0 ( . 7 9 0 . ) 5 6 0 ( . 4 2 4 6 . . 9 0 7 3 9 . 0 1 6 0 1 . 8 3 0 4 2 . 7 0 1 0 0 1 , l i N l i N l i N 0 6 5 . 1 0 6 5 . 4 6 6 . 9 9 5 9 . ) 1 9 0 ( . l i N 2 1 0 . ) 1 3 0 ( . l i N 5 8 0 . 2 2 0 3 . . 0 8 6 6 2 l i N l i N 4 0 0 . . 6 4 6 3 5 ) 3 1 0 ( . . 7 3 6 3 5 l i N l i N l i N 7 3 2 1 . . 6 8 3 9 2 . 1 6 1 6 . 4 8 1 0 1 . 6 5 7 9 2 . 3 2 6 0 3 2 0 2 2 . 9 4 4 4 . . 4 5 8 3 1 . 1 5 3 0 7 . 4 1 0 3 2 l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N 4 0 0 . . 3 6 3 4 1 ) 2 4 6 2 ( . . 5 2 7 1 1 l i N l i N l i N l i N l i N l i N . 5 2 7 1 1 e r o r c E l a t o T s r e t p o c i l e H r o t o M e c ffi O e r u t i n r u F n o i s s i m s n a r T s e g r a B , s e l c i h e V , s e h c n u a L t n e m p u q E i d n a s e r u t x i F d n a s e n i l e l b a c k r o w t e n d n a t n a l P t n e m p u q E i , s d a o R y a w l i a R , s g n d i s i s g n i s s o r c y t t e J l a o C @ s r e h t O t n a l P - s g n d i l i u B - s g n d i l i u B s k r o W c i l u a r d y H d n a L d n a L l d o h e s a e L l d o h e e r F . 4 9 7 5 7 4 1 , . 4 1 4 1 5 ) 9 8 7 8 ( . . ) 2 7 8 7 2 ( . 7 4 5 0 9 4 1 , . 9 3 4 8 8 6 , . 3 0 5 9 5 ) 6 1 1 7 ( . ) 5 7 8 4 ( . . 1 5 9 5 3 7 , . 6 9 5 4 5 7 , l i N l i N l i N 1 0 7 3 . 1 0 7 3 . l i N l i N 7 4 2 . 8 7 0 3 . 5 2 3 3 . 6 7 3 . 0 7 0 . 8 6 6 4 . ) 4 9 4 ( . l i N 4 4 2 4 . 8 8 6 . 7 8 6 2 . ) 4 9 3 ( . l i N 1 8 9 2 . 7 3 0 . 0 7 8 2 . ) 7 9 1 ( . ) 1 0 0 ( . 9 0 7 2 . 5 0 2 . 6 7 2 2 . ) 1 8 1 ( . ) 1 0 0 ( . 9 9 2 2 . . 3 6 2 1 0 1 4 . 2 4 1 . 4 0 8 6 . ) 8 9 3 ( . ) 1 0 0 ( . 7 4 5 6 . 9 5 4 . 3 2 0 4 . ) 8 2 3 ( . ) 1 0 0 ( . 3 5 1 4 . 4 9 3 2 . . 4 6 2 6 9 2 , . 2 0 9 3 4 9 , l i N ) 8 2 0 ( . . 2 8 0 0 2 . 9 0 4 4 2 ) 5 7 0 7 ( . ) 2 2 9 2 ( . . 8 1 3 6 1 3 , . 4 1 3 8 5 9 , . 0 7 0 7 0 1 , . 0 8 5 8 9 4 , l i N ) 4 2 0 ( . . 4 2 8 2 1 . 9 8 3 9 3 ) 3 9 7 5 ( . ) 8 6 4 2 ( . . 0 7 8 9 1 1 , . 8 0 7 9 2 5 , . 8 4 4 6 9 1 , . 6 0 6 8 2 4 , 6 6 0 . 8 5 6 4 . ) 3 7 0 ( . l i N 1 5 6 4 . 2 4 1 . 1 7 2 2 . ) 4 6 0 ( . l i N 9 4 3 2 . 2 0 3 2 . l i N l i N l i N . 0 1 6 0 1 . 0 1 6 0 1 l i N l i N 2 6 5 . 9 3 0 5 . 1 0 6 5 . 9 0 0 5 . 4 6 7 . ) 9 3 0 ( . . 0 7 1 3 2 ) 0 6 1 2 ( . . 5 3 7 1 2 2 3 7 9 . 8 4 1 1 . ) 6 3 0 ( . ) 5 4 2 1 ( . 9 9 5 9 . ) 2 6 1 ( . ) 1 1 2 ( . 8 8 6 5 . . 4 9 3 8 8 . 9 0 7 3 9 ) 5 4 1 ( . ) 0 5 1 ( . 5 6 3 2 . . 0 1 6 4 2 . 0 8 6 6 2 6 5 1 . ) 8 7 1 ( . l i N . 8 6 6 3 5 . 6 4 6 3 5 7 3 2 1 . ) 1 5 1 ( . l i N . 0 0 3 8 2 . 6 8 3 9 2 . 6 3 1 2 1 . 9 2 0 7 6 . 0 6 2 4 2 l i N l i N . 5 6 5 2 2 l i N . ) 5 6 5 2 2 ( l i N ) 5 4 1 ( . ) 2 1 0 ( . . 0 2 5 4 1 . 3 6 3 4 1 3 7 7 . 7 3 2 . l i N ) 0 1 0 1 ( . l i N l i N l i N l i N l i N l i N l i N . 3 6 3 4 1 ) . a 8 1 e t o N r e f e R ( e a s l l r o f d e h s a d e fi i s s a l c e R ) . a 8 1 e t o N r e f e R ( e a s l l r o f d e h f o l a s r e v e R 0 2 0 2 , h c r a M t s 1 3 t a s a e c n a l a B t n e m r i a p m i d n a n o i t a i c e r p e d d e t a l u m u c c A 9 1 0 2 , l i r p A t s 1 t a s a e c n a l a B ) w o l e b 1 e t o N r e f e R ( i s n o i t a r e p O g n u n i t n o C - e s n e p x E n o i t a i c e r p e D ) . a 8 1 e t o N r e f e R ( e a s l l r o f d e h s a d e fi i s s a l c e R ) . a 8 1 e t o N r e f e R ( e a s l l r o f d e h f o l a s r e v e R 0 2 0 2 , h c r a M t s 1 3 t a s a e c n a l a B s t e s s a f o l a s o p s i D 9 1 0 2 , l i r p A t s 1 t a s a e c n a l a B t s o C s n o i t i d d A s l a s o p s i D 0 2 0 2 , h c r a M t s 1 3 t a s A t n u o m a g n i y r r a c t e N n o i t p i r c s e D 8 1 0 2 , l i r p A t s 1 t a s a e c n a l a B t s o C s n o i t i d d A s l a s o p s i D ) . a 8 1 e t o N l l r e f e R ( e a s r o f d e h m o r f / ) o t ( d e fi i s s a l c e R t n e m r i a p m i d n a n o i t a i c e r p e d d e t a l u m u c c A 8 1 0 2 , l i r p A t s 1 t a s a e c n a l a B ) w o l e b 1 e t o N r e f e R ( i s n o i t a r e p O g n u n i t n o C - e s n e p x E n o i t a i c e r p e D s t e s s a f o l a s o p s i D 9 1 0 2 , h c r a M t s 1 3 t a s a e c n a l a B ) . a 8 1 e t o N l l r e f e R ( e a s r o f d e h m o r f / ) o t ( d e fi i s s a l c e R 9 1 0 2 , h c r a M t s 1 3 t a s a e c n a l a B 9 1 0 2 , h c r a M t s 1 3 t a s A t n u o m a g n i y r r a c t e N . s e i t e i c o s g n i s u o h e v i t a r e p o - o c n i s e r a h s y r a n d r o f o t s o c i e d u l c n i s g n d i l i u B @ e r o r c E l a t o T s r e t p o c i l e H r o t o M e c ffi O e r u t i n r u F n o i s s i m s n a r T s e g r a B , s e l c i h e V , s e h c n u a L t n e m p u q E i d n a s e r u t x i F d n a s e n i l e l b a c k r o w t e n d n a t n a l P t n e m p u q E i , s d a o R y a w l i a R , s g n d i s i s g n i s s o r c y t t e J l a o C @ s r e h t O t n a l P - s g n d i l i u B - s g n d i l i u B s k r o W c i l u a r d y H d n a L d n a L l d o h e s a e L l d o h e e r F s t e s s A d e n w O ) . d t n o C ( i t n e m p u q E d n a t n a l P , y t r e p o r P n o i t p i r c s e D . 5 . A 264 s t n e m e t a t S l a i c n a n i F e n o l a d n a t S e h T o T s e t o N n e e b e v a h s t n e m u c o d y r a s s e c e n e h T . s i s a b e l a s p m u l s a n o ” n r e c n o c g n o g “ a s a i , s e i i r a d i s b u s d e n w o y l l o h w o t y n a p m o c e h t f o s t e s s a y g r e n e n a e . l c W M 5 9 9 4 f o r e f s n a r t r o f t n e m e g n a r r a f o s e m e h c s d e v o r p p a e v a h s r e d o h e r a h s e h T l . 4 . s l a v o r p p a y r o t u t a t s i f o t p e c e r n o d e s i n g o c e r e b d u o w s e m e h c s e h t l f o t c e ff e e h T . r e d r o l a n fi s t i r o f ) T L C N ( l a n u b i r T w a L y n a p m o C l a n o i t a N e h t h t i w d e l fi ; s s e r g o r p n i s i s d e e d f o e l t i t f o n o i t a r t s i g e r h c i h w r o f r a e y r e i l r a e e h t n i . d t L y a b m o r T l i a n m r e T l a c i m e h C f o r e g r e m g n i r u d d e r i u q c a ) e r o r c 8 8 0 ₹ - 9 1 0 2 . , h c r a M . t s 1 3 ( e r o r c 8 8 0 ₹ o t g n i t a g e r g g a s e i t r e p o r p e b a v o m m l i ; s s e r g o r p n i s i s d e e d f o e l t i t f o n o i t a r t s i g e r h c i h w r o f s r a e y r e i l r a e n i d e r i u q c a ) e r o r c 4 5 . 6 2 ₹ - 9 1 0 2 , h c r a M . t s 1 3 ( e r o r c 1 0 8 ₹ o t g n i t a g e r g g a s e i t r e p o r p e b a v o m m l i ) . a 8 1 e t o N r e f e R ( e l a s l r o f d e h s a d e fi i s s a l c , s s e r g o r p n i s i s d e e d f o e l t i t f o n o i t a r t s i g e r h c i h w r o f e s a e l n o n e k a t . , ) e r o r c 5 5 5 1 2 ₹ - 9 1 0 2 , h c r a M t s 1 3 ( . ) e r o r c 5 6 5 2 2 ₹ e u a v s s o r G l . ( e r o r c 5 5 5 1 2 ₹ o t g n i t a g e r g g a d n a l . 0 2 0 2 , h c r a M l t s 1 3 t a s a n o i t u o s e r g n d n e p d n a e t u p s i d n i i s i d e e d e l t i t e h t h c i h w r o f . ) e r o r c 7 5 7 2 ₹ - 9 1 0 2 , h c r a M . t s 1 3 ( e r o r c 7 5 7 2 ₹ o t g n i t a g e r g g a s e i t r e p o r p e b a v o m m l i ) a ( ) b ( ) c ( ) d ( . y a b m o r T t a d e t a c o l ) t n e m g e S n o i t a r e n e G ( n o i t a t s g n i t a r e n e g 6 t i n U f o t c e p s e r n i e r o r c 0 0 1 D f o e g r a h c t n e m r i a p m i n a d e d r o c e r d a h y n a p m o C e h t , s r a e y r e i l r a e e h t g n i r u D : r o f t p e c x e , y n a p m o C e h t f o e m a n e h t n i l d e h e r a t n e m p u q e d n a t n a p l i , y t r e p o r p n i d e d u l c n i s e i t r e p o r p e b a v o m m l i f o s d e e d e l t i t e h T i . t n e m p u q E d n a t n a P l , y t r e p o r P n o d e t a e r c e g r a h c r o f 2 2 e t o N r e f e R : s e t o N . 1 . 2 . 3 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 5. B. Property, Plant and Equipment (Contd.) Right of Use Assets (Refer Note 23) Description Cost Balance as on 1st April, 2019 (Refer Note 3.11.1) Additions during the year Reclassified as held for sale (Refer Note 18a.) Balance as at 31st March, 2020 Accumulated depreciation and impairment Balance as on 1st April, 2019 Depreciation Expense Balance as at 31st March, 2020 Net carrying amount As at 31st March, 2020 As at 31st March, 2019 Description Net carrying amount A. Owned Assets B. Right of Use Assets Total 6. Intangible Assets Accounting Policy Leasehold Land and Sub-surface rights Plant and Equipment 395.56 69.31 (43.92) 420.95 Nil 35.21 35.21 385.74 Nil 11.43 Nil Nil 11.43 Nil 4.57 4.57 6.86 Nil E crore Total 406.99 69.31 (43.92) 432.38 Nil 39.78 39.78 392.60 Nil As at 31st March, 2020 K crore As at 31st March, 2019 K crore 7,581.47 392.60 7,974.07 7,545.96 Nil 7,545.96 Intangible Assets acquired separately Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any. Internally generated Intangible Assets Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred. Derecognition of Intangible Assets An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in statement of profit and loss when the asset is derecognised. Useful lives of Intangible Assets Intangible assets with finite lives are amortised over the useful economic life on straight line basis and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at the end of each reporting period. 265 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 6. Intangible Assets (Contd.) Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset. Estimated useful lives of the intangible assets are as follows: Type of assets Computer softwares Copyrights, patents, other intellectual property rights, services and operating rights Useful lives 5 years 5 years 5 years E crore Total Computer softwares $ Copyrights, patents, other intellectual property rights, services and operating rights # Licences and franchises $ 233.97 15.82 249.79 150.16 37.48 187.64 62.15 0.57 Nil 0.57 0.49 0.01 0.50 0.07 0.26 Nil 0.26 0.26 Nil 0.26 234.80 15.82 250.62 150.91 37.49 188.40 Nil 62.22 Computer softwares $ Copyrights, patents, other intellectual property rights, services and operating rights # Licences and franchises $ 205.63 28.34 233.97 112.50 37.66 150.16 83.81 0.53 0.04 0.57 0.48 0.01 0.49 0.08 0.26 Nil 0.26 0.26 Nil 0.26 E crore Total 206.42 28.38 234.80 113.24 37.67 150.91 Nil 83.89 Licences and franchises Description Cost Balance as at 1st April, 2019 Additions Balance as at 31st March, 2020 Accumulated amortisation and impairment Balance as at 1st April, 2019 Amortisation expense Balance as at 31st March, 2020 Net carrying amount As at 31st March, 2020 Description Cost Balance as at 1st April, 2018 Additions Balance as at 31st March, 2019 Accumulated amortisation and impairment Balance as at 1st April, 2018 Amortisation expense Balance as at 31st March, 2019 Net carrying amount As at 31st March, 2019 Notes: # Internally generated intangible assets. $ Other than internally generated intangible assets. 266 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 6. Intangible Assets (Contd.) Depreciation/Amortisation - Continuing Operations: Depreciation on tangible assets Depreciation on Right of Use assets Amortisation on intangible assets Total 7. Non-current Investments For the year ended 31st March, 2020 For the year ended 31st March, 2019 K crore 608.48 39.78 37.49 685.75 K crore 595.03 Nil 37.67 632.70 As at 31st March, 2020 As at 31st March, 2019 Quantity Quantity Face Value (in K unless stated otherwise) As at 31st March, 2020 K crore As at 31st March, 2019 K crore I Investments carried at cost less accumulated impairment, if any (A) Investment in Subsidiaries (i) Investment in Equity Shares fully paid-up Quoted NELCO Ltd. Unquoted 1,10,99,630 1,10,99,630 Tata Power Trading Co. Ltd. Maithon Power Ltd. 1,60,00,000 1,60,00,000 111,65,99,120 111,65,99,120 Coastal Gujarat Power Ltd. (Refer Note 7 below) 800,04,20,000 800,04,20,000 Bhira Investments Pte. Ltd. Bhivpuri Investments Ltd. Tata Power Green Energy Ltd. Khopoli Investments Ltd. 10,00,000 10,00,000 7,46,250 50,000 7,46,250 50,000 4,70,07,350 4,70,07,350 Trust Energy Resources Pte. Ltd. 12,91,53,344 12,91,53,344 Tata Power Delhi Distribution Ltd. 28,15,20,000 28,15,20,000 TP Ajmer Distribution Ltd. 10,000 10,000 Tata Power Jamshedpur Distribution Ltd. 80,50,000 80,50,000 TP Renewable Microgrid Ltd. (formerly Industrial Power Utility Ltd.) TCL Ceramics Ltd. (formerly Tata Ceramics Ltd.) (Refer Note 6 below) 1,10,000 1,10,000 Nil Nil Tata Power Renewable Energy Ltd. (Refer Note 7 below) Tata Power Solar Systems Ltd. Tata Power International Pte. Ltd. Af-Taab Investment Co. Ltd. 104,51,07,715 104,51,07,715 2,29,77,567 2,29,77,567 6,77,30,650 6,77,30,650 10,73,000 10,73,000 ** Less: Impairment in the value of Investments (Refer Note 10 below) Carried forward……. 10 10 10 10 USD 1 Euro 1 10 USD 1 USD 1 10 10 10 10 2 10 100 USD 1 100 11.07 11.07 11.07 11.07 37.09 1,116.83 8,593.25** 37.09 1,116.83 8,593.25** 4.10 4.08 0.02 255.20 607.95 200.93 10.00 4.10 4.08 0.02 255.20 607.95 200.93 10.00 8.05** 8.05** 0.11 Nil * 0.11 Nil * 1,054.03 1,054.03 322.98 577.55** 68.68 322.98 577.55** 68.68 12,860.85 12,860.85 4,009.14 8,851.71 8,862.78 4,140.60 8,720.25 8,731.32 267 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 7. Non-current Investments (Contd.) Brought forward……. (ii) Investment in Perpetual Securities Unquoted Tata Power Renewable Energy Ltd. (Refer Note 5 below) Coastal Gujarat Power Ltd. (Refer Note 5 below) (B) Investment in Associates Investment in Equity Shares fully Paid-up Quoted As at 31st March, 2020 As at 31st March, 2019 Quantity Quantity Face Value (in K unless stated otherwise) As at 31st March, 2020 K crore 8,862.78 As at 31st March, 2019 K crore 8,731.32 N.A. N.A. N.A. N.A. 3,895.00 7,035.89 10,930.89 19,793.67 3,895.00 6,985.89 10,880.89 19,612.21 Tata Communications Ltd. Nil Nil 10 Nil Nil * Unquoted Yashmun Engineers Ltd. The Associated Building Co. Ltd. Tata Projects Ltd. (Refer Note 8 below) 19,200 1,400 9,67,500 19,200 1,400 Nil 100 900 100 Dagachhu Hydro Power Corporation Ltd. 10,74,320 10,74,320 Nu 1,000 Panatone Finvest Ltd. Nil Nil 10 0.01 0.13 85.01 107.43 Nil 192.58 0.01 0.13 Nil * 107.43 Nil * 107.57 (C) Investment in Joint Ventures Investment in Equity Shares fully Paid-up Unquoted Tubed Coal Mines Ltd. Itezhi Tezhi Power Corporation (Refer Note 7 below) Mandakini Coal Company Ltd. (Refer Note 7 below) Powerlinks Transmission Ltd. (Refer Note 7 below) 3,93,00,000 3,93,00,000 23,86,80,000 23,86,80,000 Industrial Energy Ltd. (Refer Note 7 below) 49,28,40,000 49,28,40,000 LTH Milcom Pvt. Ltd. Dugar Hydro Power Ltd. Nil Nil 4,34,25,002 4,34,25,002 ** Less: Impairment in the value of Investments Sub-total I (A) + I (B) + I (C) Carried forward……. 268 1,01,97,800 1,01,97,800 10 10.20** 10.20** Nil Nil ZMW 1 Nil* Nil* 10 10 10 10 10 39.30** 39.30** 238.68 492.84 Nil* 43.42** 824.44 67.50 756.94 238.68 492.84 Nil* 43.42** 824.44 67.50 756.94 20,743.19 20,476.72 20,743.19 20,476.72 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 7. Non-current Investments (Contd.) As at 31st March, 2020 As at 31st March, 2019 Quantity Quantity Face Value (in K unless stated otherwise) As at 31st March, 2020 K crore As at 31st March, 2019 K crore Brought forward……. 20,743.19 20,476.72 II Investments designated at Fair Value through Other Comprehensive Income (Refer Note 9) Investment in Equity Shares fully Paid-up Quoted Voltas Ltd. Tata Consultancy Services Ltd. Tata Teleservices (Maharashtra) Ltd. Unquoted Tata Services Ltd. Tata Industries Ltd. # Tata Sons Pvt. Ltd. # Haldia Petrochemicals Ltd. Tata International Ltd. # Tata Teleservices Ltd. III Investments carried at Amortised Cost (A) Investment in Subsidiaries Investment in Preference Shares fully Paid-up TCL Ceramics Ltd. (formerly Tata Ceramics Ltd.) 2,33,420 2,33,420 766 Nil 766 Nil 1,112 1,112 58,28,126 58,28,126 6,673 6,673 2,24,99,999 2,24,99,999 3,500 Nil 3,500 Nil 1 1 10 1,000 100 1,000 10 1,000 10 11.13 0.14 Nil * 11.27 Nil 102.69 241.95 56.48 3.75 Nil * 404.87 14.63 0.15 Nil* 14.78 Nil 102.69 241.95 56.48 3.75 Nil* 404.87 416.14 419.65 (Refer Note 6 below) Nil Nil 100 Nil * Nil* (B) Government Securities (Unquoted) fully Paid-up 40.00 Nil (C) Statutory Investments Contingencies Reserve Fund Investments Government Securities (Unquoted) fully Paid-up Deferred Taxation Liability Fund Investments Government Securities (Unquoted) fully Paid-up Sub-total III (A) + III (B) + III (C) Total * Refer Asset Held For Sale (Refer Note 18a). 127.87 136.65 Nil 237.75 127.87 374.40 167.87 374.40 21,327.20 21,270.77 # The cost of these investments approximate their fair value because there is a wide range of possible fair value measurements and the cost represents the best estimate of fair value within that range. 269 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Non-current Investments (Contd.) 7. Notes: 1. 2. 3. 4. 5. 6. Aggregate Market Value of Quoted Investments Aggregate Carrying Value of Quoted Investments Aggregate Carrying Value of Unquoted Investments (Net) Aggregate amount of impairment in value of Investments 161.01 22.34 316.07 25.85 21,304.86 21,244.92 4,076.64 4,208.10 The Company has invested in unsecured subordinated perpetual securities issued by Tata Power Renewable Energy Ltd. and Coastal Gujarat Power Ltd., its subsidiary companies. These securities are redeemable at the issuer’s option and carry non-cumulative interest coupon at the rate of dividend paid on the issuer’s ordinary shares. The interest can be deferred if the issuer does not pay any dividend on its ordinary shares for the financial year. The issuer has classified this instrument as equity under Ind AS - 32 ‘Financial Instruments Presentation’. Accordingly, the Company has classified this investment as Equity Instrument and has accounted at cost as per Ind AS - 27 ‘Separate Financial Statements’. The Company, along with its subsidiary, has 30.68% shareholding in TCL Ceramics Ltd. (formerly known as Tata Ceramics Ltd.). Further, TCL Ceramics Ltd. has issued Redeemable Cumulative Convertible Preference Shares which have been fully subscribed by the Company and its subsidiaries. As the dividend on the said Preference Shares has remained unpaid for more than two years, the preference shareholders have assumed voting rights along with the equity shareholders. The aggregate voting power (together with voting power on preference shares) with the Company along with its subsidiaries is at 57.07%. As the Company has sufficient dominant voting interest to direct TCL Ceramics Ltd.’s relevant activities, investment in the said Company has been considered as investment in subsidiary. Pursuant to the Share Purchase Agreement (‘Agreement’) dated 4th January, 2020, the Company has transferred its Equity and Preference share to the purchasers as a part of the conditions mentioned in the Agreement subject to final closing. The said shares has been pledged back to the Company by the purchasers till the final closure. As all the conditions related to the closing has not been completed, the Company believes that it still controls TCL Ceramics Ltd. till all the conditions are fulfilled. Hence, no impact of sale of share has been accounted in the Standalone Ind AS financial statements. The impact of the sale on the Company’s Standalone Ind AS financial statement will not be significant. 7. Shares pledged : The Company has pledged shares of subsidiaries and joint ventures with the lenders for borrowings availed by the respective subsidiaries and joint ventures. Details Coastal Gujarat Power Ltd. Tata Power Renewable Energy Ltd. Itezhi Tezhi Power Corporation * Mandakini Coal Company Ltd. Powerlinks Transmission Ltd. Industrial Energy Ltd. Category 31st March, 2020 31st March, 2019 Subsidiary Subsidiary Joint Venture Joint Venture Joint Venture Joint Venture Nos. Nos. 310,25,44,200 310,25,44,200 25,81,14,935 25,81,14,935 4,52,500 2,00,43,000 23,86,80,000 25,13,48,400 4,52,500 2,00,43,000 23,86,80,000 25,13,48,400 * Re-classified as Asset Held For Sale (Refer Note 18a). Further till previous year, in respect of outstanding borrowings of Tata Power Delhi Distribution Limited (TPDDL), the Company has given an undertaking for non-disposal of equity shares in TPDDL to its lenders. The outstanding borrowings has been repaid during the current year against which the undertaking was given to the lender. During the year ended 31st March, 2020, the Company has reassesed its plan for sale of investment in Tata Projects Ltd. and has reclassified its investment in Tata Projects from Assets held for sale to Investment in Associate. Investments at Fair Value Through Other Comprehensive Income (FVTOCI) reflect investment in quoted and unquoted equity securities. These equity shares are designated as FVTOCI as they are not held for trading purpose and are not in similar line of business as the Company, thus disclosing their fair value change in profit and loss will not reflect the purpose of holding. 8. 9. 270 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 7. 10. Non-current Investments (Contd.) (a) The Company holds investments in Coastal Gujarat Power Ltd. (CGPL) (a wholly owned subsidiary of the Company operating 4,000 MW Mundra power plant), Indonesian mining companies PT Kaltim Prima Coal (KPC) and PT Baramulti Suksessarana TBK (BSSR) through intermediate holding companies (associates operating coal mines in Indonesia and supplying coal to CGPL) and Trust Energy Resources Pte. Ltd. (TERPL) (shipping company in Singapore providing freight services for coal shipment to CGPL). All these companies constitute a single cash generating unit (CGU) and form part of same segment due to interdependency of cash flows. CGPL is incurring significant losses on account of significant increase in coal prices due to change in Indonesian laws which is offset by the profits earned by the mining companies. The Company has performed the impairment assessment and determined the value in use based on estimated cash flow projections over the life of the assets included in CGU. The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Company’s CGUs to which the individual assets are allocated. For Mundra power plant, future cash flows is estimated based on remaining period of long term power purchase agreement (PPA) and thereafter based on management’s estimate on tariff and other assumptions. Cash flow projection of Mines is derived based on estimated coal production considering the renewal of license for operating the Mines. In the past, the Company had recognised an impairment provision of C 3,555 crore in CGU. A reassessment of the assumptions used in estimating the impact of impairment of the cash generating unit (CGU) comprising of Coastal Gujarat Power Ltd. and the Indonesian coal mines, combined with the significant impact of unwinding of a year’s discount on the cash flows, would have resulted in a reversal of ₹ 1,200 crore of provision for impairment. Considering the significant uncertainties arising from ongoing renegotiation of the Mundra Power Purchase Agreement, as recommended by the High Powered Committee, and the pending renewal of the mining license at the Indonesian coal mines, the Company has not effected such a reversal. The reversal of impairment has not resulted from any significant improvement in the estimated service potential of the concerned CGU. Key assumptions used for value in use calculation include coal prices, energy prices post the PPA period, discount rates and exchange rates. Short term coal prices and energy prices used in three to five years projections are based on market survey and expert analysis report. Afterwards increase in cost of coal and exchange rates are considered based on long term historical trend. Further, the Management strongly believes that mine licenses will be renewed post expiry. Discount rate represents the current market assessment of the risk specific to CGU taking into consideration the time value of money. Pre tax discount rate used in the calculation of value in use of investment in power plant is 10.87% p.a. (31st March, 2019: 10.61% p.a.) and investment in coal mines and related infrastructure companies is 12.68% p.a. (31st March, 2019: 11.06% p.a.). (b) Tata Power International Pte. Ltd. (TPIPL) (a wholly owned subsidiary of the Company) holds investments in Adjaristsqali Netherlands B.V. (ABV) (a joint venture of TPIPL) operating 187 MW hydro power plant in Georgia. In the past, the Company, in accordance with Ind AS 36 - 'Impairment of Assets' had recognized impairment provision on investment of ₹ 577.55 crore and financial guarantee obligation of ₹ 103.54 crore. Pursuant to debt restructuring of the ABV, execution of long-term power purchase agreement (PPA) with Government of Georgia, receipt of insurance claims and start of commercial operations during the year ended 31st March, 2020, the Company performed the recoverability assessment and recognised the reversal of ₹ 235.00 crore comprising of reversal of ₹ 103.54 crore towards financial guarantee obligation and reversal of ₹ 131.46 crore towards its investment in TPIPL which has been disclosed as an exceptional item in the statement of profit and loss. The Company has performed the recoverability assessment and determined the value in use based on estimated cash flow projections over the life of the assets included in CGU. Projected cash flows include cash flow projections approved by management covering 3 to 5 year period and the cash flows beyond that has been projected based on the long term forecast. The following key assumptions were used for performing the valuation: - Tariff post PPA period of 15 years. - A pre-tax discount rate of 6.64 % was applied; 271 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 8. Trade Receivables (Unsecured unless otherwise stated) Non-current Considered Good (Refer Note 39a.) Total Current Considered Good - Secured (Refer Note below) Considered Good Credit Impaired Less: Allowance for Doubtful Trade Receivables Total As at 31st March, 2020 K crore As at 31st March, 2019 K crore Nil Nil 185.76 185.76 234.48 886.82 30.09 1,151.39 42.71 1,108.68 216.72 1,059.18 27.29 1,303.19 46.75 1,256.44 Note: Company holds security deposits of C 234.48 crore (31st March, 2019 - C 216.72 crore) in respect of electricity receivables. 8.1 Trade Receivables As at 31st March, 2020, C 639.18 crore (31st March, 2019 - C 900.14 crore) is due from Brihanmumbai Electricity Supply & Transport Undertaking, Maharashtra State Electricity Transmission Company Ltd., Tamil Nadu Generation and Distribution Corporation and Tata Steel Ltd. which represents customers owing more than 5% of the total balance of trade receivables. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The expected credit loss allowance is not calculated on non current trade receivable on account of dispute. The provision matrix takes into account historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. The provision matrix at the end of the reporting period is as follows: Ageing of Receivables Within the credit period 1-90 days past due 91-182 days past due More than 182 days past due Age of Receivables Within the credit period 1-90 days past due 91-182 days past due More than 182 days past due Movement in the allowance for doubtful trade receivables Balance at the beginning of the year Add: Expected credit loss allowance on trade receivables calculated at lifetime expected credit losses for the year Less: Transferred to Assets Classified as Held For Sale (Refer Note 18a.) Balance at the end of the year Expected Credit Loss (%) As at 31st March, 2020 0.00% 0.03% 0.10% 5.92% As at 31st March, 2019 0.10% 0.11% 0.99% 9.30% As at 31st March, 2020 K crore As at 31st March, 2019 K crore 550.31 340.41 50.04 210.63 734.72 343.87 30.61 193.99 As at 31st March, 2020 K crore 46.75 As at 31st March, 2019 K crore 36.66 (4.04) Nil 42.71 21.63 (11.54) 46.75 The concentration of credit risk is very limited due to the fact that the large customers are mainly government entities and remaining customer base is large and widely dispersed and secured with security deposit 272 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 9. Loans (Unsecured unless otherwise stated) Non-current - At Amortised Cost (i) Security Deposits Considered Good Credit Impaired Less: Allowance for Doubtful Deposits (ii) Loans to Related Parties (Refer Note 41) Considered Good Credit Impaired Less: Allowance for Doubtful Loans (iii) Other Loans Loans to Employees Considered Good Total Current - At Amortised Cost (i) Security Deposits Considered Good (ii) Loans to Related Parties (Refer Note 41) Considered Good Credit Impaired Less: Allowance for Doubtful Loans Total * Reclassified as Held for Sale. (Refer Note 18a.) As at 31st March, 2020 K crore As at 31st March, 2019 K crore 36.59 30.16 66.75 30.16 36.59 Nil 55.66 55.66 55.66 Nil 5.51 42.10 3.47 3.47 546.62 12.00 558.62 12.00 546.62 45.42 27.44 72.86 27.44 45.42 Nil * 55.52 55.52 55.52 Nil 5.93 51.35 1.08 1.08 118.12 10.84 128.96 10.84 118.12 550.09 119.20 273 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 9. Loans (Contd.) Disclosure under Regulation 53(f) and 34(3) read together with paragraph A Schedule V of Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015. Loans and advances in the nature of loans given to Subsidiaries, Joint Ventures and Associates: Name of the Company Relationship Amount Outstanding as at the year end K crore Maximum Principal Amount Outstanding during the year (excluding interest accrued) Tata Power Renewable Energy Ltd. Coastal Gujarat Power Ltd. Maithon Power Ltd. Tata Power Jamshedpur Distribution Ltd. $ TCL Ceramics Ltd. (formerly Tata Ceramics Ltd.) $ TP Ajmer Distribution Ltd. Mandakini Coal Company Ltd. $ Nelito Systems Ltd. $ Indo Rama Renewables Jath Ltd. TP Renewable Microgrid Ltd. (formerly Industrial Power Utility Ltd.) Walwhan Solar MP Ltd. Welspun Renewable Energy Pvt Ltd. Tata Power Green Energy Ltd. Tata Power Trading Company Ltd. Powerlinks Transmission Ltd. Walwhan Solar TN Ltd. Tata Power Solar Systems Ltd. Prayagraj Power Generation Company Ltd. Yashmun Engineers Ltd. Itezhi Tezhi Power Corporation # Total Notes: Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Joint Venture Associate Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Joint Venture Subsidiary Subsidiary Joint Venture Associate Joint Venture 31st March, 2020 31st March, 2019 31st March, 2020 31st March, 2019 450.00 Nil Nil Nil 12.00 95.00 54.39 1.27 Nil 1.55 Nil Nil 0.07 Nil Nil Nil Nil Nil Nil Nil 53.00 Nil Nil 10.84 25.00 54.25 1.27 Nil 0.05 10.00 30.00 0.07 Nil Nil Nil Nil Nil Nil 450.00 252.00 200.00 Nil 17.69 190.00 54.39 1.27 Nil 1.55 15.09 200.00 0.07 80.00 1.00 81.00 100.00 13.43 Nil 245.00 419.49 47.04 1.24 10.84 25.00 54.25 1.27 35.00 0.05 10.00 30.00 0.07 100.00 0.10 165.00 Nil Nil 1.00 614.28 18.59 632.87 184.48 16.51 200.99 18.59 15.56 $ Provided for. # Reclassified as held for sale (including interest accrued). 274 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 10. Finance Lease Receivable - At Amortised Cost (Unsecured unless otherwise stated) Accounting Policy Leases are classified as finance lease whenever the terms of the lease transfer substantially all the risks and rewards incidental to ownership to the lessee. All other leases are classified as operating lease. Amount due from lessees under finance leases are recorded as receivables at the Company’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease. The Company recognises lease payments received under operating leases as income on a straight-line basis over the lease term. Finance Lease Receivable - Non-current Finance Lease Receivable - Current Total 10.1 Leasing Arrangements As at 31st March, 2020 K crore As at 31st March, 2019 K crore 553.03 31.89 584.92 554.27 37.58 591.85 The Company has entered into Power Purchase Agreements (PPA) with a customer for its assets located at Jojobera. The assets relate to 30 years of take or pay agreements with the customer to supply electricity at a fixed plus variable charge. The customer, during the term of the PPAs has a right to purchase the assets and at the end of the contract is obligated to purchase the same on the basis of the valuation to be determined as per the PPAs. The Company has recognised an amount of C 88.91 crore (31st March, 2019 - C 86.70 crore) as income for finance lease during the year ended 31st March, 2020. 10.2 Amount receivable under Finance Lease Less than a year One to two years Two to three years Three to four years Four to five years Total (A) More than five years (B) Total (A +B) Unearned finance income Present Value of Minimum Lease Payments Receivable Minimum Lease Payments as at 31st March, 2020 K crore Minimum Lease Payments as at 31st March, 2019 111.96 108.66 107.66 106.57 105.57 540.42 630.10 1,170.52 585.60 584.92 108.64 105.97 105.26 104.42 103.47 527.76 716.24 1,244.00 652.15 591.85 Lessor - Operating Lease The Company has entered into operating leases for its certain building, plant and machinery and other equipment. These typically have lease terms of between 1 and 10 years. The Company has recognized an amount of C 11.16 crore (31st March, 2019 - C 16.16 crore) as rental income for operating lease during the year ended 31st March, 2020. 275 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 11. Other Financial Assets - At Amortised Cost Non-current (i) Accruals Doubtful Interest Accrued on Loans to Related Parties Less: Allowance for Doubtful Interest (ii) Others Unsecured, considered good As at 31st March, 2020 K crore As at 31st March, 2019 K crore 1.24 1.24 1.24 Nil 1.24 1.24 1.24 Nil Advance towards Equity (Refer Note 1 below) 178.50 Nil Balances with Banks: In Deposit Accounts (with remaining maturity of more than twelve months) (Refer Note 2 below) Other Advances Total 3.14 41.13 222.77 2.89 Nil 2.89 Notes: 1. Odisha Electricity Regulatory Commission ('OERC') had issued a request for proposal (RFP) for sale of controlling interest in distribution business of Central Electricity Supply Utility of Orissa. The Company had bid for it and has been identified as the successful bidder. As per the requirement of RFP, the Company has deposited C 178.50 crore with OERC. Pending vesting order for the completion of sale, the amount deposited is disclosed as non-current financial assets and will be converted to equity after passing of the vesting order by OERC. 2. Balances with Banks held as Margin Money Deposits against Guarantees. Current (i) Accruals Unsecured, considered good Interest Accrued on Inter-corporate/Bank Deposits Interest Accrued on Investments Interest Accrued on Finance Lease Receivable Interest Accrued on Loans to Related Parties Doubtful Interest Accrued on Loans to Related Parties Interest Accrued on Inter-corporate Deposits Less: Allowance for Doubtful Interest (ii) Others Unsecured, considered good Recoverable from Consumers Dividend Receivable Other Receivables As at 31st March, 2020 K crore As at 31st March, 2019 K crore 0.50 3.51 6.85 3.09 0.55 1.40 15.90 1.95 13.95 221.45 Nil 0.18 221.63 0.39 6.69 6.96 0.19 0.32 1.40 15.95 1.72 14.23 Nil 81.16 0.67 81.83 Total 235.58 96.06 276 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 12. Non-current Tax Assets Advance Income-tax (Net) Total 13. Other Assets Non-current (i) Capital Advances Unsecured, considered good Doubtful Less: Allowance for Doubtful Advances (ii) Security Deposits Unsecured, considered good (iii) Balances with Government Authorities Unsecured, considered good Advances Amount Paid Under Protest VAT/Sales Tax Receivable (iv) Unamortised Premium for Leasehold Land Unsecured, considered good (v) Others Unsecured, considered good Prepaid Expenses Recoverable from Consumers Doubtful Less: Allowance for Doubtful Advances As at 31st March, 2020 K crore As at 31st March, 2019 K crore 135.00 135.00 68.65 68.65 As at 31st March, 2020 K crore As at 31st March, 2019 K crore 5.06 0.12 5.18 0.12 5.06 Nil 0.90 16.22 25.73 42.85 17.56 0.12 17.68 0.12 17.56 227.00 50.10 16.22 58.05 124.37 Nil 202.39 0.89 960.84 Nil 961.73 Nil 961.73 0.99 404.79 0.93 406.71 0.93 405.78 Total 1,009.64 977.10 277 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 13. Other Assets (Contd.) Current (i) Balances with Government Authorities Unsecured, considered good Advances VAT/Sales Tax Receivable Doubtful Less: Allowance for Doubtful Advances (ii) Unamortised Premium for Leasehold Land Unsecured, considered good (iii) Others Unsecured, considered good Prepaid Expenses Recoverable from Consumers Advances to Vendors Other Advances Doubtful Less: Allowance for Doubtful Advances As at 31st March, 2020 K crore As at 31st March, 2019 K crore 4.86 Nil 0.46 5.32 0.46 4.86 12.36 3.69 Nil 16.05 Nil 16.05 Nil 3.24 38.58 Nil 102.07 0.75 0.13 141.53 0.13 141.40 22.67 787.00 122.53 0.62 0.13 932.95 0.13 932.82 Total 146.26 952.11 278 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 14. Inventories Accounting Policy Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on moving weighted average basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Cost of inventory includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Unserviceable/damaged stores and spares are identified and written down based on technical evaluation. Inventories (a) Fuel Fuel-in-Transit (b) Stores and Spares (Refer Note 2 below) (c) Loose Tools (d) Others Property Under Development Total Notes: As at 31st March, 2020 K crore As at 31st March, 2019 K crore 289.75 60.62 133.80 0.27 253.44 56.97 149.19 0.35 150.57 119.56 635.01 579.51 1. Refer Note 22 for Inventories pledged as security for liabilities. 2. During the year ended 31st March, 2020, the Company has recognised C 6.83 crore (31st March, 2019 - C Nil) as an expense for the write down of unserviceable stores and spares inventory. 15. Current Investments Investments carried at Amortised Cost Deferred Taxation Liability Fund Investments Government Securities (Unquoted) Investments carried at Fair Value through Profit and Loss Mutual Funds (Unquoted) Total Note: As at 31st March, 2020 K crore As at 31st March, 2019 K crore Nil 42.00 20.00 20.00 Nil 42.00 Aggregate Carrying Value of Unquoted Investments. 20.00 42.00 279 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 16. Cash and Cash Equivalents - At Amortised Cost Accounting Policy Cash and cash equivalents in the balance sheet comprise cash at banks and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. Cash and cash equivalents include balances with banks which are unrestricted for withdrawal and usage. For the purpose of the Statement of Cash Flows, cash and cash equivalents consist of cash at banks and short-term deposits, as defined above, net of outstanding bank overdraft as they are considered an integral part of the Company’s cash management. As at 31st March, 2020 K crore As at 31st March, 2019 K crore (i) Balances with Banks: In Current Accounts Cash and Cash Equivalents as per Balance Sheet Bank Overdraft attributable to Continuing Operations (Refer Note 28) Cash and Cash Equivalents as per Statement of Cash Flows - Continuing Operations (i) Balances with Banks: In Current Accounts Book Overdraft Cash and Cash Equivalents as per Statement of Cash Flows - Discontinued Operations Cash and Cash Equivalents as per Statement of Cash Flows Reconciliation of Liabilities from Financing Activities 158.54 158.54 (1.05) 157.49 7.62 (0.02) 7.60 165.09 Particulars As at 1st April, 2019 Cash flows Proceeds Repayment Non-cash Transactions Reclassified as part of Discontinued Operations Non-current Borrowings (including Current Maturities of Non-current Borrowings) Current Borrowings (excluding Bank Overdraft) Lease liabilities (Refer Note 3.11.1) Total 10,720.72 6,729.61 225.00 17,675.33 3,403.59 30,776.85 Nil 34,180.44 (2,568.35) (31,295.20) (11.78) (33,875.33) 28.59 Nil Nil 28.59 4.80 Nil 65.63 70.43 Particulars As at 1st April, 2018 Cash flows Proceeds Repayment Non-cash Transactions Reclassified as part of Discontinued Operations 75.94 75.94 (2.19) 73.75 6.13 (0.02) 6.11 79.86 K crore As at 31st March, 2020 11,589.35 6,211.26 278.85 18,079.46 K crore As at 31st March, 2019 Non-current Borrowings (including Current Maturities of Non-current Borrowings) 12,244.97 3,337.09 (4,729.41) (135.48) 3.55 10,720.72 Current Borrowings (excluding Bank Overdraft) 4,231.02 22,729.91 (20,231.28) Nil Nil Nil Nil Nil (0.04) 6,729.61 Nil Nil 16,475.99 26,067.00 (24,960.69) (135.48) 3.51 17,450.33 Lease liabilities Total 280 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 17. Other Balances with Banks - At Amortised Cost In Deposit Accounts (Refer Note below) (a) (b) In Earmarked Accounts- Unpaid Dividend Account Total Note: Balances with banks held as margin money deposits against guarantees. 18a. Assets Classified as Held For Sale As at 31st March, 2020 K crore 2.00 As at 31st March, 2019 K crore 2.00 18.40 20.40 17.85 19.85 Accounting Policy Non-current assets or disposal group are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset or disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset or disposal group and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. As at each balance sheet date, the management reviews the appropriateness of such classification. Non-current assets or disposal group classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortised. A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and: - represents a separate major line of business or geographical area of operations, - is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations. 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. Additional disclosures are provided hereunder. All other notes to the Standalone Ind AS financial statements mainly include amounts for continuing operations, unless otherwise mentioned. Land (Refer Note (i) below) Building and Plant and Equipment (Refer Note (i) and (v) below) Investments carried at Fair Value through Other Comprehensive Income Investments carried at Cost in Associates and Joint Ventures [Refer Note (ii) and (iii) below and 7(8)] Loans and other receivables from Joint Venture (Refer Note (ii) below) Transmission Lines - Capital Work in Progress (Refer Note (iv) below) Assets of Discontinued Operations (Refer Note 18c.) Total As at 31st March, 2020 K crore As at 31st March, 2019 K crore 301.66 8.67 22.81 275.75 22.74 127.70 1,880.07 2,639.40 309.99 14.30 38.65 360.76 18.59 Nil 2,064.30 2,806.59 Notes: (i) During the year, the Company has reclassified following assets from held for sale to Property, Plant and Equipment : (a) Building at Erangal C 0.23 crore. (b) Oil Tankage unit at Trombay (Land C 0.04 crore, Building and Plant and Equipment C 4.68 crore). During the year, the Company has classified Helicopter (Book Value C 0.17 crore) from Property, Plant and Equipment to held for sale. 281 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 18a. Assets Classified as Held For Sale During the previous year the Company, has decided to sell/transfer following land and consequently classified as assets held for sale: (a) Land at Hadapsar C 0.08 crore. (b) Land at Dehrand C 215.56 crore. (c) Land at Oil Tankage Unit, Trombay (CTTL) C 0.04 crore. During the previous year, land at Belgaum (Book value - C 2.90 crore) has also been disposed off. During the previous year the Company, had decided to sell/transfer following buildings and consequently classified as assets held for sale: (a) Building at Erangal C 0.23 crore. (b) Building at Panvel C 0.48 crore. (c) Building at Peninsula C 8.02 crore. (d) Building at Metropolitan C Nil. (e) Building at Oil Tankage Unit, Trombay (CTTL) C 0.13 crore. (ii) During the previous year, the Company decided to divest its investments in Itezhi Tezhi Power Corporation (‘ITPC’) of C 275.75 crore along with loans and other receivables amounting to C 22.74 crore. Accordingly, the said investments along with loans and other receivables have been classified as held for sale. (iii) During the previous year, the Company sold investments in Panatone Finvest Ltd. (C 600.00 crore) and Tata Communications Ltd. (C 343.81 crore) (Associate Companies) at the sale value of C 1,542.62 crore and C 614.18 crore respectively, which were classified as Assets Held for Sale. The resultant gain on sale of investments of C 942.62 crore and C 270.37 crore respectively, has been disclosed as an exceptional items in the statement of profit and loss. (iv) Maharashtra Electricity Regulatory Commission (‘MERC’) has ordered termination of Vikhroli Transmission Lines project carried out by the Company and decided to invite fresh bids for completion of the project. MERC has also ordered that cost incurred by the Company shall be reimbursed by the successful bidder. Accordingly, the Company reclassified the said project as held for sale. (v) During the year, the Company sold Metropolitan building at the sale value of C 13.90 crore (Book Value C 0.89 crore) which was classified as held for sale. The resultant gain on sale of land of C 13.01 crore has been disclosed in the Statement of Profit and Loss. 18b. Liabilities directly associated with Assets Classified as Held For Sale Liabilities of Discontinued Operations (Refer Note 18c.) Other Liabilities Total As at 31st March, 2020 K crore As at 31st March, 2019 K crore 1,032.07 4.25 1,036.32 966.27 Nil 966.27 18c. Assets Classified as Held For Sale - Discontinued Operations During the earlier year, the Company approved sale of its Strategic Engineering Division (SED) to Tata Advanced Systems Ltd. (TASL) [a wholly owned subsidiary of Tata Sons Pvt. Ltd.] as a going concern on slump sale basis, subject to regulatory approvals at an enterprise value of C 2,230 crore (out of which C 1,040 crore payable at the time of closing and C 1,190 crore payable on achieving certain milestones). Accordingly, defence business segment is presented as discontinued operations in the segment note. The date of completion of the transaction is subject to approval by National Company Law Tribunal (NCLT) and such other requisite approvals. Results of Strategic Engineering Division for the year are presented below Particulars Income Revenue from Operations Expenditure Cost of Components Consumed Employee Benefits Expense Finance Costs Other Expenses Total Expenses Profit/(Loss) before tax from Discontinued Operations 282 For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 K crore 343.77 143.59 244.22 90.04 36.15 55.00 425.41 (81.64) 138.10 110.85 36.33 50.13 335.41 (191.82) The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 18c. Assets Classified as Held For Sale - Discontinued Operations (Contd.) Particulars Impairment Loss on Remeasurement of Fair Value (Refer Note below) Tax Expense/(Income) Current Tax/(Credit) Deferred Tax Profit/(Loss) after tax from Discontinued Operations Other Comprehensive Income/(Expense) Tax on Other Comprehensive Income Total Comprehensive Income/(Expense) For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 K crore (361.00) Nil Nil (32.41) (32.41) (410.23) 0.20 Nil (71.92) 5.94 (65.98) (125.84) (1.14) 0.40 (410.03) (126.58) Major classes of Assets and Liabilities of Strategic Engineering Division classified as held for sale as at 31st March, 2020 are as follows: Particulars Assets Property, Plant and Equipment Capital Work-in-Progress Other Intangible Assets Intangible Assets Under Development Non-current Financial Assets Other Non-current Assets Current Assets Inventories Current Financial Assets Other Current Assets Assets Classified as Held For Sale Impairment Loss on Remeasurement of Fair Value Total Assets Classified as Held For Sale Liabilities Non-current Liabilities Financial Liabilities Provisions Current Liabilities Financial Liabilities Provisions Other Current Liabilities Total Liabilities directly associated with Assets Classified as Held For Sale Net Assets directly associated with Discontinued Operations As at 31st March, 2020 K crore As at 31st March, 2019 K crore 382.27 422.58 124.13 356.71 3.68 35.40 83.30 663.67 169.33 2,241.07 (361.00) 1,880.07 594.76 27.68 258.99 9.76 140.88 1,032.07 848.00 302.06 418.75 123.42 347.10 3.66 74.66 104.15 261.96 428.54 2,064.30 Nil 2,064.30 679.31 30.22 190.00 17.91 48.83 966.27 1,098.03 Note: During the year, the Company has reassessed the fair value of consideration receivable from TASL and has recognised an impairment loss of C 361.00 crore in the Standalone Ind AS financial statements. The fair value on consideration has been determined based on the expected value of the consideration using discounted present value technique. The fair value has been categorised under Level 3 inputs, the key assumption being achievement/non achievement of milestones as defined in the scheme of arrangement. 283 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 18c. Assets Classified as Held For Sale - Discontinued Operations (Contd.) Net cash flows attributable to Strategic Engineering Division are as follows: Particulars Net Cash Flow from/(used in) Operating Activities Net Cash Flow from/(used in) Investing Activities Net Cash Flow from/(used in) Financing Activities Net Increase/(Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents as at 1st April (Opening Balance) Cash and Cash Equivalents as at 31st March (Closing Balance) For the year ended 31st March, 2020 K crore 127.80 (44.99) (81.32) 1.49 6.11 7.60 For the year ended 31st March, 2019 K crore 18.67 (87.35) 72.95 4.27 1.84 6.11 1. During the year, the Company has incurred Research and Development expenditure including capital expenditure amounting to C 10.02 crore (31st March, 2019 - C 43.62 crore). 2. Estimated amount of Contracts remaining to be executed on capital account and not provided for is C 66.22 crore (31st March, 2019 - C 55.57 crore). 3. Contingent Liability of excise duty amounts to C 14.28 crore (31st March, 2019 - C 14.28 crore). 19. Regulatory Deferral Account Accounting Policy The Company determines revenue gaps (i.e. surplus/shortfall in actual returns over returns entitled) in respect of its regulated operations in accordance with the provisions of Ind AS 114 - 'Regulatory Deferral Accounts' read with the Guidance Note on Rate Regulated Activities issued by The Institute of Chartered Accountants of India (ICAI) and based on the principles laid down under the relevant Tariff Regulations/Tariff Orders notified by the Electricity Regulator and the actual or expected actions of the regulator under the applicable regulatory framework. Appropriate adjustments in respect of such revenue gaps are made in the regulatory deferral account of the respective year for the amounts which are reasonably determinable and no significant uncertainty exists in such determination. These adjustments/accruals representing revenue gaps are carried forward as Regulatory deferral accounts debit/credit balances (Regulatory Assets/Regulatory Liabilities) as the case may be in the Standalone Ind AS financial statements, which would be recovered/refunded through future billing based on future tariff determination by the regulator in accordance with the electricity regulations. The Company presents separate line items in the balance sheet for: i. the total of all regulatory deferral account debit balances and related deferred tax balances; and ii. the total of all regulatory deferral account credit balances and related deferred tax balances. A separate line item is presented in the Statement of Profit and Loss for the net movement in regulatory deferral account. Regulatory Deferral Account - Liability - Current Regulatory Liabilities Regulatory Deferral Account - Assets - Non-current Regulatory Assets Net Regulatory Assets/(Liabilities) As at 31st March, 2020 K crore As at 31st March, 2019 K crore Nil Nil 258.32 258.32 999.00 999.00 Rate Regulated Activities (i) As per the Ind AS-114 ‘Regulatory Deferral Accounts’, the business of electricity distribution is a Rate Regulated activity wherein Maharashtra Electricity Regulatory Commission ('MERC'), the regulator determines Tariff to be charged from consumers based on prevailing regulations in place. MERC Multi Year Tariff Regulations, 2015 ('MYT Regulations'), is applicable for the period beginning from 1st April, 2016 to 31st March, 2020. These regulations require MERC to determine tariff in a manner wherein the Company can recover its fixed and variable costs including assured rate of return on approved equity base, from its consumers. The Company determines the Revenue, Regulatory Assets and Liabilities as per the terms and conditions specified in MYT Regulations. 284 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 19. Regulatory Deferral Account (Contd.) (ii) Reconciliation of Regulatory Assets/Liabilities of distribution business as per Rate Regulated Activities is as follows: Opening Regulatory Assets (Net of Liabilities) Regulatory Income/(Expenses) during the year (i) Power Purchase Cost (ii) Other expenses as per the terms of Tariff Regulations including Return On Equity (iii) Collected during the year as per approved Tariff (iv) Amount Collected in respect of earlier years (Net) Net Movement in Regulatory Deferral Balances (i + ii + iii + iv) Regulatory Assets/(Liabilities) on carrying cost recognised as revenue Recovery from Company's Generation Business Net Movement in Regulatory Deferral Balances in respect of earlier years (Refer Note below) Regulatory Assets/(Liabilities) on Deferred Tax Expense/(Income) Regulatory Assets/(Liabilities) on Deferred Tax Expense/(Income) on account of New Tax Regime (Refer Note 35) Closing Regulatory Assets (Net of Liabilities) (G) (A + B + C + D + E + F + G) (A) (B) (C) (D) (E) (F) As at 31st March, 2020 K crore 999.00 As at 31st March, 2019 K crore 1,310.19 2,212.00 779.00 (3,460.00) (323.24) (792.24) 24.00 (15.28) (21.32) 162.16 (98.00) 258.32 2,282.00 901.00 (3,382.00) (320.03) (519.03) 29.15 (193.76) 274.26 98.19 Nil 999.00 Note: Pursuant to receipt of true-up tariff order from the Regulatory Commission for the years 2017-18 and 2018-19 (31st March, 2019 - 2014-15 to 2016-17), the Company had recognised net expenditure of ₹ 15.83 crore (31st March, 2019 net income of ₹ 91.95 crore) comprising of a credit of ₹ 5.49 crore (31st March, 2019 - ₹ 274.26 crore) in regulatory income and a charge of ₹ 21.32 crore (31st March, 2019 - ₹ 182.31 crore) to revenue from operations. 20a. Share Capital Authorised Equity Shares of C 1/- each Cumulative Redeemable Preference Shares of C 100/- each 350,00,00,000 2,29,00,000 350.00 350,00,00,000 229.00 2,29,00,000 579.00 350.00 229.00 579.00 As at 31st March, 2020 K crore Number As at 31st March, 2019 K crore Number Issued Equity Shares [including 28,32,060 shares (31st March, 2019 - 28,32,060 shares) not allotted but held in abeyance, 44,02,700 shares cancelled pursuant to a Court Order and 4,80,40,400 shares of the Company held by the erstwhile The Andhra Valley Power Supply Company Ltd. cancelled pursuant to the Scheme of Amalgamation sanctioned by the High Court of Judicature, Bombay] Subscribed and Paid-up Equity Shares fully Paid-up [excluding 28,32,060 shares (31st March, 2019 - 28,32,060 shares) not allotted but held in abeyance, 44,02,700 shares cancelled pursuant to a Court Order and 4,80,40,400 shares of the Company held by the erstwhile The Andhra Valley Power Supply Company Ltd. cancelled pursuant to the Scheme of Amalgamation sanctioned by the High Court of Judicature, Bombay] Less: Calls in arrears [including C 0.01 crore (31st March, 2019 - C 0.01 crore) in respect of the erstwhile The Andhra Valley Power Supply Company Ltd. and the erstwhile The Tata Hydro-Electric Power Supply Company Ltd.] Add: Equity Shares forfeited - Amount paid Total Subscribed and Paid-up Share Capital 276,17,00,970 276.17 276,17,00,970 276.17 270,47,73,510 270.48 270,47,73,510 270.48 16,52,300 0.04 270.44 0.06 270.50 16,52,300 0.04 270.44 0.06 270.50 285 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 20a. Share Capital (Contd.) (i) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period: Equity Shares At the beginning of the year Issued during the year As at 31st March, 2020 K crore Number As at 31st March, 2019 K crore Number 270,64,25,810 270.50 270,64,25,810 270.50 Nil Nil Nil Nil Outstanding at the end of the year 270,64,25,810 270.50 270,64,25,810 270.50 (ii) Terms/rights attached to Equity Shares The Company has issued only one class of Equity Shares having a par value of C 1/- per share. Each holder of Equity Shares is entitled to one vote per share. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by the shareholders. (iii) Details of shareholders holding more than 5% shares in the Company Equity Shares of E 1/- each fully paid Tata Sons Pvt. Ltd. Life Insurance Corporation of India ICICI Prudential Bharat Consumption Funds * Matthews Pacific Tiger Fund As at 31st March, 2020 As at 31st March, 2019 Number % Holding Number % Holding 95,39,46,984 17,15,81,237 21,83,11,309 18,03,16,487 35.27 83,97,99,682 6.34 8.07 6.67 20,97,31,735 11,38,29,237 18,03,16,487 31.05 7.75 4.21 6.67 * Shareholding has been reported based on common Permanent Account Number 20b. Unsecured Perpetual Securities 11.40% Unsecured Perpetual Securities Add: Movement during the year Total As at 31st March, 2020 K crore As at 31st March, 2019 K crore 1,500.00 1,500.00 Nil Nil 1,500.00 1,500.00 In an earlier year, the Company raised C 1,500 crore through issue of Unsecured Perpetual Securities (the "Securities"). These Securities are perpetual in nature with no maturity or redemption and are callable only at the option of the Company. The distribution on these Securities are 11.40% with a step up provision if the Securities are not called after 10 years. The distribution on the Securities may be deferred at the option of the Company, if during the six months preceding the relevant distribution payment date, the Company has made no payment on, or redeemed or repurchased, any securities ranking pari passu with, or junior to the instrument. As these Securities are perpetual in nature and ranked senior only to the Share Capital of the Company and the Company does not have any redemption obligation, these are considered to be in the nature of equity instruments. 286 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 21. Other Equity General Reserve Securities Premium Capital Redemption Reserve Capital Reserves Statutory Reserve Debenture Redemption Reserve Opening Balance Add/(Less): Amount transferred from/(to) Retained Earnings (Net) Closing Balance Retained Earnings (Refer Note 1 below) Opening Balance Add/(Less): Profit/(Loss) for the year (Refer Note 3.11.2) Transfer from Debenture Redemption Reserve (Net) As at 31st March, 2020 K crore As at 31st March, 2019 K crore 3,853.98 5,634.98 1.85 61.66 660.08 421.95 (125.00) 296.95 2,954.12 148.12 125.00 3,853.98 5,634.98 1.85 61.66 660.08 1,000.61 (578.66) 421.95 1,878.99 1,768.70 578.66 Transfer from Equity Instrument through Other Comprehensive Income (Refer Note 3 below) 356.25 (735.49) Other Comprehensive Income/(Expense) arising from Remeasurement of Defined Benefit Obligation (Net of Tax) Payment of Dividend (Refer Note 2 below) Distribution on Unsecured Perpetual Securities (Refer Note 3.11.2) Closing Balance Equity Instruments through Other Comprehensive Income Opening Balance Add/(Less): Transfer to Retained Earnings (Refer Note 3 below) Change in Fair Value of Equity Instruments through Other Comprehensive Income Change in Fair Value of Equity Instruments classified as held for sale Gain on sale of Investment classified at Fair Value through other Comprehensive Income Deferred Tax Closing Balance Total Notes: (33.42) (351.99) (171.00) 72.96 3,027.08 330.48 (356.25) (3.50) (15.84) Nil Nil (45.11) (13.75) (351.99) (171.00) 1,075.13 2,954.12 (374.12) 735.49 0.17 (31.05) 0.01 (0.02) 330.48 13,491.47 13,919.10 Includes gain on fair valuation of land which is not available for distribution C 222.31 crore (31st March, 2019 - C 222.31 crore). 1. 2. The shareholders of the Company in their meeting held on 18th June, 2019 approved final dividend of C1.30 per share aggregating C 351.99 crore (excluding dividend distribution tax) for the financial year 2018-19. The said dividend was paid to the holders of fully paid equity shares on 20th June, 2019. 3. Represents gain/(loss) on sale of certain investments carried at fair value through other comprehensive income transferred to Retained 4. Earnings. In respect of the year ended 31st March, 2020, the directors have proposed a dividend of C 1.55 per share (31st March, 2019 - C 1.30 per share) to be paid on fully paid shares. This equity dividend is subject to approval at the annual general meeting and has not been included as a liability in the Standalone Ind AS financial statements. The proposed equity dividend is payable to all holders of fully paid equity shares. The total estimated equity dividend to be paid is C 419.68 crore (31st March, 2019 - C 351.99 crore). 287 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 21. Other Equity (Contd.) Nature and purpose of reserves: General Reserve General Reserve is used from time to time to transfer profits from Retained Earnings for appropriation purposes. As the General Reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be reclassified subsequently to statement of profit and loss. Securities Premium Securities Premium is used to record the premium on issue of shares and is utilised in accordance with the provisions of the Companies Act, 2013. Debenture Redemption Reserve The Company was required to create a Debenture Redemption Reserve out of the profits which are available for payment of dividend for the purpose of redemption of debentures. Pursuant to Companies (Share Capital and Debentures) Amendment Rules, 2019 dated 16th August, 2019, the Company is not required to create Debenture Redemption Reserve (DRR). Accordingly, the Company has not created DRR during the year and DRR created till previous years will be transferred to retained earnings on redemption of debentures. Capital Redemption Reserve Capital Redemption Reserve represents amounts set aside on redemption of preference shares. Capital Reserve Capital Reserve consists of forfeiture of the amount received from Tata Sons Pvt. Ltd. on preferential allotment of convertible warrants in the Company, on the lapse of the period to exercise right to convert the said warrants and on forfeiture of amounts paid on Debentures. Statutory Reserve Statutory Reserve consists of Special Appropriation towards Project Cost, Development Reserve and Investment Allowance Reserve. Special appropriation to project cost - Due to high capital investment required for the expansion in the electricity industry, the Maharashtra State Government permits part of the capital cost of approved projects to be collected through the electricity tariff and held as a special appropriation. Development Reserve / Investment Allowance Reserve - Until 1978, the Companies made appropriations to a Development Reserve and an Investment Allowance Reserve as required by the Income Tax Act, 1956. New appropriations to these reserves are no longer required due to changes in Indian law. Retained Earnings Retained Earnings are the profits of the Company earned till date net of appropriations. Equity Instruments through Other Comprehensive Income This reserve represents the cumulative gains and losses arising on revaluation of equity instruments measured at fair value through other comprehensive income, net of amounts reclassified to retained earnings when those assets are disposed off. 288 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 22. Non-current Borrowings - At Amortised Cost As at 31st March, 2020 As at 31st March, 2019 Non-current Current* Non-current Current* Maturities K crore Maturities K crore (i) Unsecured Redeemable Non-Convertible Debentures (a) 10.75% Series 2072 (b) 9.00% Series 2025 (c) 7.99% Series 2024 (d) 8.84% Series 2023 (e) 8.84% Series 2022 (f ) 9.48% Series 2019 Term Loans from Banks (g) ICICI Bank (h) Axis Bank (i) First Abu Dhabi Bank (j) Sumitomo Mitsui Banking Corporation Deferred Payment Liabilities (k) Sales Tax Deferral (ii) Secured Redeemable Non-Convertible Debentures (a) 8.85% Series 2028 (b) 9.15% Series 2025 (c) 9.15% Series 2025 (d) 9.40% Series 2022 Term Loans from Banks (e) HDFC Bank (f ) ICICI Bank (g) Kotak Mahindra Bank (h) State Bank of India (i) IDFC Bank (j) Axis Bank Term Loans from Others (k) Asian Development Bank (l) Indian Renewable Energy Development Agency Ltd. Nil Nil Nil Nil Nil 500.00 500.00 150.00 166.67 Nil Nil 1,494.40 249.74 1,197.21 749.12 499.40 Nil Nil Nil 1,492.31 Nil 300.00 1,496.35 Nil Nil Nil Nil Nil Nil 4,189.87 300.00 2,988.66 223.56 166.58 132.54 199.70 722.38 337.50 166.67 67.00 100.00 671.17 523.55 333.06 Nil Nil 856.61 316.67 2.83 5.67 8.50 8.50 (A) 4,915.08 976.84 3,853.77 825.17 197.19 89.88 99.94 209.68 596.69 1,590.27 505.78 561.77 1,139.25 Nil 516.49 4,313.56 Nil Nil Nil 16.25 16.00 25.00 Nil 57.25 74.37 150.00 150.95 118.68 Nil 226.66 720.66 6.33 2.94 9.27 Nil 105.86 124.90 209.63 Nil 16.00 25.00 Nil 440.39 41.00 917.81 624.76 712.73 1,234.17 623.44 333.38 395.00 120.00 150.93 94.94 158.75 166.67 4,446.29 1,086.29 6.33 2.94 9.27 12.67 5.87 18.54 Total (A + B) 9,825.33 1,764.02 8,749.72 1,971.00 * Amount disclosed under Other Current Financial Liabilities (Refer Note 24) (B) 4,910.25 787.18 4,895.95 1,145.83 289 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 22. Non-current Borrowings (Contd.) Security (i) The Debentures mentioned in (b) have been secured by a charge on movable properties and assets of the Company at Agaswadi and Visapur in Satara District of Maharashtra and Poolavadi in Tirupur District of Tamil Nadu. (ii) The Debentures mentioned in (c) have been secured by a pari passu charge on the assets of the wind farms situated at Samana in Gujarat, Gadag in Karnataka and immovable properties in Jamnagar, Gujarat. (iii) The Debentures mentioned in (d) have been secured by a charge on the land situated at Village Takve Khurd (Maharashtra) and movable fixed assets (except the Wind assets) including movable machinery, machinery spares, tools and accessories but excluding vehicles, launches and barges, present and future. (iv) The Loans mentioned in (a), (e), (g), (h), and (j) have been secured by pari passu charge on all movable Fixed Assets (excluding land and building), present and future (except assets of all wind projects both present and future) including movable machinery, machinery spares, tools and accessories, present and future, but excluding vehicles, launches and barges. (v) The Loans mentioned in (f) have also been secured by whole of current assets of the Company, present and future, in a first pari passu manner. (vi) The Loans mentioned in (g) is also secured by second charge on all movable fixed assets and current assets. (vii) The Loans from Asian Development Bank and Indian Renewable Energy Development Agency Limited mentioned in (k) and (l) respectively have been secured by a charge on the movable and immovable properties situated at Khandke, Brahmanvel and Sadawaghapur in Maharashtra including the projects' current and future receivables. Terms of Repayment Particulars Amount Outstanding as at 31st March, 2020 Financial Year FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-30 FY 30-31 and onwards K crore (i) Unsecured - At Amortised Cost Redeemable Non-Convertible Debentures (a) 10.75% Series 2072 (Refer Note 1 below) 1,500.00 (b) 9.00% Series 2025 (c) 7.99% Series 2024 (d) 8.84% Series 2023 (e) 8.84% Series 2022 250.00 - - - - - - - - 250.00 - - 1,500.00 1,500.00 300.00 300.00 300.00 300.00 300.00 750.00 500.00 - - - - 750.00 500.00 Term Loans from Banks (Refer Note 3 below) (f) ICICI Bank (g) Axis Bank (h) First Abu Dhabi Bank 562.50 337.50 225.00 333.33 166.67 166.66 - - 200.00 67.00 67.00 66.00 (i) Sumitomo Mitsui Banking Corporation 300.00 100.00 100.00 100.00 Deferred Payment Liabilities (j) Sales Tax Deferral (Refer Note 2 below) 8.50 5.67 2.83 - 290 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 22. Non-current Borrowings (Contd.) Particulars (ii) Secured - At Amortised Cost Redeemable Non-Convertible Debentures (a) 8.85% Series 2028 (b) 9.15% Series 2025 (c) 9.15% Series 2025 (d) 9.40% Series 2022 ICICI Bank Term Loans from Banks (Refer Note 3 below) (e) HDFC Bank (f) (g) Kotak Mahindra Bank (h) State Bank of India (i) Axis Bank Term Loans from Others (Refer Note 3 below) (j) Asian Development Bank (k) Agency Ltd. Indian Renewable Energy Development Less: Impact of recognition of borrowing at amortised cost using effective interest method. Amount Outstanding as at 31st March, 2020 Financial Year FY 20-21 FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-30 FY 30-31 and onwards K crore 213.44 106.00 125.00 210.00 16.25 16.00 25.00 - 16.25 16.00 20.00 - 16.25 16.00 20.00 210.00 16.25 16.00 20.00 - 16.25 16.00 20.00 - 132.19 26.00 20.00 - - - - - 1,667.83 660.00 712.72 1,257.91 743.32 74.38 150.00 150.94 118.67 226.67 140.00 120.00 150.94 94.94 226.65 140.00 150.00 50.94 94.94 60.00 140.00 240.00 50.94 189.98 130.00 140.00 - 50.94 381.17 100.00 717.82 - 258.02 378.21 - 315.63 - - - - 6.34 6.34 - - - - - - 2.93 - 11,609.82 1,764.02 1,646.27 2,474.13 2.93 - - 1,103.17 - 1,274.36 - - 1,532.24 1,815.63 20.47 11,589.35 Notes: 1. 2. 3. The 10.75% Redeemable Non-Convertible Debentures are redeemable at par at the end of 60 years from the date of allotment viz. 21st August, 2072. The Company has the call option to redeem the same at the end of 10 years viz. 21st August, 2022 and at the end of every year thereafter. Sales Tax Deferral is repayable in 150 installments commencing from April, 2013 and repayable in full by March, 2022. The rate of interest for term loans from banks ranges from 7.25% to 9.25% and rate of interest for term loans from others is 9.36%. 291 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 23. Lease Liabilities Accounting Policy for leases from 1st April, 2019 At inception of contract, the Company assesses whether the Contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. At inception or on reassessment of a contract that contains a lease component, the Company allocates consideration in the contract to each lease component on the basis of their relative standalone price. As a Lessee i) Right-of-use Assets The Company recognises right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, lease payments made at or before the commencement date less any lease incentives received and estimate of costs to dismantle. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows: - Plant and Equipment - 2 years - Leasehold land including Sub-surface rights - 2 to 25 years The Company presents right-to-use assets that do not meet the definition of investment property in ‘Property, Plant and Equipment'. ii) Lease Liabilities At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. In calculating the present value of lease payments, the Company generally uses its incremental borrowing rate at the lease commencement date if the discount rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. The carrying amount is remeasured when there is a change in future lease payments arising from a change in index or rate. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments or a change in the assessment of an option to purchase the underlying asset. iii) Short term leases and leases of low value of assets The Company applies the short-term lease recognition exemption to its short-term leases. It also applies the lease of low-value assets recognition exemption that are considered to be low value. Lease payments on short-term leases and leases of low value assets are recognised as expense on a straight-line basis over the lease term. Leasing arrangement as Lessee The Company has lease contracts for various items of plant, machinery, land, vehicles and other equipment used in its operations. Leases of Leasehold land including Sub-surface rights and Plant and Equipment generally have lease terms between 2 and 25 years. Generally, the Company is restricted from assigning and subleasing the leased assets. Amount recognised in the Statement of Profit and Loss Depreciation of Right-of-use assets Interest on lease liabilities Expenses related to short term leases Expenses related to leases of low value assets, excluding short term leases of low value assets K crore For the year ended 31st March, 2020 39.78 17.56 29.07 0.38 Refer Note 5A for additions to Right-Of-Use Assets and the carrying amount of Right-Of-Use Assets as at 31st March, 2020. Further, Refer Note 42.4.3 for maturity analysis of lease liabilities. 292 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 23. Lease Liabilities (Contd.) Amount as per the Statement of Cash Flows Total cash outflow of leases Non-current (i) Lease Liabilities Total Current (i) Lease Liabilities Total 24. Other Financial Liabilities - At Amortised Cost Non-current (a) Security Deposits from Customers (b) Guarantee Commission Obligation Total Current (a) Current Maturities of Non-current Borrowings (Refer Note 22) (b) Interest accrued but not due on Borrowings (c) (d) Investor Education and Protection Fund shall be credited by the following amounts namely: ** Interest accrued but not due on Borrowings from Related Party Unpaid Dividend Unpaid Matured Deposits Unpaid Matured Debentures (e) Other Payables K crore For the year ended 31st March, 2020 29.34 As at 31st March, 2020 K crore As at 31st March, 2019 K crore 237.03 237.03 41.82 41.82 Nil Nil Nil Nil As at 31st March, 2020 K crore As at 31st March, 2019 K crore 9.48 5.12 14.60 1,764.02 202.23 Nil 22.56 Nil 0.09 33.53 9.23 42.76 1,971.00 189.09 0.38 22.01 0.03 0.09 Payables for capital supplies and services Security deposits from electricity consumers Security deposits from others Financial Guarantee Obligation towards lenders of Jointly Controlled Entity [Refer Note 7(10)(b)] Other Financial Liabilities 252.33 216.72 6.47 103.74 133.57 Total 2,895.43 ** Includes amounts outstanding aggregating C 1.48 crore (31st March, 2019 - C 1.25 crore) for more than seven years pending disputes and legal cases. 350.18 234.48 6.74 Nil 41.32 2,621.62 25. Deferred Tax Liabilities (Net) (Refer Note 35) Deferred Tax Assets Deferred Tax Liabilities Net Deferred Tax Liabilities As at 31st March, 2020 K crore As at 31st March, 2019 K crore 940.99 1,248.24 307.25 1,024.21 1,607.70 583.49 293 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 26. Provisions Accounting Policy Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material). Present obligations arising under onerous contracts are recognised and measured as provisions with charge to statement of profit and loss. An onerous contract is considered to exist where the Company has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received from the contract. Defined contribution plans Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions. Defined benefits plans The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method. Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods. Past service costs are recognised in the statement of profit and loss on the earlier of: - - The date of the plan amendment or curtailment, and The date that the Company recognises related restructuring costs Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognises the following changes in the net defined benefit obligation as an expense in the statement of profit and loss: - - Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non routine settlements; and Net interest expense or income. A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs. The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds. The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates. 294 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 26. Provisions (Contd.) Current and other non-current employee benefits A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service. Liabilities recognised in respect of current employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service. Liabilities recognised in respect of other non-current employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date. Non-current Provision for Employee Benefits Compensated Absences Post-Employment Medical Benefits [Refer Note 26 (2.1) and (2.3)] Other Defined Benefit Plans [Refer Note 26 (2.1) and (2.3)] Other Employee Benefits Total Current Provision for Employee Benefits Compensated Absences Post-Employment Medical Benefits [Refer Note 26 (2.1) and (2.3)] Other Defined Benefit Plans [Refer Note 26 (2.1) and (2.3)] Other Employee Benefits Total Employee Benefit Plans As at 31st March, 2020 K crore As at 31st March, 2019 K crore 87.99 59.12 63.49 11.86 80.71 45.81 48.99 20.04 222.46 195.55 6.17 2.09 53.21 0.55 62.02 5.00 1.80 6.09 1.85 14.74 1. Defined Contribution plan The Company makes superannuation fund contributions to defined contribution plan for eligible employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs. The Company has no obligation, other than the contribution payable to the fund. The Company recognises contribution payable to the superannuation fund scheme as an expense, when an employee renders the related service. The Company has recognised ₹ 9.32 crore (31st March, 2019 - ₹ 9.19 crore) for superannuation contribution in the Statement of Profit and Loss. The said amount is excluding of amounts recognised by the Strategic Engineering Division (SED) (Discontinued operations). The contribution payable to the plan by the Company is at rates specified in the rules of the scheme. 2. Defined benefit plans 2.1 The Company operates the following unfunded/funded defined benefit plans: Funded: Provident Fund The Company makes Provident Fund contributions to defined benefit plans for eligible employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions as 295 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 26. Provisions (Contd.) specified under the law are paid to the provident fund set up as a trust by the Company. The Company is generally liable for annual contributions and any shortfall in the fund assets based on the government specified minimum rates of return and recognises such contributions and shortfall, if any, as an expense in the year it is incurred. Having regard to the assets of the fund and the return on the investments, the Company expects shortfall of ₹ 10.52 crore which has been provided as an expenditure during the year. In terms of guidance note issued by the Institute of Actuaries of India, the actuary has provided a valuation of Provident fund liability based on the assumptions listed and determined the short fall of ₹ 10.52 crore as at 31st March, 2020 (31st March, 2019 - ₹ 8.27 crore) The significant assumptions used for the purpose of the actuarial valuations were as follows: Particulars Interest rate Discount rate Contribution during the year (₹ crore) Short fall provided as expenditure for the year (₹ crore) The movements in the net defined benefit obligations are as follows: 31st March, 2020 31st March, 2019 8.50% p.a. 6.50% p.a. 21.15 10.52 8.65% p.a. 7.40% p.a. 19.18 8.27 Present value of obligation K crore Fair value of plan assets K crore Funded Plan: Balance as at 1st April, 2018 Current service cost Interest Cost/(Income) Amount recognised in Statement of Profit and Loss Remeasurement (gains)/losses Return on plan assets excluding amounts included in interest cost/(income) Actuarial (gains)/losses arising from changes in demographic assumptions Actuarial (gains)/losses arising from changes in financial assumptions Actuarial (gains)/losses arising from experience Amount recognised in Other Comprehensive Income Employer contribution Employee contribution Benefits paid Acquisitions credit/(cost) Balance as at 31st March, 2019 Balance as at 31st March, 2019 Current service cost Interest Cost/(Income) Amount recognised in Statement of Profit and Loss Remeasurement (gains)/losses Return on plan assets excluding amounts included in interest cost/(income) Actuarial (gains)/losses arising from changes in demographic assumptions Actuarial (gains)/losses arising from changes in financial assumptions Actuarial (gains)/losses arising from experience 296 Net Amount K crore 0.59 20.75 6.67 27.42 710.60 Nil 50.70 50.70 10.83 (10.83) Nil Nil Nil 10.83 19.74 44.89 (90.53) 5.81 752.04 752.04 Nil 57.21 57.21 (40.00) Nil Nil Nil Nil 4.46 6.37 Nil (19.74) Nil Nil Nil 8.27 8.27 22.02 (0.87) 21.15 40.00 (1.59) (3.30) 13.84 711.19 20.75 57.37 78.12 Nil Nil 4.46 6.37 10.83 Nil 44.89 (90.53) 5.81 760.31 760.31 22.02 56.34 78.36 Nil (1.59) (3.30) 13.84 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 26. Provisions (Contd.) Funded Plan: Amount recognised in Other Comprehensive Income Employer contribution Employee contribution Benefits paid Acquisitions credit/(cost) Balance as at 31st March, 2020 Gratuity Present value of obligation K crore Fair value of plan assets K crore 8.95 Nil 49.34 (98.17) 8.97 807.76 (40.00) 21.13 49.34 (98.17) 8.97 750.52 Net Amount K crore 48.95 (21.13) Nil Nil Nil 57.24 The Company has a defined benefit gratuity plan. The gratuity plan is primarily governed by the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of five years are eligible for gratuity. The level of benefits provided depends on the member's length of service and salary at the retirement date. The gratuity plan is funded plan. The fund has the form of a trust and is governed by Trustees appointed by the Company. The Trustees are responsible for the administration of the plan assets and for the definition of the investment strategy in accordance with the regulations. The funds are deployed in recognised insurer managed funds in India. 2.2 The principal assumptions used for the purposes of the actuarial valuations were as follows: Valuation as at Discount Rate Salary Growth Rate - Management - Non-Management Turnover Rate - Age 21 to 44 years - Management - Non-Management Turnover Rate - Age 45 years and above - Management - Non-Management Pension Increase Rate Mortality Table Annual Increase in Healthcare Cost 31st March, 2020 31st March, 2019 6.50% p.a. 7.40% p.a. 7% p.a. 5% p.a. 6% p.a. 0.50% p.a. 2% p.a. 0.50% p.a. 3% p.a. 7% p.a. 5% p.a. 2.50% p.a. 0.50% p.a. 1% p.a. 0.50% p.a. 3% p.a. Indian Assured Lives Mortality (2006-08) (modified) Ult Indian Assured Lives Mortality (2006-08) (modified) Ult 8% p.a. 8% p.a. 297 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 26. Provisions (Contd.) 2.3 The amounts recognised in the Standalone Ind AS financial statements and the movements in the net defined benefit obligations over the year are as follows: Funded Plan: Balance as at 1st April, 2018 Current service cost Interest Cost/(Income) Less: Amount recognised in Statement of Profit and Loss - Discontinued Operations Amount recognised in Statement of Profit and Loss - Continuing Operations Remeasurement (gains)/losses Return on plan assets excluding amounts included in interest cost/(income) Actuarial (gains)/losses arising from changes in demographic assumptions Actuarial (gains)/losses arising from changes in financial assumptions Actuarial (gains)/losses arising from experience Add/(Less): Amount recognised in Other Comprehensive Income - Discontinued Operations Amount recognised in Other Comprehensive Income Benefits paid Acquisitions credit/(cost) Add: Amounts recognised in current year - Discontinued Operations Balance as at 31st March, 2019 Balance as at 31st March, 2019 * Current service cost Interest Cost/(Income) Less: Amount recognised in Statement of Profit and Loss - Discontinued Operations Amount recognised in Statement of Profit and Loss - Continuing Operations Remeasurement (gains)/losses Return on plan assets excluding amounts included in interest cost/(income) Actuarial (gains)/losses arising from changes in demographic assumptions Actuarial (gains)/losses arising from changes in financial assumptions Actuarial (gains)/losses arising from experience Less: Amount recognised in Other Comprehensive Income - Discontinued Operations Amount recognised in Other Comprehensive Income Benefits paid Acquisitions credit/(cost) Add: Amounts recognised in current year - Discontinued Operations Balance as at 31st March, 2020 * * Net asset is classified as "Other Current Assets". Present value of obligation K crore Fair value of plan assets K crore 237.80 15.04 18.24 (0.58) 32.70 Nil Nil 5.79 15.97 Nil 21.76 (30.49) (1.52) 0.58 260.83 260.83 15.80 20.72 1.30 37.82 Nil (2.27) 16.61 (0.95) (0.21) 13.18 (35.80) (1.05) (1.08) 273.90 (264.21) Nil (20.34) Nil (20.34) 4.26 Nil Nil Nil Nil 4.26 Nil Nil Nil (280.29) (280.29) Nil (20.74) Nil (20.74) (8.32) Nil Nil Nil Nil (8.32) Nil Nil Nil (309.35) Net Amount K crore (26.41) 15.04 (2.10) (0.58) 12.36 4.26 Nil 5.79 15.97 Nil 26.02 (30.49) (1.52) 0.58 (19.46) (19.46) 15.80 (0.02) 1.30 17.08 (8.32) (2.27) 16.61 (0.95) (0.21) 4.86 (35.80) (1.05) (1.08) (35.45) 298 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 26. Provisions (Contd.) Unfunded: Post Employment Medical Benefits The Company provides certain post-employment health care benefits to superannuated employees at some of its locations. In terms of the plan, the retired employees can avail free medical check-up and medicines at Company's facilities. Pension (including Director pension) The Company operates a defined benefit pension plan for employees who have completed 15 years of continuous service. The plan provides benefits to members in the form of a pre-determined lumpsum payment on retirement. Executive Director, on retirement, is entitled to pension payable for life including HRA benefit. The level of benefit is approved by the Board of Directors of the Company from time to time. Ex-Gratia Death Benefit The Company has a defined benefit plan granting ex-gratia in case of death during service. The benefit consists of a pre- determined lumpsum amount along with a sum determined based on the last drawn basic salary per month and the length of service. Retirement Gift The Company has a defined benefit plan granting a pre-determined sum as retirement gift on superannuation of an employee. Unfunded Plan: Balance as at 1st April, 2018 Current service cost Past service cost Past service cost - Plan amendments Interest Cost/(Income) Add/(Less): Amount recognised in Statement of Profit and Loss - Discontinued Operations Amount recognised in Statement of Profit and Loss - Continuing Operations Remeasurement (gains)/losses Actuarial (gains)/losses arising from changes in demographic assumptions Actuarial (gains)/losses arising from changes in financial assumptions Actuarial (gains)/losses arising from experience Add/(Less): Amount recognised in Other Comprehensive Income - Discontinued Operations Amount recognised in Other Comprehensive Income Benefits paid Acquisitions credit/(cost) Add: Amounts recognised in current year - Discontinued Operations Less: Transferred to Assets/Liabilities held for sale - Discontinued Operations Balance as at 31st March, 2019 Balance as at 31st March, 2019 Current service cost Past service cost Past service cost - Plan amendments Interest Cost/(Income) Add/(Less): Amount recognised in Statement of Profit and Loss - Discontinued Operations Amount recognised in Statement of Profit and Loss - Continuing Operations Amount K crore 96.47 4.16 0.24 4.58 7.78 (0.44) 16.32 Nil 3.17 (8.35) 0.30 (4.88) (2.85) 0.05 0.44 (2.86) 102.69 102.69 5.24 Nil 13.21 9.15 0.07 27.67 299 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 26. Provisions (Contd.) Unfunded Plan: Remeasurement (gains)/losses Actuarial (gains)/losses arising from changes in demographic assumptions Actuarial (gains)/losses arising from changes in financial assumptions Actuarial (gains)/losses arising from experience (Less): Amount recognised in Other Comprehensive Income - Discontinued Operations Amount recognised in Other Comprehensive Income Benefits paid Acquisitions credit/(cost) Add: Amounts recognised in current year - Discontinued Operations Balance as at 31st March, 2020 Employee Benefit Plans Amount K crore (4.31) 11.36 (9.48) 0.41 (2.02) (7.19) Nil (0.48) 120.67 2.4 Sensitivity analysis The sensitivity of the defined benefit obligations to changes in the weighted principal assumptions is: Change in assumption Increase in assumption Decrease in assumption 31st March, 2020 31st March, 2019 0.50% 0.50% 1 year 0.50% 0.50% 0.50% 1 year 0.50% Decrease by Increase by Decrease by Increase by 31st March, 2020 K crore 15.83 11.32 5.43 4.81 31st March, 2019 K crore 15.23 11.91 4.09 3.59 31st March, 2020 K crore 17.19 10.70 5.35 4.30 31st March, 2019 K crore 16.51 11.22 4.00 3.22 Increase by Decrease by Increase by Decrease by Discount rate Salary/Pension growth rate Mortality rates Healthcare cost The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet. The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period. These plans typically expose the Company to actuarial risks such as: Investment Risk, Interest Risk, Longevity Risk and Salary Risk. Investment Risk The present value of the defined benefit plan liability is calculated using a discount rate which is Interest Risk Longevity Risk Salary Risk determined by reference to market yields at the end of the reporting period on government bonds. A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan debt investments. The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability. The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability. 300 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 26. Provisions (Contd.) 2.5 The expected maturity analysis of undiscounted defined benefit obligation is as follows: Funded - Provident Fund Funded - Gratuity Unfunded 31st March, 2020 K crore 31st March, 2019 K crore 31st March, 2020 K crore 31st March, 2019 K crore 31st March, 2020 K crore 31st March, 2019 K crore Within 1 year Between 1 - 2 years Between 2 - 3 years Between 3 - 4 years Between 4 - 5 years Beyond 5 years 67.02 105.84 96.20 85.16 84.05 413.74 53.15 81.42 85.81 80.45 71.29 365.06 20.87 33.66 32.08 30.55 34.41 21.75 32.76 34.02 31.99 31.86 167.80 176.73 8.85 9.08 9.16 9.29 9.15 65.39 8.58 9.07 9.11 9.21 9.41 50.58 The weighted average duration of the defined benefit obligation is 7.4 years (31st March, 2019 - 8.1 years). The contribution expected to be made by the Company during the financial year 2020-21 is ₹ 23.01 crore. 2.6 Risk exposure: Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below: Asset volatility: The plan liabilities are calculated using a discount rate set with reference to government bond yield. If plan assets underperform this yield, it will result in deficit. These are subject to interest rate risk. To offset the risk, the plan assets have been deployed in high grade insurer managed funds. Inflation rate risk: Higher than expected increase in salary and medical cost will increase the defined benefit obligation. Demographic risk: This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligations is not straight forward and depends upon the combination of salary increase, discount rate and vesting criterion. 2.7 Major categories of plan assets: Plan assets are funded with the trust set up by the Company. The trust invests the funds in various financial instruments. Major categories of plan assets are as follows: Quoted Equity Instruments Debt Instruments Government Securities Others Cash & Cash Equivalents Provident Fund Gratuity As at 31st March, 2020 As at 31st March, 2019 As at 31st March, 2020 K crore % K crore 30.02 195.14 405.28 4% 26% 54% 13.57 276.99 339.32 % 2% 37% 45% K crore 58.78 129.93 89.70 % 19% 42% 29% As at 31st March, 2019 K crore % 56.07 60.07 103.77 20% 21% 37% 120.08 750.52 16% 100% 122.16 752.04 16% 100% 30.94 309.35 10% 100% 60.38 280.29 22% 100% 301 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 27. Other Liabilities Non-current Consumers' Benefit Account (Refer Note 39a.) Deferred Revenue - Service Line Contributions from Consumers Deferred Rent Liability Total Current Statutory Liabilities Advance from Customers/Public Utilities Statutory Consumer Reserves (Refer Note 39a.) Liabilities towards Consumers Other Liabilities Total 28. Current Borrowings - At Amortised Cost Unsecured From Banks (a) Term Loans (i) Repayable on Demand (ii) Others (b) Bank Overdraft - Repayable on Demand From Related Parties From Others Commercial Paper [maximum amount outstanding during the year is C 6,700 crore (31st March, 2019 - C 6,550 crore)] Secured From Banks (a) Term Loans Total As at 31st March, 2020 K crore As at 31st March, 2019 K crore Nil 115.91 45.43 161.34 121.97 149.68 168.00 60.76 2.46 502.87 21.94 116.87 44.73 183.54 156.79 117.16 561.76 11.50 1.91 849.12 As at 31st March, 2020 K crore As at 31st March, 2019 K crore 500.00 90.00 1.05 105.45 800.00 200.00 2.19 Nil 5,455.81 6,152.31 5,729.61 6,731.80 60.00 60.00 Nil Nil 6,212.31 6,731.80 Notes: 1. 2. The rate of interest for term loans from banks ranges from 8.00% to 9.40% and loan from others ranges from 5.56% to 8.04%. The term loan mentioned in (a) above have been secured by pari passu first charge over all current assets of the Company, present and future, except for specific wind assets. 29. Current Tax Liabilities Income Tax Payable (Net) Total 302 As at 31st March, 2020 K crore As at 31st March, 2019 K crore 107.67 107.67 107.67 107.67 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 30. Revenue from Operations Revenue recognition Accounting Policy Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Description of performance obligations are as follows : (i) Sale of Power - Generation (Thermal and Hydro) Revenue from sale of power is recognised net of cash discount over time for each unit of electricity delivered. The Company as per the prevalent tariff regulations is required to recover its Annual Revenue Requirement ('ARR') comprising of expenditure on account of fuel cost, operations and maintenance expenses, financing costs, taxes and assured return on regulator approved equity with additional incentive for operational efficiencies. Accordingly, rate per unit is determined using input method based on the Company's efforts to the satisfaction of a performance obligation to deliver power. As per tariff regulations, the Company determines ARR and any surplus/shortfall in recovery of the same is accounted as revenue. (ii) Sale of Power - Generation (Wind and Solar) Revenue from sale of power is recognised net of cash discount over time for each unit of electricity delivered at the contracted rate. (iii) Transmission of Power Revenue from transmission of power is recognised net of cash discount over time for transmission of electricity. The Company as per the prevalent tariff regulations is required to recover its Annual Revenue Requirement ('ARR') comprising of expenditure on account of operations and maintenance expenses, financing costs, taxes and assured return on regulator approved equity with additional incentive for operational efficiencies. Input method is used to recognize revenue based on the Company's efforts or inputs to the satisfaction of a performance obligation to deliver power. As per tariff regulations, the Company determines ARR and any surplus/shortfall in recovery of the same is accounted as revenue. (iv) Sale of Power - Distribution Revenue from sale of power is recognised net of cash discount over time for each unit of electricity delivered at the pre determined rate. (v) Rendering of Services Revenue from a contract to provide services is recognised over time based on : Input method where the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of performance obligation. Revenue, including estimated fees or profits, are recorded proportionally based on measure of progress. Output method where direct measurements of value to the customer based on survey's of performance completed to date. Revenue is recognised net of cash discount at a point in time at the contracted rate. (vi) Consumers are billed on a monthly basis and are given average credit period of 30 to 45 days for payment. No delayed payment charges ('DPC') is charged for the initial 30 days from the date of receipt of invoice by customers. Thereafter, DPC is charged at the rate prescribed by the Power Purchase Agreement on the outstanding balance once the dues are received. Revenue in respect of delayed payment charges and interest on delayed payments leviable as per the relevant contracts are recognised on actual realisation or accrued based on an assessment of certainty of realization supported by either an acknowledgement from customers or on receipt of favourable order from regulator / authorities. (vii) In the regulated operations of the Company where tariff recovered from consumers is determined on cost plus return on equity, the Income tax cost is pass through cost and accordingly the Company recognizes Deferred tax recoverable/ payable against any Deferred tax expense/ income. The same is included in 'Revenue from Operations' in case of Generation and Transmission Divisions. 303 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 30. Revenue from Operations (Contd.) There is no significant judgement involved while evaluating the timing as to when customers obtain control of promised goods and services. (a) Revenue from Power Supply and Transmission Charges Add/(Less): Income to be adjusted in future tariff determination (Net) Add/(Less): Income to be adjusted in future tariff determination (Net) in respect of earlier years (Refer Note 19) Add/(Less): Deferred Tax Recoverable / (Payable) (Refer Note 3.11.3) For the year ended 31st March, 2020 K crore 6,410.55 (198.98) For the year ended 31st March, 2019 K crore 6,479.75 255.34 5.49 31.41 6,248.47 (182.31) 322.42 6,875.20 (b) Revenue from Power Supply - Assets Under Finance Lease 1,051.27 1,030.64 (c) Project/Operation Management Services (d) Income from Finance Lease (e) Other Operating Revenue Rental of Land, Buildings, Plant and Equipment, etc. Income in respect of Services Rendered Amortisation of Service Line Contributions Income from Storage and Terminalling Sale of Fly Ash Sale of Carbon Credits Sale of Renewable Energy Certificates Miscellaneous Revenue 140.71 125.03 88.91 86.70 12.15 97.60 7.99 15.22 1.86 6.25 14.66 41.30 197.03 17.14 62.72 7.46 15.39 2.21 3.89 0.90 27.97 137.68 Total 7,726.39 8,255.25 Note: Revenue from operations for the year ended 31st March, 2019 includes Regulatory Assets on Deferred Tax Liability expected to be recovered from customers amounting to ₹ 272.00 crore recognised pursuant to extension of Power Purchase Agreement for its generating plants for five years w.e.f 1st April, 2019. Details of Revenue from Contract with Customers Particulars Total Revenue from Contract with Customers Add: Cash Discount/Rebates etc. Total Revenue as per Contracted Price For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 K crore 7,590.18 38.28 7,628.46 8,112.09 37.08 8,149.17 Transaction Price - Remaining Performance Obligation The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognised as at the end of the reporting period and an explanation as to when the Company expects to recognise these amounts in revenue. Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the remaining performance obligation related disclosures for contracts as the revenue recognised corresponds directly with the value to the customer of the entity's performance completed to date. The aggregate value of performance obligations that are partially unsatisfied as at 31st March, 2020, other than those meeting the exclusion criteria mentioned above is ₹ 18.59 crore (31st March, 2019 - ₹ Nil). The Company expects to recognise it as revenue within next one year. 304 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 30. Revenue from Operations (Contd.) Revenue is disaggregated by type and nature of product or services. The table also includes the reconciliation of the disaggregated revenue with the Company's reportable segment. Nature of Goods/Services Revenue from Contracts with Customers Other than revenue from Contracts with Customers Total For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 K crore For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 K crore For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 K crore Generation of Power - Thermal and Hydro Sale of Power Sale of Power from Assets Under Lease Project/Operation Management Services Income from Finance Lease Others Total (A) Generation of Power - Wind and Solar Sale of Power Others Total (B) Transmission and Distribution of Power Transmission of Power Distribution of Power Net Movement in Regulatory Deferral Balances Project/Operation Management Services Others Total (C) Others (D) 1,588.73 1,051.27 100.94 Nil 21.70 2,762.64 2,344.24 1,030.64 109.59 Nil 2.21 3,486.68 95.24 14.64 109.88 99.24 0.89 100.13 775.15 3,789.37 Nil 33.83 44.45 4,642.80 661.08 3,770.62 Nil 13.04 5.21 4,449.95 30.76 34.83 Unallocable Revenue (E) 44.10 40.50 Nil Nil Nil 88.91 15.52 104.43 Nil 8.02 8.02 Nil Nil (651.40) Nil 20.76 (630.64) Nil 3.00 Nil Nil Nil 86.70 31.28 117.98 1,588.73 1,051.27 100.94 88.91 37.22 2,867.07 2,344.24 1,030.64 109.59 86.70 33.49 3,604.66 Nil 4.65 4.65 95.24 22.66 117.90 99.24 5.54 104.78 Nil Nil (146.58) Nil 16.96 (129.62) 775.15 3,789.37 (651.40) 33.83 65.21 4,012.16 661.08 3,770.62 (146.58) 13.04 22.17 4,320.33 Nil 30.76 34.83 3.57 47.10 44.07 Revenue from Continued Operations (A + B + C +D + E) 7,590.18 8,112.09 (515.19) (3.42) 7,074.99 8,108.67 Revenue from Discontinued Operations 343.74 143.59 Nil Nil 343.74 143.59 Reconciliation of Revenue Revenue from Continued Operations as per above table Net Movement in Regulatory Deferral Balances Total Revenue from Operations For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 K crore 7,074.99 (651.40) 7,726.39 8,108.67 (146.58) 8,255.25 305 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 30. Revenue from Operations (Contd.) Contract Balances Contract Assets Recoverable from Consumers Non-current Current Total Contract Assets Contract liabilities Liabilities towards Consumers Current Total Contract Liabilities Receivables Trade Receivables (Gross) Unbilled Revenue for passage of time Recoverable from Consumers (Less): Allowances for Doubtful Debts Net Receivables Total As at 31st March, 2020 K crore As at 31st March, 2019 K crore 960.84 Nil 960.84 404.79 787.00 1,191.79 60.76 60.76 1,151.39 83.41 221.45 (42.71) 1,413.54 2,435.14 11.50 11.50 1,488.95 41.56 Nil (46.75) 1,483.76 2,687.05 Contract Assets Contract asset is the right to consideration in exchange for goods or services transferred to the customer. Contract assets are transferred to receivables when the rights become unconditional. Contract Liabilities A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the performance obligation is satisfied. Significant changes in the contract assets and the contract liabilities balances during the year are as follows: Particulars Opening Balance Recoverable from consumers Liabilities towards consumers Income to be adjusted in future tariff determination (Net) Income to be adjusted in future tariff determination in respect of earlier years (Net) Revenue recognised during the year Refund to customers (including Company's distribution business) Deferred tax recoverable/(payable) Deferred tax recoverable/(payable) on account of New Tax Regime [Refer Note 35(i)] Others Closing Balance Recoverable from consumers Liabilities towards consumers 306 As at 31st March, 2020 K crore As at 31st March, 2019 K crore 1,191.79 (11.50) 1,180.29 (198.98) 5.49 Nil 48.87 31.41 (167.00) Nil (280.21) 960.84 (60.76) 900.08 812.36 (404.22) 408.14 255.34 (182.31) 100.00 288.70 322.42 Nil (12.00) 772.15 1,191.79 (11.50) 1,180.29 (A) (B) (A + B) The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 31. Other Income Accounting Policy Dividend and Interest income Dividend income from investments is recognised when the shareholder's right to receive payment has been established. Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition. For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 K crore (a) Interest Income (i) On Financial Assets carried at Amortised Cost Interest on Banks Deposits Interest on Overdue Trade Receivables Interest on Non-current Investment - Contingency Reserve Fund Interest on Non-current Investment - Deferred Tax Liability Fund Interest on Financial Assets - Subsidiaries Other Interest (ii) Interest on income-tax Refund (b) Dividend Income From Non-current Investments Subsidiaries Joint Ventures Associates Others - Equity Investments Designated as FVTOCI (c) Gain/(Loss) on Investments Gain on Sale/Fair Value of current investment measured at FVTPL Gain on Sale of Investment in non-current investment measured at Amortised cost (d) Other Non-operating Income Guarantee Commission from Subsidiaries and Joint Ventures (Refer Note below) Gain/(Loss) on Disposal of Property, Plant and Equipment (Net) Delayed Payment Charges Other Income Total Note: 4.82 65.69 9.90 7.53 18.58 Nil 106.52 13.03 2.73 2.93 10.42 20.40 44.39 4.01 84.88 Nil 119.55 84.88 267.18 85.09 9.68 6.86 368.81 13.41 9.06 22.47 60.63 3.52 6.61 1.03 71.79 283.40 85.40 9.68 5.43 383.91 6.29 0.88 7.17 20.95 12.72 6.34 0.38 40.39 582.62 516.35 During the year, pursuant to Advance Pricing Agreement with Income Tax Department, the Company has recognised guarantee commission income of ₹ 38.30 crore from its subsidiaries and joint ventures pertaining to earlier years. 307 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 32. Employee Benefits Expense Salaries and Wages Contribution to Provident Fund Contribution to Superannuation Fund Retiring Gratuities Compensated Absences Pension Scheme Staff Welfare Expenses Less: Employee Cost Capitalised Employee Cost Inventorised Total 33. Finance Costs Accounting Policy For the year ended 31st March, 2020 K crore 468.42 21.15 9.32 17.08 24.96 10.78 93.58 645.29 For the year ended 31st March, 2019 K crore 500.72 27.42 9.19 12.36 22.15 13.23 88.51 673.58 24.59 9.99 34.58 26.96 9.05 36.01 610.71 637.57 Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in statement of profit and loss in the period in which they are incurred. (a) Interest Expense: On Borrowings - At Amortised Cost Interest on Debentures Interest on Loans - Banks, Financial Institutions and Commercial Papers Interest on Loans - Subsidiaries Others Interest on Consumer Security Deposits - At Amortised cost Interest on Lease Liabilities - At Amortised cost Other Interest and Commitment Charges (Refer Note 39b.) Less: Interest Capitalised (b) Other Borrowing Costs: Other Finance Costs Foreign Exchange Loss/(Gain) on Borrowings (Net) Total Note: For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 K crore 412.38 1,049.22 4.91 21.99 17.56 0.48 1,506.54 16.44 1,490.10 20.28 Nil 20.28 458.37 923.21 3.98 20.12 Nil 92.53 1,498.21 22.21 1,476.00 21.64 2.71 24.35 1,510.38 1,500.35 The weighted average capitalisation rate on the Company's general borrowings is 8.23 % p.a. (31st March, 2019 - 8.63 % p.a.). 308 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 34. Other Expenses Consumption of Stores and Oil Rental of Land, Buildings, Plant and Equipment Repairs and Maintenance - (i) To Buildings and Civil Works (ii) To Machinery and Hydraulic Works (iii) To Furniture and Vehicles Rates and Taxes Insurance Other Operation Expenses Ash Disposal Expenses Travelling and Conveyance Expenses Consultants' Fees Auditors' Remuneration [Refer Note (i) below] Cost of Services Procured Bad Debts Net Loss on Foreign Exchange Allowance for Doubtful Debts and Advances (Net) Donations [Refer Note (iii) below] Legal Charges Corporate Social Responsibility Expenses [Refer Note (ii) below] Transfer to Statutory Consumer Reserve Miscellaneous Expenses Total (i) Payment to the auditors For Statutory Audit For Taxation Matters For Other Services For Reimbursement of Expenses Goods and Service Tax on above Total (ii) Corporate Social Responsibility Expenses Contribution to Tata Power Community Development Trust Expenses incurred by the Company Total For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 K crore 36.61 3.89 96.09 211.60 4.63 312.32 67.62 29.37 86.58 16.84 18.60 10.38 5.14 93.71 6.05 10.59 (0.19) Nil 21.61 3.80 17.00 16.77 23.58 29.62 81.52 200.26 4.15 285.93 52.71 21.48 106.10 13.42 22.56 19.65 5.09 106.24 Nil 11.40 19.11 20.00 24.93 12.66 16.00 11.39 756.69 801.87 For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 K crore 3.54 0.12 0.55 0.15 0.78 5.14 3.54 0.13 0.48 0.22 0.72 5.09 For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 K crore 3.16 0.64 3.80 12.05 0.61 12.66 309 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 34. Other Expenses (Contd.) Amount required to be spent as per section 135 of the Act Amount spent during the year on: (a) Construction/Acquisition of asset (b) On purposes other than (a) above For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 K crore 3.04 Nil 3.80 12.65 Nil 12.66 (iii) Donation Donation of ₹ Nil was given to Progressive Electoral Trust (31st March, 2019 - ₹ 20.00 crore). 35. Income taxes Accounting Policy Current Tax Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognised outside statement of profit and loss is recognised outside statement of profit and loss (either in other comprehensive income or in equity). Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Deferred Tax Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Standalone Ind AS financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognised as deferred tax asset in the balance sheet. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. For operations carried out under tax holiday period (Section 80IA benefits of Income Tax Act, 1961), deferred tax assets or liabilities, if any, have been established for the tax consequences of those temporary differences between the carrying values of assets and liabilities and their respective tax bases that reverse after the tax holiday ends. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis. Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. 310 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 35. (i) 1. Income taxes (Contd.) Income Tax Expenses Income taxes recognised in the statement of profit and loss (Continuing Operations) Current tax Deferred tax Deferred tax relating to earlier years Remeasurement of Deferred Tax on account of New Tax Regime (Net) (Refer Note below) Total income tax expense 31st March, 2020 K crore 18.61 73.08 (24.51) (275.00) (207.82) 31st March, 2019 K crore 110.88 331.58 10.00 Nil 452.46 Note: Pursuant to the Taxation Laws (Amendment) Act, 2019 which is effective from 1st April, 2019, domestic companies have the option to pay income tax at 22% plus applicable surcharge and cess (‘New Tax Regime’) subject to certain conditions. Based on the Company's assessment of the expected year of transition to the New Tax Regime, the Company has remeasured the deferred tax liabilities and also reassessed the recoverability of Minimum Alternate Tax (‘MAT’). Accordingly, the Company has recognised deferred tax income of ₹ 275.00 crore after adjusting the MAT credit write off. Further, the Company has also remeasured its regulatory asset balance against deferred tax liabilities and has recognised expense of ₹ 98.00 crore pertaining to distribution business and ₹ 167.00 crore for generation and transmission business. 2. Income taxes recognised in the statement of profit and loss (Discontinued Operations) Current tax Deferred tax Total income tax expense 31st March, 2020 K crore Nil (32.41) (32.41) 31st March, 2019 K crore (71.92) 5.94 (65.98) The income tax expense for the year can be reconciled to the accounting profit as follows: Profit/(Loss) before tax Continuing Operation Profit/(Loss) before tax Discontinuing Operation Profit/(Loss) Before Tax Income tax expense (Refer Note 1 below) Add/(Less) tax effect on account of : Provision for impairment and adjustment of earlier capital loss on sale of investments Non-Deductible expenses Reversal of deferred tax during tax holiday period Unrecognised tax credit (MAT) for the current year Remeasurement of deferred tax on account of New Tax Regime (Net) Exempt income Reversal of impairment of non-current investments and related obligations True up impact basis income tax return Income taxed at lower rate Income not taxable during tax holiday period Tax benefit on interest on perpetual securities recognised in other equity (Refer Note 3.11.2) Change in presentation of deferred tax recoverable/payable Income tax expenses recognised in statement of profit and loss Tax expense for the Continuing Operations Tax expense for the Discontinued Operations Income tax expense recognised in statement of profit and loss 31st March, 2020 K crore 31st March, 2019 K crore 350.53 (442.64) (92.11) 2,347.00 (191.82) 2,155.18 (32.19) 753.11 122.63 88.57 34.08 15.38 (275.00) (83.27) (82.12) (24.51) (3.80) Nil Nil Nil (240.23) (207.82) (32.41) (240.23) (149.71) 29.87 41.08 23.27 Nil (85.74) Nil 10.00 (9.19) (19.11) (60.12) (146.98) 386.48 452.46 (65.98) 386.48 311 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 35. Income taxes (Contd.) Notes: 1. The tax rate used for the years 2019-20 and 2018-19 reconciliations above is the corporate tax rate of 34.944% payable by corporate entities in India on taxable profits under the Indian tax law. 2. The rate used for calculation of Deferred tax for 2019-20 is 34.944% and 25.17% for deferred tax expected to be reversed in the New Tax Regime and 34.944% for 2018-19, being statutory enacted rates at Balance Sheet date. 3. Income tax recognised in other comprehensive income 31st March, 2020 K crore 31st March, 2019 K crore (0.77) (0.77) (17.40) Nil (17.40) (18.17) (18.17) (6.99) (6.99) Nil 0.02 0.02 (6.97) (6.97) 31st March, 2020 K crore 31st March, 2019 K crore Nil Nil (0.40) (0.40) 31st March, 2020 K crore 31st March, 2019 K crore (18.17) (18.17) (7.37) (7.37) As at 31st March, 2020 K crore As at 31st March, 2019 K crore 940.99 1,248.24 307.25 1,024.21 1,607.70 583.49 Current Tax Remeasurement of defined benefit obligation Deferred tax Remeasurements of defined benefit obligation Net fair value gain on investments in equity shares at FVTOCI Total income tax recognised in other comprehensive income Items that will not be reclassified to statement of profit and loss 4. Income tax recognised in other comprehensive income (Discontinuing Operations) Current Tax Remeasurement of defined benefit obligation 5. Bifurcation of the total income tax recognised in other comprehensive income into: Items that will not be reclassified to statement of profit and loss (ii) Deferred Tax Deferred Tax Assets Deferred Tax Liabilities Deferred Tax Liabilities (Net) 312 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 35. Income taxes (Contd.) 2019-20 Opening balance Recognised in profit or loss (including discontinued operation) Recognised in other comprehensive Income (including discontinued operation) Deferred tax assets in relation to Allowance for Doubtful Debts, Deposits and Advances Provision for Employee Benefits and Others Minimum Alternate Tax Credit Capital loss on sale of investments and indexation benefit available on investments Lease Liability Business Loss or Unabsorbed Depreciation Deferred tax liabilities in relation to Property, Plant and Equipment (including finance leases) Right of use asset Others 29.24 51.84 517.51 425.62 Nil Nil 1,024.21 1,578.04 Nil 29.66 1,607.70 (2.39) (2.87) (80.00) (45.65) 12.40 17.89 (100.62) (344.56) 10.00 (24.90) (359.46) Nil 17.40 Nil Nil Nil Nil 17.40 Nil Nil Nil Nil Deferred Tax Liabilities (Net) 583.49 (258.84) (17.40) 2018-19 Deferred tax assets in relation to Allowance for Doubtful Debts, Deposits and Advances Provision for Employee Benefits and Others Minimum Alternate Tax Credit Capital loss on sale of investments and indexation benefit available on investments Deferred tax liabilities in relation to Property, Plant and Equipment (including finance leases) Others Opening balance Recognised in profit or loss (including discontinued operation) Recognised in other comprehensive Income (including discontinued operation) 23.96 60.92 517.51 708.02 1,310.41 1,516.72 29.68 1,546.40 5.28 (9.08) Nil (282.40) (286.20) 61.32 Nil 61.32 Nil Nil Nil Nil Nil Nil (0.02) (0.02) K crore Closing balance 26.85 66.37 437.51 379.97 12.40 17.89 940.99 1,233.48 10.00 4.76 1,248.24 307.25 K crore Closing balance 29.24 51.84 517.51 425.62 1,024.21 1,578.04 29.66 1,607.70 Deferred Tax Liabilities (Net) 235.99 347.52 (0.02) 583.49 Notes: 1. During the year ended 31st March, 2020, the management has reassessed the recoverability of unrecognised MAT credit and MAT credit amounting to ₹ 97.52 crore (31st March, 2019 - ₹149.19 crore) has not been recognised. 2. Considering the uncertainity over the realisibility, the Company has not recognized deferred tax asset to the extent of ₹ 360.17 crore (31st March, 2019 - ₹ 306.94 crore) on capital loss on sale of investments and indexation benefits on investments classified as asset held for sale. 3. The expiry of unrecognised deferred tax asset is as detailed below: As at 31st March, 2020 Unrecognised deferred tax assets Within one year Greater than one year, less than five years Greater than five years No expiry date Capital Loss on sale of investment and indexation benefit MAT credit Total Nil Nil Nil Nil Nil Nil 360.17 97.52 457.69 Nil Nil Nil K crore Closing balance 360.17 97.52 457.69 313 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 35. Income taxes (Contd.) As at 31st March, 2019 Unrecognised deferred tax assets Within one year Greater than one year, less than five years Greater than five years No expiry date Capital Loss on sale of investment and indexation benefit MAT credit Total Nil Nil Nil Nil Nil Nil 306.94 149.19 456.13 Nil Nil Nil C crore Closing balance 306.94 149.19 456.13 36. Micro and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the information available with the Company and the required disclosures are given below: (a) Principal amount remaining unpaid (b) Interest due thereon@ (c) The amount of Interest paid along with the amounts of the payment made to the supplier beyond the appointed day@ (d) The amount of Interest due and payable for the year@ (e) The amount of Interest accrued and remaining unpaid@ (f) The amount of further interest due and payable even in the succeeding years, until such date when the interest dues as above are actually paid@ C crore 31st March, 2020 K crore 7.72 Nil 31st March, 2019 K crore 3.96 Nil Nil Nil Nil Nil Nil Nil Nil Nil @ Amounts unpaid to Micro and Small Enterprises vendors on account of retention money have not been considered for the purpose of interest calculation. 37. Commitments (a) Estimated amount of Contracts remaining to be executed on capital account and not provided for. (b) Other Commitments (i) The Company has given an undertaking to the Bankers of Cennergi Pty. Ltd., wherein it would 31st March, 2020 K crore 413.08 31st March, 2019 K crore 511.07 ensure that Cennergi Pty. Ltd. would satisfy its commitment to the Bank. 0.05 0.05 (ii) In terms of the Sponsor Support agreement entered into between the Company, Coastal Gujarat Power Ltd. (CGPL) and INR term lenders (SBI led consortium) of CGPL, the Company has undertaken to provide support by way of base equity contribution to the extent of 25% of CGPL’s project cost and additional equity or subordinated loans to be made or arranged for, if required as per the financing agreements to finance the project. The Sponsor Support Agreement also includes support by way of additional financial support for any overrun in project costs, operational loss and Debt Service Reserve Guarantee as provided under the financing agreements. In terms of the conditions of the financing agreements, the Company has provided support through Unsecured Perpetual securities and Equity of ₹ 15,629.14 crore (31st March, 2019 - ₹ 15,579.14 crore) to CGPL. (iii) The Company has undertaken to arrange for the necessary financial support to its subsidiaries Bhira Investments Pte. Ltd., Khopoli Investments Ltd., Bhivpuri Investments Ltd., Industrial Power Utility Ltd., Tata Power Jamshedpur Distribution Ltd. and Tata Power International Pte. Ltd. (iv) (v) In respect of Maithon Power Ltd. (MPL), the Company jointly with Damodar Valley Corporation (DVC) has undertaken to the lenders of MPL, to provide support by way of base equity contribution and additional equity or subordinated loans to meet the increase in Project Cost. Further, the Company has given an undertaking to MPL to fulfil payment obligations of Tata Power Trading Company Ltd. (TPTCL) and Tata Power Delhi Distribution Ltd. (TPDDL) in case of their default. In terms of pre-implementation agreement entered into with Government of Himachal Pradesh and the consortium consisting of the Company and SN Power Holding Singapore Pte. Ltd. (Company being the Lead Member of the consortium) for the investigation and implementation of Dugar Hydro Electric Project, the Company has undertaken as Lead Member to undertake/perform various obligations pertaining to Dugar Project. 314 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 38. Contingent liabilities Contingent liabilities including: 31st March, 2020 K crore 31st March, 2019 K crore (a) Claims against the Company not probable and hence not acknowledged as debts consists of (i) Demand disputed by the Company relating to Service tax on transmission charges received for July 2012 to June 2017. (a) Disallowance of costs recoverable from consumers by Maharashtra Electricity (ii) Regulatory Commission in the tariff true up order. (b) Disallowance of carrying cost and other costs by Appellate Tribunal for Electricity (ATE). The Company has filed Special Leave Petition (SLP) with the Supreme Court. (iii) Way Leave fees (including interest) claims disputed by the Company relating to rates charged. (iv) Interest and Penalty pertaining to Custom duty claims disputed by the Company relating to applicability and classification of coal. (v) Access Charges demand for laying underground cables. (vi) Rates, Cess, Excise and Custom Duty claims disputed by the Company. (vii) Compensation disputed by private land owners on private land acquired under the provisions of Maharashtra Industrial Development Act, 1961. (viii) Octroi claims disputed by the Company in respect of octroi exemption claimed by the Company. (ix) Other claims against the Company not acknowledged as debts. (x) Demand towards charges for unscheduled interchange (UI) of power [Refer Note (d) below] 375.29 359.85 269.00 43.18 34.49 30.14 26.63 22.00 5.03 34.51 Nil 375.29 261.00 269.00 39.18 34.49 Nil 24.97 22.00 5.03 33.59 215.02 Notes: 1. Amounts in respect of employee related claims/disputes, regulatory matters is not ascertainable. 2. Future cash flows in respect of above matters are determinable only on receipt of judgements/decisions pending at various forums/authorities. 3. The above Contingent Liabilities include those pertaining to Regulated Business which on unfavourable outcome can be recovered from consumers. 1,200.12 1,279.57 (b) Other Contingent Liabilities: Taxation matters for which liability is disputed by the Company and not provided for (computed on the basis of assessments which have been re-opened / remaining to be completed) including interest demanded ₹ Nil (31st March, 2019 - ₹ Nil). 31st March, 2020 K crore 31st March, 2019 K crore 50.93 456.61 31st March, 2020 K crore* 31st March, 2019 K crore (c) Indirect exposures of the Company: Guarantees given: (i) Coastal Gujarat Power Ltd. (ii) Khopoli Investments Ltd. (iii) Bhira Investments Pte. Ltd. (iv) Trust Energy Resources Pte. Ltd. (v) Energy Eastern Pte. Ltd. 7,544.17 1,676.21 7,836.54 1,683.52 (equivalent to USD 221.89 million) 1,462.64 (equivalent to USD 193.62 million) 348.31 (equivalent to USD 46.11 million) Nil (equivalent to USD Nil) (equivalent to USD 243.42 million) 1,502.18 (equivalent to USD 217.20 million) 624.53 (equivalent to USD 90.30 million) 408.05 (equivalent to USD 59.00 million) 315 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 38. Contingent liabilities (Contd.) (vi) Tata Power Renewable Energy Ltd. (vii) Tata Power Solar Systems Ltd. (viii) Chirasthaayee Saurya Ltd. (ix) Walwhan Renewable Energy Ltd. (x) Walwhan Solar TN Ltd. (xi) Walwhan Wind RJ Ltd. 31st March, 2020 K crore* 1,612.53 Nil 272.12 1,450.51 126.56 86.03 31st March, 2019 K crore 2,075.00 295.92 272.11 1,464.99 Nil Nil * The exposure is considered to the extent of borrowings outstanding (including accrued interest) in the financial statements of the respective subsidiaries. (d) In the previous year, Maharashtra State Electricity Distribution Company Limited (MSEDCL) had raised a demand of ₹ 215.02 crore for determination of fixed charges for unscheduled interchange of power. The Company had filed a petition against the said demand. During the year, MERC has turned down methodology adopted by MSEDCL for determination of such charges and ordered MSEDCL to submit certain details to Maharashtra State Load Dispatch Centre (MSLDC) to determine the revised charges based on principles suggested in the Order. Considering the same, currently, the amount of charges payable is not ascertainable and hence, no provision has been recognized during the year. Further, in case of unfavourable outcome, the Company believes that it will be allowed to recover the same from consumers through future adjustment in tariff. (e) The proposed Social Security Code, 2019, when promulgated, would subsume labour laws including Employees' Provident Funds and Miscellaneous Provisions Act and amend the definition of wages on which the organisation and its employees are to contribute towards Provident Fund. The Company believes that there will be no significant impact on its contributions to Provident Fund due to the proposed amendments. There were many interpretative issues relating to the Supreme Court (SC) judgement dated 28th February, 2019 on Provident Fund (PF) as regards definition of PF wages and inclusion of certain allowances for the purpose of PF contribution, as well as effective date of its applicability. Having consulted and evaluated impact on its financial statement, the company has implemented the changes as per clarifications vide the Apex Court judgement dated 28th February, 2019, with effect from 1st March 2019 i.e., immediate after pronouncement of the judgement, as part of statutory compliance. The company will evaluate its position and act, in case there is any other interpretation of the same issued in future either in form of Social Security Code or by authorities concerned under the Employees' Provident Funds and Miscellaneous Provisions Act. The Company, in respect of the above mentioned Contingent Liabilities has assessed that it is only possible but not probable that outflow of economic resources will be required. 39. Other settlement a. With respect to Standby litigation with Adani Electricity Mumbai Limited (Adani Electricity), the Hon'ble Supreme Court during the year ended 31st March, 2020 has upheld Appellate Tribunal for Electricity (APTEL) order dated 20th December, 2006 directing the Company to pay ₹ 354.00 crore along with the interest at 10% p.a. from 1st April, 2004 till the date of payment. In the past, in accordance with the Hon'ble Supreme Court directives the Company has deposited ₹ 227.00 crore with the Registrar General of the Court which was withdrawn by Adani Electricity on furnishing the required undertaking to the Court. Consequently, the Company has recognized an expense of ₹ 276.35 crore net of amount recoverable from customers including adjustment with consumer reserves. b. In the earlier years, the Company had received demands in respect of entry tax on imports of fuel for Trombay plant. During the year ended 31st March, 2019, the Company has recognised provision of ₹ 345.00 crore (including interest and provision for contingency of ₹ 78.00 crore and ₹ 45.00 crore respectively) towards settlement of entry tax demands under the Amnesty scheme notified by the Government of Maharastra. Further during the year ended 31st March, 2020, the Company has received final settlement order under the said scheme and pursuant to the said order, the Company has reversed the excess provision related to entry tax under the head ‘Cost of Fuel’ and corresponding recovery from customers under the head ‘Revenue from Operations' amounting to ₹ 68.78 crore. 316 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 40. Earnings Per Share Accounting Policy Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the Standalone Ind AS financial statements by the Board of Directors. Particulars A. EPS - Continuing operations (before net movement in Regulatory Deferral Balances) Net Profit/ (Loss) from Continuing Operations (Refer Note 3.11.2) Net movement in Regulatory Deferral Balances (Refer Note 3.11.3) Remeasurement of Deferred Tax Recoverable on account of New Tax Regime (Net) [Refer Note 35(i)] Income-tax attributable to Regulatory Deferral Balances (Refer Note 3.11.3) Net movement in Regulatory Deferral Balances (Net of tax) Net Profit/ (Loss) (before net movement in Regulatory Deferral Balances) Less: Distribution on Perpetual Securities (Refer Note 3.11.2) A B C D E=(B+C+D) F=(A-E) G For the year ended 31st March, 2020 K crore* For the year ended 31st March, 2019 K crore* 558.35 (651.40) (98.00) 261.87 (487.53) 1,045.88 (171.00) 1,894.54 (146.58) Nil 51.22 (95.36) 1,989.90 (171.00) Profit/ (Loss) from Continuing Operations attributable to equity shareholders (before net movement in Regulatory Deferral Balances) H=(F+G) 874.88 1,818.90 Weighted average number of equity shares for Basic and Diluted EPS 270,76,05,570 270,76,05,570 EPS - Continuing Operations (before net movement in Regulatory Deferral Balances) - Basic and Diluted (In ₹) 3.23 6.72 B. EPS - Continuing Operations (after net movement in Regulatory Deferral Balances) Net Profit/ (Loss) from Continuing Operations (Refer Note 3.11.2) Less: Distribution on Perpetual Securities (Refer Note 3.11.2) Profit/ (Loss) attributable to equity shareholders (after net movement in Regulatory Deferral Balances) Weighted average number of equity shares for Basic and Diluted EPS EPS - Continuing operations (after net movement in Regulatory Deferral Balances) - Basic and Diluted (In ₹) C. EPS - Discontinued operations Net Profit/ (Loss) from Discontinued Operations Weighted average number of equity shares for Basic and Diluted EPS EPS - Discontinued Operations - Basic and Diluted (In ₹) 558.35 (171.00) 1,894.54 (171.00) 387.35 1,723.54 270,76,05,570 270,76,05,570 1.44 6.36 (410.23) 270,76,05,570 (125.84) 270,76,05,570 (1.52) (0.46) 317 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 40. Earnings Per Share (Contd.) Particulars D. EPS - Total Operations (after net movement in Regulatory Deferral Balances) Net (Loss) / Profit from Total Operations (after net movement in Regulatory Deferral Balances) (Refer Note 3.11.2) Less: Distribution on Perpetual Securities (Refer Note 3.11.2) Net Profit/ (Loss) from Total Operations attributable to equity shareholders (after net movement in Regulatory Deferral Balances) Weighted average number of equity shares for Basic and Diluted EPS EPS - Total Operations (after net movement in Regulatory Deferral Balances) - Basic and Diluted (In ₹) For the year ended 31st March, 2020 K crore* For the year ended 31st March, 2019 K crore* 148.12 (171.00) 1,768.70 (171.00) (22.88) 270,76,05,570 1,597.70 270,76,05,570 (0.08) 5.90 * All numbers are in ₹ crore except weighted average number of equity shares and Basic and Diluted EPS 41. Related Party Disclosures Disclosure as required by Ind AS 24 - "Related Party Disclosures" is as follows: Names of the related parties and description of relationship: (a) Related parties where control exists: (i) Subsidiaries 1) Af-Taab Investment Company Ltd. 3) Tata Power Trading Company Ltd. 5) NELCO Ltd. 7) Maithon Power Ltd. 2) 4) 6) Tata Power Solar Systems Ltd. Tata Power Green Energy Ltd. Tatanet Services Ltd. ** 8) Coastal Gujarat Power Ltd. 9) Tata Power Renewable Energy Ltd. 10) TP Renewable Microgrid Ltd. (Formerly Industrial 11) Bhira Investments Pte. Ltd. (Formerly Bhira 12) Bhivpuri Investments Ltd. Power Utility Ltd.) Investments Ltd.) 13) Khopoli Investments Ltd. 14) Tata Power International Pte. Ltd. 15) Trust Energy Resources Pte. Ltd. 16) Energy Eastern Pte. Ltd.** (Merged with Trust Energy 17) NDPL Infra Ltd. ** Resources Pte. Ltd. w.e.f. 10th June, 2019) 18) Tata Power Jamshedpur Distribution Ltd. 19) PT Sumber Energi Andalan Tbk ** 20) Supa Windfarm Ltd. ** 21) TCL Ceramics Ltd. (Formerly Tata Ceramics Ltd.) 22) Nivade Windfarm Ltd. ** 23) Poolavadi Windfarm Ltd. ** 24) Walwhan Renewable Energy Ltd. ** 25) Indo Rama Renewables Jath Ltd. ** 26) Walwhan Solar AP Ltd. ** 27) Walwhan Urja Anjar Ltd. ** 29) Walwhan Solar Raj Ltd. ** 31) Walwhan Solar Energy GJ Ltd. ** 33) MI MySolar24 Pvt. Ltd. ** 35) Walwhan Solar MP Ltd. ** 37) Walwhan Solar KA Ltd. ** 39) Walwhan Solar RJ Ltd. ** 41) Walwhan Solar TN Ltd. ** 318 28) Northwest Energy Pvt. Ltd. ** 30) Dreisatz MySolar24 Pvt. Ltd. ** 32) Walwhan Energy RJ Ltd. ** 34) Walwhan Solar MH Ltd. ** 36) Walwhan Solar PB Ltd. ** 38) Walwhan Wind RJ Ltd. ** 40) Walwhan Solar BH Ltd. ** 42) Walwhan Urja India Ltd. ** The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 41. Related Party Disclosures (Contd.) 43) Clean Sustainable Solar Energy Pvt. Ltd. ** 44) Chirasthaayee Saurya Ltd. ** 45) Solarsys Renewable Energy Pvt. Ltd. ** 46) Vagarai Windfarm Ltd. ** 47) Nelco Network Products Ltd. ** 49) TP Ajmer Distribution Ltd. 51) TP Solapur Ltd.** ** Through Subsidiary Companies (ii) Employment Benefit Funds 48) Far Eastern Natural Resources LLC ** 50) Tata Power Delhi Distribution Ltd. 52) TP Kirnali Ltd.** 1) 3) Tata Power Superannuation Fund 2) Tata Power Gratuity Fund Tata Power Consolidated Provident Fund (b) Other related parties (where transactions have taken place during the year or previous year / balances outstanding) : (i) Associates 1) 3) 5) Tata Projects Ltd. 2) Yashmun Engineers Ltd. The Associated Building Co. Ltd. 4) Dagachhu Hydro Power Corporation Ltd. Tata Communication Ltd. (ceased to be an Associate w.e.f. 28th May, 2018) 6) Panatone Finvest Ltd. (ceased to be an Associate w.e.f. 28th May, 2018) 7) Nelito Systems Ltd (ceased to be an Associate w.e.f. 6th June, 2019) (ii) Joint Venture Companies 1) 3) 5) Tubed Coal Mines Ltd. Powerlinks Transmission Ltd. PT Baramulti Sukessarana Tbk** 7) Adjaristsqali Netherlands BV** 9) LTH Milcom Pvt. Ltd. 11) Renascent Power Ventures Pvt. Ltd. ** 2) Mandakini Coal Company Ltd. 4) 6) 8) Itezhi Tezhi Power Corporation PT Antang Gunung Meratus** PT Kaltim Prima Coal** 10) Industrial Energy Ltd. 12) Dugar Hydro Power Ltd. 13) Prayagraj Power Generation Co. Ltd. ** (w.e.f. 12th 14) Cennergi Pty. Ltd. ** (ceased to be JV w.e.f. December, 2019) 15) Adjaristsqali Georgia LLC ** ** Joint Venture of Subsidiaries 31st March, 2020) (c) (i) Promoters holding more than 20% - 'Promoter' 1) Tata Sons Pvt. Ltd. (ii) Subsidiaries and Jointly Controlled Entities of Promoter - Promoter Group (where transactions have taken place during the year or previous year / balances outstanding) : Ewart Investments Ltd. Tata Industries Ltd. (ceased to be Subsidiary and became a Joint Venture w.e.f. 27th March, 2019) Tata Investment Corporation Ltd. Tata Consultancy Services Ltd. Tata Realty And Infrastructure Ltd. 1) 3) 5) 7) 9) 11) Infiniti Retail Ltd. 2) 4) 6) 8) Tata AIG General Insurance Company Ltd. Tata Communications Ltd. (ceased to be an Associate and became a Subsidiary w.e.f. 28th May, 2018) Tata International Ltd. Tata Ltd. 10) Tata Sky Ltd. 12) Ecofirst Services Ltd. 319 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 41. Related Party Disclosures (Contd.) 13) Tata Consulting Engineers Ltd. 15) Niskalp Infrastructure Services Ltd. (Formerly Niskalp Energy Ltd.) 17) Tata Housing Development Company Ltd. 19) Tata Capital Financial Services Ltd. 21) Tata Teleservices (Maharashtra) Ltd. 23) Taj Air Ltd. 25) Progressive Electoral Trust 27) Tata Interactive Systems 29) THDC Management Services Ltd. (Formerly THDC Facility Management Ltd.) 31) Tata Advanced Materials Ltd. (ceased to be Subsidiary w.e.f. 27th March, 2019) 14) Tata Housing Development Co. Ltd. Employees Provident Fund 16) Tata Consultancy Services Employees Provident Fund 18) Tata Projects Provident Fund Trust 20) Tata AIA Life Insurance Company Ltd. 22) Tata AG, Zug (ceased to be Subsidiary w.e.f. 21st February, 2020) 24) Tata Teleservices Ltd. 26) Tata Advanced System Ltd. 28) Panatone Finvest Ltd. 30) Tata Communications Payment Solutions Ltd. (w.e.f. 28th May, 2018) 32) Tata Unistore Ltd. (Formerly Tata Industrial Services Ltd.) (ceased to be a Subsidiary w.e.f. 27th March, 2019) (d) Key Management Personnel 1) N. Chandrasekaran 2) Banmali Agrawala Kesava Menon Chandrasekhar 3) 5) 7) Vibha U. Padalkar 9) 11) Ramesh N. Subramanyam - Chief Financial Officer 13) Deepak M. Satwalekar (ceased to be Director w.e.f. Sanjay V. Bhandarkar Praveer Sinha CEO and Managing Director (w.e.f. 1st May, 2018) Saurabh Agrawal 4) 6) Ashok Sinha (w.e.f. 2nd May, 2019) 8) Anjali Bansal 10) Hemant Bhargava 12) Hanoz Minoo Mistry - Company Secretary 14) Nawshir H. Mirza (ceased to be Director w.e.f. 12th August, 2019) 12th August, 2019) 15) Ashok Sethi (ceased to be COO and Executive Director 16) Anil Sardana - CEO and Managing Director w.e.f. 30th April, 2019) (ceased to be Director w.e.f. 30th April, 2018) (e) Relative of Key Managerial Personnel (where transactions have taken place during the year or previous year / balances outstanding) : 1) Neville Minoo Mistry (Brother of Hanoz Minoo Mistry - Company Secretary) (f) Details of Transactions: Sr. No. Particulars Subsidiaries Associates Joint Ventures Key Management Personnel & their relatives Employee Benefit Funds / Trust Promoter Group 1) Purchase of goods/power (Net of Discount Received on Prompt Payment) 2) Sale of goods/power (Net of Discount on Prompt Payment) 3) Purchase of fixed assets 4) Sale of fixed assets 5) Rendering of services 62.39 62.80 221.60 256.84 1.20 0.06 - 0.09 102.33 107.57 - - 0.01 0.15 12.84 9.69 0.05 0.08 7.17 0.16 - 58.74 - - - - - - 39.76 18.09 - - - - - - - - - - - - - - - - - - - - - 0.02 33.70 69.68 0.22 3.01 - - 8.58 10.15 K crore Promoter - - - - - - 0.07 - 1.25 0.98 320 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 41. Related Party Disclosures (Contd.) Sr. No. Particulars 6) Receiving of services 7) Brand equity contribution 8) Contribution to Employee Benefit Plans 9) Guarantee, collaterals etc. given 10) Guarantee, collaterals etc. cancelled 11) Remuneration paid - short term employee benefits 12) Long term employee benefits paid 13) Short term employee benefits paid 14) Interest income 15) Interest paid (including distribution on unsecured perpetual securities) 16) Dividend income 17) Dividend paid 18) Guarantee commission earned 19) Loan Taken 20) Loans given 21) Reversal of Impairment of Investments and related obligation 22) Equity contribution (includes advance towards equity contribution and perpetual bonds) K crore Promoter Subsidiaries Associates Joint Ventures Key Management Personnel & their relatives Employee Benefit Funds / Trust Promoter Group 4.03 6.98 - - - - 5,743.33 $ 7,616.96 $ 7,717.53 $ 6,029.09 $ - - - - - - 18.57 44.39 4.91 3.98 267.18 283.40 - - 60.63 19.77 5,400.65 564.10 3,244.98 2,358.66 131.46 - 50.00 3,435.98 13.55 10.85 - - 0.80 0.08 - - - - - - - - - - - - - - - - - - 9.68 9.68 - - - - - - - 1.00 - - - - - - - - - - - - - - - - 0.01 0.64 - - 85.09 85.40 - - - 1.18 - - 14.57 1.00 - - - - 0.01 - - - - - - - - - 10.58 * 23.91 * 2.80 1.15 0.68 0.55 - - - - - - - - - - - - - - - - - - - - - - 27.02 27.07 - - 0.42 0.08 0.87 - 34.04 41.14 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 0.01 0.01 26.52 26.70 0.09 - # 1.77 1.77 - - - - - - - - - - - - - - - - - - - - - - - - - - 6.67 5.34 109.17 109.17 - - - - - - - - - - 321 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 41. Related Party Disclosures (Contd.) Sr. No. Particulars Subsidiaries Associates Joint Ventures Key Management Personnel & their relatives Employee Benefit Funds / Trust Promoter Group 23) Loans provided for as doubtful advances (including interest) 24) Loans given written off 25) Loans taken repaid (including loan converted into equity) 26) Loans repaid (including loan converted into equity) 27) Deposits taken 28) Deposits refunded 29) Liability written back 30) Sale of Investments 31) Donation given Balances outstanding 1) Unsecured Perpetual Securities 2) Redeemable Non-Convertible Debentures 3) Investments 4) Impairment in value of investments 5) Other receivables 6) 7) 8) Loans given (including interest thereon) Loans taken (including interest thereon) Loans provided for as doubtful advances (including interest thereon) 9) Deposits taken outstanding 10) Dividend receivable 6.85 11.16 5.69 - 5,295.58 689.10 2,809.63 2,633.96 - - - - 103.54 - - - - - - - - - 23,802.81 23,752.81 4,009.14 4,140.60 27.21 46.88 561.70 130.70 105.52 0.38 12.00 12.40 - - - 64.45 - - - - - - - 1.00 - 0.01 - - - - - - - - - - - - 0.14 - - - - - 14.43 1.00 - - - - - - - - - - - - - - 192.58 1,100.19 @ 192.58 @ 1,100.19 @ - - 4.17 1.26 1.27 1.27 - - 1.27 1.27 - - - - 67.50 67.50 32.91 @ 9.23 72.98 @ 72.84 @ - - 54.39 54.25 - - - 16.71 - - - - - - - - - - - - - 2.03 - - - - - - - - - - - - - - - - - - - - - - - - 322 K crore Promoter - - - - - - - - - - - - - 0.64 - 1,542.61 - - - - - - - - - - - - 0.19 0.21 - 1.51 - - - 614.18 - 20.00 198.20 199.00 - - - - - - - - - - - - - - - - - - - - - - - - 36.50 36.50 129.39 @ 145.24 - - 241.95 241.95 - - 35.45 20.46 - - - - - - - - - - - - 4.59 5.04 - - - - - - 0.21 0.02 - - - - 1.73 0.08 - - - - - 2.00 2.00 - - The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 41. Related Party Disclosures (Contd.) Sr. No. Particulars Subsidiaries Associates Joint Ventures Key Management Personnel & their relatives Employee Benefit Funds / Trust Promoter Group K crore Promoter 11) Guarantees, collaterals etc. outstanding 12) Letter of comfort outstanding 13) Other payables Notes: 14,658.57 16,322.85 - - 9.95 22.37 - - - - 4.24 7.58 - - 0.05 0.05 0.27 60.81 - - - - 8.04 12.93 - - - - 43.63 13.56 - - - - 3.66 0.51 - - - - 0.04 19.20 The Company's principal related parties consist of Tata Sons Private Limited, its subsidiaries and joint ventures, its own subsidiaries, affiliates and key managerial personnel. The Company's material related party transactions and outstanding balances are with related parties with whom the Company routinely enter into transactions in the ordinary course of business. Includes guarantees given and cancelled in foreign currency, converted in Indian currency by applying average exchange rates. All outstanding balances are unsecured. $ * Key Managerial Personnel are entitled to post-employment benefits and other long term employee benefits recognised as per Ind AS 19 - ‘Employee Benefits’ in the Standalone Ind AS financial statements. As these employee benefits are lump sum amounts provided on the basis of actuarial valuation, the same is not included above. # Denotes below ₹ 50,000. @ Includes amount reclassified as held for sale. 42. Financial Instruments 42.1 Fair values Set out below, is a comparison by class of the carrying amount and fair value of the financial instruments: Financial assets # Cash and Cash Equivalents Other Balances with banks Trade Receivables Unbilled Revenues Loans Finance Lease Receivables FVTPL Financial Investments FVTOCI Financial Investments (Refer Note below) Amortised Cost financial investments Other Financial Assets Asset Classified as Held For Sale (Refer Note 18) - Strategic Engineering Division (SED) - FVTOCI Financial Investments (Refer Note below) - Loans and other receivables (including accrued interest) Total Financial liabilities Trade Payables Floating rate borrowings (including current maturities) Fixed rate borrowings (including current maturities) Other financial liabilities Carrying value Fair Value 31st March, 2020 31st March, 2019 31st March, 2020 31st March, 2019 K crore 158.54 20.40 1,108.68 83.41 592.19 584.92 20.00 416.14 171.38 454.84 75.94 19.85 1,442.20 41.56 170.55 591.85 Nil 419.65 416.40 98.95 158.54 20.40 1,108.68 83.41 592.19 584.92 20.00 416.14 176.79 454.84 75.94 19.85 1,442.20 41.56 170.55 591.85 Nil 419.65 423.27 98.95 667.35 22.81 22.74 4,323.40 265.62 38.65 18.59 3,599.81 667.35 22.81 22.74 4,328.81 265.62 38.65 18.59 3,606.68 1,001.87 6,579.58 11,386.65 707.64 19,675.74 1,124.89 7,752.86 9,699.66 967.19 19,544.60 1,001.87 6,579.58 11,397.63 707.64 19,686.72 1,124.89 7,752.86 9,774.02 967.19 19,618.96 # Other than investments in subsidiaries, associates and joint ventures accounted at cost in accordance with Ind AS 27 'Separate Financial Statements'. 323 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 42. Financial Instruments (Contd.) Note: Certain unquoted investments are not held for trading, instead they are held for medium or long term strategic purpose. Upon the application of Ind AS 109 'Financial Instruments', the Company has chosen to designate these investments in equity instruments as at FVTOCI as the management believe this provides more meaningful presentation for medium and long term strategic investments, then reflecting changes in fair value immediately in profit or loss. The management assessed that the fair value of cash and cash equivalents, other balances with banks, trade receivables, loans, finance lease receivables, unbilled revenues, trade payables, other financial assets and liabilities approximate their carrying amounts largely due to the short term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties. The following methods and assumptions were used to estimate the fair values. - Fair value of the government securities are based on the price quotations near the reporting date. Fair value of the unquoted equity shares have been estimated using market comparable method. The valuation requires management to make certain assumptions about the marketability, active market price, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in management's estimate of fair value for those unquoted equity investments. - The fair value of the remaining FVTOCI financial assets are derived from quoted market price in active markets. - The fair value of debentures is determined by using the quoted prices. The own non-performance risk as on 31st March, 2020 was assessed to be insignificant. - The cost of certain unquoted investments approximate their fair value because there is a wide range of possible fair value measurements and the cost represents the best estimate of fair value within that range. - The fair value of loans from banks, other current financial liabilities and other non-current financial liabilities is estimated by discounting future cash flow using rates currently available for debt on similar terms, credit risk and remaining maturities. Reconciliation of Level 3 fair value measurement of unquoted equity shares classified as FVTOCI: Unlisted shares irrevocably designated as at FVTOCI (Refer Note below) Opening balance Gain/(Loss) - in other comprehensive income - in profit or loss - changes on sale of equity shares Closing balance Note: For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 404.87 404.87 Nil Nil Nil 404.87 Nil Nil Nil 404.87 All gains and losses included in other comprehensive income related to unlisted shares held at the end of the reporting period and are reported under "Equity Instruments through Other Comprehensive Income". The significant unobservable input used in the fair value measurement categorized within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at 31st March, 2020 and 31st March, 2019 are as shown below: Description of significant unobservable inputs to valuation: Investments in unquoted equity shares Valuation techniques Price of recent transaction (PORT) Significant unobservable inputs Transaction price Range (weighted average) Varies on case to case basis Sensitivity of the input to fair value 5% (31st March, 2019: 5%) increase (decrease) in the transaction price would result in increase (decrease) in fair value by ₹ 2.82 crore (31st March, 2019: ₹ 2.82 crore) 42.2 Fair value hierarchy The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels: Quoted prices in an active market (Level 1): Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. This includes quoted equity instruments, government securities and quoted borrowings (fixed rate) that have quoted price. 324 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 42. Financial Instruments (Contd.) Valuation techniques with observable inputs (Level 2): Inputs are 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). This includes derivative financial instruments and unquoted floating and fixed rate borrowings. Valuation techniques with significant unobservable inputs (Level 3): Inputs are not based on observable market data (unobservable inputs). Fair values are 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 includes unquoted equity shares. The following table summarizes financial assets and liabilities measured at fair value on a recurring basis and financial assets that are not measured at fair value on a recurring basis (but fair value disclosures are required) : Asset measured at fair value FVTPL Financial Investments FVTOCI Financial Investments: - Quoted equity shares - Unquoted equity shares - Assets classified as held for sale Asset for which fair values are disclosed Amortised cost Financial Investments: - Government securities Liabilities for which fair values are disclosed Fixed rate borrowings Floating rate borrowings Total Asset measured at fair value FVTOCI financial investments: - Quoted equity shares - Unquoted equity shares - Assets Classified as Held For Sale Asset for which fair values are disclosed Amortised Cost financial investments: - Government securities Date of valuation Fair value hierarchy as at 31st March, 2020 Quoted prices in active markets (Level 1) K crore Significant observable inputs (Level 2) K crore Significant unobservable inputs (Level 3) K crore Total K crore 31st March, 2020 31st March, 2020 31st March, 2020 31st March, 2020 20.00 11.27 Nil 22.81 Nil Nil Nil Nil Nil 20.00 Nil 404.87 Nil 11.27 404.87 22.81 31st March, 2020 176.79 230.87 Nil Nil Nil 404.87 176.79 635.74 Date of valuation Fair value hierarchy as at 31st March, 2020 Quoted prices in active markets (Level 1) K crore Significant observable inputs (Level 2) K crore Significant unobservable inputs (Level 3) K crore Total K crore 31st March, 2020 31st March, 2020 5,337.13 Nil 5,337.13 6,060.50 6,579.58 12,640.08 Nil Nil Nil 11,397.63 6,579.58 17,977.21 Date of valuation Fair value hierarchy as at 31st March, 2019 Quoted prices in active markets (Level 1) K crore Significant observable inputs (Level 2) K crore Significant unobservable inputs (Level 3) K crore Total K crore 31st March, 2019 31st March, 2019 31st March, 2019 14.78 Nil 38.65 31st March, 2019 423.27 476.70 Nil Nil Nil Nil Nil Nil 404.87 Nil 14.78 404.87 38.65 Nil 423.27 404.87 881.57 325 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 42. Financial Instruments (Contd.) Date of valuation Fair value hierarchy as at 31st March, 2019 Quoted prices in active markets (Level 1) K crore Significant observable inputs (Level 2) K crore Significant unobservable inputs (Level 3) K crore Total K crore Liabilities for which fair values are disclosed Fixed rate borrowings Floating rate borrowings Total 31st March, 2019 31st March, 2019 4,044.41 Nil 4,044.41 5,729.61 7,752.86 13,482.47 Nil Nil Nil 9,774.02 7,752.86 17,526.88 There has been no transfer between level 1 and level 2 during the period. 42.3 Capital Management & Gearing Ratio For the purpose of the Company's capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company's capital management is to maximize the value for shareholders. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. From time to time, the Company reviews its policy related to dividend payment to shareholders, return capital to shareholders or fresh issue of shares. The Company monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. The Company’s policy is to keep the gearing ratio around 50%. The Company includes within net debt, interest bearing loans and borrowings, less cash and bank balances, excluding discontinued operations as detailed in the notes below. The Company's capital management is intended to create value for shareholders by facilitating the meeting of its long-term and short-term goals. Its Capital structure consists of net debt (borrowings as detailed in notes below) and total equity. Gearing ratio The gearing ratio at the end of the reporting period was as follows: Debt (i) Less: Cash and Bank balances Net debt Total Capital (ii) Capital and net debt Net debt to Total Capital plus net debt ratio (%) As at 31st March, 2020 18,003.89 160.54 17,843.35 15,261.97 33,105.32 53.90 K crore As at 31st March, 2019 17,641.99 77.94 17,564.05 15,689.60 33,253.65 52.82 (i) Debt is defined as Non-current borrowings (including current maturities) and Current borrowings (excluding derivative, financial guarantee contracts and contingent considerations) and interest accrued on Non-current and Current borrowings. (ii) Equity is defined as Equity share capital, Unsecured perpetual securities and other equity. In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no significant breaches in the financial covenants of any interest-bearing loans and borrowing in the current year. No changes were made in the objectives, policies or processes for managing capital during the years ended 31st March, 2020 and 31st March, 2019. 326 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 42. Financial Instruments (Contd.) 42.4 Financial risk management objectives and policies The Company’s principal financial liabilities, other than derivatives, comprise borrowings, trade and other payables, financial guarantee contracts and other financial liabilities. The main purpose of these financial liabilities is to finance the Company’s operations and to provide guarantees to support its operations. The Company’s principal financial assets include investments, loans, trade and other receivables, cash and cash equivalents, other bank balances, unbilled receivables, finance lease receivables and other financial assets that derive directly from its operations. The Company also holds FVTOCI/ FVTPL investments and enters into derivative transactions. The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management is supported by a risk committee that reviews the financial risks and the appropriate financial risk governance framework for the Company. The Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The risk management polices is approved by the board of directors. 42.4.1 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 of three types of risk: currency risk, interest rate risk and equity price risk. The impact of equity price risk is not significant. Financial instruments affected by market risk include loans and borrowings, derivative financial instruments and FVTOCI investments. The sensitivity analysis in the following sections relate to the position as at 31st March, 2020 and 31st March, 2019. The sensitivity analysis has been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant. The analysis excludes the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets. a. Foreign currency risk management Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company is exposed to foreign exchange risk through its operations in international projects and purchase of coal from Indonesia. The results of the Company's operations can be affected as the rupee appreciates/depreciates against these currencies. The following table analyses foreign currency assets and liabilities on balance sheet dates: Foreign Currency Liabilities In USD In EURO In GBP In JPY In AUD In CAD In VND Foreign Currency Assets In USD In ZAR In SGD In VND In TAKA * Denotes figures below ₹ 50,000 31st March, 2020 31st March, 2019 Foreign Currency (In Millions) 20.50 0.31 Nil 300.78 Nil 0.02 790.21 K crore Foreign Currency (In Millions) 32.13 0.07 * 124.51 0.01 0.01 Nil 154.88 2.60 Nil 20.92 Nil 0.08 0.25 31st March, 2020 31st March, 2019 Foreign Currency (In Millions) 6.42 0.03 0.08 35.88 0.21 K crore Foreign Currency (In Millions) 7.66 0.01 Nil Nil 0.20 48.53 0.01 0.41 0.01 0.02 K crore 222.21 0.54 0.03 7.78 0.05 0.05 Nil K crore 52.98 0.01 Nil Nil 0.02 327 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 42. Financial Instruments (Contd.) (i) Foreign currency sensitivity analysis The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange rates, with all other variables held constant. The impact on the Company’s equity is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency forward and option contracts given as under. K crore Effect on profit before tax and consequential impact on equity As of 31st March, 2020 As of 31st March, 2019 Rupee depreciate by ₹ 1 against USD Rupee appreciate by ₹ 1 against USD Rupee depreciate by ₹ 1 against USD Rupee appreciate by ₹ 1 against USD (-) ₹ 1.41 (+) ₹ 1.41 (-) ₹ 2.45 (+) ₹ 2.45 Notes: 1. +/- Gain/Loss 2. The impact of depreciation/appreciation on foreign currency other than USD on profit before tax of the Company is not significant. b. Interest rate risk management 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 balanced portfolio of fixed and variable rate borrowings. The Company’s policy is to keep between 40% and 60% of its borrowings at fixed rates of interest. To manage this, the Company enters into fixed rate borrowings, in which it agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount. (i) Interest rate sensitivity: The sensitivity analysis below have been determined based on exposure to interest rates for term loans and debentures that have floating rate at the end of the reporting period and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period. If the interest rates had been 50 basis points higher or lower and all the other variables were held constant, the effect on Interest expense for the respective financial years and consequent effect on Company's profit in that financial year would have been as below: Interest Expense on Loans Effect on equity/profit before tax 42.4.2 Credit risk management 31st March, 2020 K crore 31st March, 2019 50 bps increase 50 bps decrease 50 bps increase 50 bps decrease (+) ₹ 37.54 (-) ₹ 37.54 (-) ₹ 37.54 (+) ₹ 37.54 (+) ₹ 39.45 (-) ₹ 39.45 (-) ₹ 39.45 (+) ₹ 39.45 Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities including loans and other financial instruments. Trade receivables Loans Finance lease receivables Other financial assets Unbilled Revenue Financial Assets Held for Sale Total 31st March, 2020 1,108.68 592.19 584.92 458.35 83.41 712.90 3,540.45 K crore 31st March, 2019 1,442.20 170.55 591.85 98.95 41.56 322.86 2,667.97 Refer Note 8 for credit risk and other information in respect of trade receivables. Other receivables as stated above are due from the parties under normal course of the business and as such the Company believes exposure to credit risk to be minimal. The Company has not acquired any credit impaired asset. 328 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 42. Financial Instruments (Contd.) 42.4.3 Liquidity risk management The current liabilities of the Company exceeds the current assets. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Company has access to a sufficient variety of sources of funding. Having regards to the nature of the business wherein the Company is able to generate fixed cash flows over a period of time and to optimize the cost of funding, the Company, from time to time, funds its long -term investment from short-term sources. The short-term borrowings can be rollforward or, if required, can be refinanced from long term borrowings. Hence, the Company considers the liquidity risk as low. The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments. 31st March, 2020 Non-Derivatives Borrowings # Trade Payables Lease Liabilities Other Financial Liabilities Total Non-Derivative Liabilities 31st March, 2019 Non-Derivatives Borrowings # Trade Payables Other Financial Liabilities Total Non-Derivative Liabilities Up to 1 year 1 to 5 years 5+ years Total 9,323.93 1,001.87 61.26 655.37 11,042.43 9,118.34 Nil 143.49 14.60 9,276.43 11,479.38 Nil 333.45 Nil 11,812.83 29,921.65 1,001.87 538.20 669.97 32,131.69 K crore Carrying Amount 18,003.89 1,001.87 278.85 669.97 19,954.58 9,870.39 1,102.14 734.96 11,707.49 7,496.93 22.75 42.76 7,562.44 12,091.06 Nil Nil 12,091.06 29,458.38 1,124.89 777.72 31,360.99 17,641.99 1,124.89 777.72 19,544.60 # The table has been drawn up based on the undiscounted contractual maturities of the financial liabilities including interest that will be paid on those liabilities upto the maturity of the instruments, ignoring the call and refinancing options available with the Company. The amounts included above for variable interest rate instruments for non- derivative liabilities is subject to change if changes in variable interest rates differ to those estimates of interest rates determined at the end of the reporting period. The amount included in Note 38(c) for financial guarantee contracts are the maximum amounts the Company could be forced to settle under respective arrangements for the full guaranteed amount if that amount is claimed by the counterparty to the guarantee. Based on expectations at the end of the reporting period, the Company considers that it is more likely than not that such amount will not be payable under the arrangement. However, this estimate is subject to change depending on the probability of the counterparty claiming under the guarantee which is a function of the likelihood that the financial receivables held by the counterparty which are guaranteed suffer credit losses. 43. Segment Reporting From the current year, the Company has changed its organization structure into various operating verticals for efficient monitoring and pursuing growth. Consequently, reporting to Chief Operating Decision Maker (CODM) has been changed which has resulted into change in the composition of reportable segments. Accordingly, corresponding information for comparative year has been restated in the segment reporting. Information reported to the CODM for the purpose of resource allocation and assessment of segment performance focuses on business segment which comprises of Generation, Renewables, Transmission and Distribution and Others. Specifically, the Company's reportable segments under Ind AS are as follows: Generation: Comprises of generation of power from hydroelectric sources and thermal sources (coal, gas and oil) from plants owned and operated under lease arrangement and related ancillary services. 329 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 43. Segment Reporting (Contd.) Renewables: Comprises of generation of power from renewable energy sources i.e. wind and solar and related ancillary services Transmission and Distribution: Comprises of transmission and distribution network, sale of power to retail customers through distribution network and related ancillary services. Others: Comprises of project management contracts/infrastructure management services, property development and lease rent of oil tanks. Revenue and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reporting segment have been allocated on the basis of associated revenue/assets of the segment and manpower efforts. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. (a) Segment Information: Particulars Segment Revenue (Refer Note 3.11.3 and 30) Generation Renewables Transmission and Distribution Others (Less): Inter Segment Revenue - Generation (Less): Inter Segment Revenue - Renewables Total Segment Revenue Discontinued Operations- Others # Revenue / Income from Operations (including Net Movement in Regulatory Deferral Balances) Segment Results Generation Renewables Transmission and Distribution Others Total Segment Results (Less): Finance Costs Add/(Less): Exceptional Item - Generation [Refer Note 35(i) and 39a.] Add/(Less): Exceptional Item - Transmission and Distribution [Refer Note 35(i)] Add/(Less): Exceptional Item - Unallocable [Refer Note 7(10)(b)] Add/(Less): Unallocable Income/(Expense) (Net) Profit/(Loss) Before Tax from Continuing Operations Profit/(Loss) Before Tax from Discontinued Operations Impairment Loss on Remeasurement to Fair Value (Refer Note 18) Profit/(Loss) Before Tax from Discontinued Operations 330 Year ended 31st March, 2020 K crore Year ended 31st March, 2019 4,456.33 283.49 4,012.16 30.76 8,782.74 (1,589.26) (165.59) 7,027.89 343.74 7,371.63 739.16 102.43 825.29 7.78 1,674.66 (1,510.38) (351.35) (190.00) 235.00 492.60 350.53 (81.64) (361.00) (442.64) 5,263.76 271.40 4,320.33 34.83 9,890.32 (1,659.10) (166.62) 8,064.60 143.59 8,208.19 1,142.85 82.71 1,049.88 19.42 2,294.86 (1,500.35) (45.00) Nil 1,212.99 384.50 2,347.00 (191.82) Nil (191.82) The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements 43. Segment Reporting (Contd.) Particulars Segment Assets Generation Renewables Transmission and Distribution Others Unallocable* Assets classified as held for sale # (Refer Note 18) Total Assets Segment Liabilities Generation Renewables Transmission and Distribution Others Unallocable* Liabilities classified as held for sale # Total Liabilities Capital Expenditure Generation Renewables Transmission and Distribution Others Discontinued Operations Depreciation/Amortisation (to the extent allocable to the segment) Generation Renewables Transmission and Distribution Others Reconciliation of Revenue Particulars Revenue from Operations Add/(Less): Net Movement in Regulatory Deferral Balances Add/(Less): Net Movement in Regulatory Deferral Balances in respect of earlier years Add/(Less): Deferred Tax Recoverable/(Payable) (Refer Note 3.11.3) Add/(Less): Unallocable Revenue Total Segment Revenue Discontinued Operations- Others # Total Segment Revenue as reported above Year ended 31st March, 2020 K crore Year ended 31st March, 2019 5,068.61 779.56 6,123.68 193.22 23,571.34 1,880.07 37,616.48 682.46 21.97 1,599.16 20.20 18,998.65 1,032.07 22,354.51 75.22 12.94 537.40 4.04 45.74 675.34 223.61 133.09 318.00 2.51 677.21 5,786.70 857.35 6,427.64 153.51 22,845.08 2,064.30 38,134.58 1,360.67 18.50 1,365.92 31.56 18,702.06 966.27 22,444.98 59.71 11.58 313.57 2.26 87.30 474.42 213.08 137.16 270.41 0.78 621.43 For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 7,726.39 (792.24) (21.32) 162.16 (47.10) 7,027.89 343.74 7,371.63 8,255.25 (519.03) 274.26 98.19 (44.07) 8,064.60 143.59 8,208.19 # Pertains to Strategic Engineering Division being classified as Discontinued Operations. * Includes amount classified as held for sale other than Strategic Engineering Division. Notes: 1. Revenue from a DISCOM on sale of electricity with which Company has entered into a Power Purchase Agreement accounts for more than 10% of Total Revenue. Revenue from another customer (Industrial undertaking) pertaining to Finance lease accounts for more than 10% of Total Revenue. 331 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 43. Segment Reporting (Contd.) 2. Transfer prices between operating segments are on an arm's length basis in a manner similar to transactions with third parties. (b) Geographic Information: The Company's operations is majorly confined within India and as such there are no reportable geographical segments. 44. Impact of COVID-19 India and other global markets experienced significant disruption in operations resulting from uncertainty caused by the worldwide coronavirus pandemic. Majority of Company’s business includes generation, transmission and distribution of power in India. Further, Company also has significant investments in subsidiaries, joint ventures and associates involved in power supply and coal mining business in Indonesia. Considering power supply being an essential service, management believes that there is not much of an impact likely due to this pandemic on the business of the Company and its subsidiaries, joint ventures and associates except that there exists some uncertainty over impact of COVID-19 on future business performance of its coal mining companies which form part of Mundra CGU (comprising of investment in companies owing Mundra power plant, coal mine and related infrastructure). Based on the sensitivity analysis, management believes that the said uncertainty is not likely to impact the recoverability of Mundra CGU. The Company is also closely monitoring developments, its operations, liquidity and capital resources and is actively working to minimize the impact of this unprecedented situation. 45. Significant Events after the Reporting Period There were no significant adjusting events that occurred subsequent to the reporting period other than the events disclosed in the relevant notes. 46. Approval of Standalone Financial Statements The Standalone financial statements were approved for issue by the Board of Directors on 19th May, 2020. As per our report of even date For S R B C & CO LLP Chartered Accountants ICAI Firm Registration No.324982E/E300003 per ABHISHEK AGARWAL Partner Membership No. 112773 Mumbai, 19th May, 2020 For and on behalf of the Board, PRAVEER SINHA CEO & Managing Director DIN 01785164 BANMALI AGRAWALA Director DIN 00120029 RAMESH SUBRAMANYAM Chief Financial Officer H. M. MISTRY Company Secretary Mumbai, 19th May, 2020 332 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Standalone Financial Statements Independent Auditor's Report To the Members of The Tata Power Company Limited Report on the Audit of the Consolidated Financial Statements Opinion We have audited the accompanying consolidated Ind AS financial statements of The Tata Power Company Limited (hereinafter referred to as “the Holding Company”), its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”) its associates and joint ventures comprising of the consolidated Balance sheet as at March 31, 2020, the consolidated Statement of Profit and Loss, including Other Comprehensive Income, the consolidated Cash Flow Statement and the consolidated Statement of Changes in Equity for the year then ended and notes to the consolidated Ind AS financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated Ind AS financial statements”). In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of other auditors on separate financial statements and on the other financial information of the subsidiaries, associates and joint ventures, the aforesaid consolidated Ind AS financial statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group, its associates and joint ventures as at March 31, 2020, their consolidated profit including other comprehensive income, their consolidated cash flows and the consolidated statement of changes in equity for the year ended on that date. Basis for Opinion We conducted our audit of the consolidated Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor’s Responsibilities for the Audit of the Consolidated Ind AS Financial Statements section of our report. We are independent of the Group, associates, joint ventures in accordance with the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the consolidated Ind AS financial statements. Emphasis of Matter We draw attention to Note 45 of the consolidated Ind AS financial statements, wherein it is stated that there exists a material uncertainty about the impact of COVID-19 on the future operations of joint ventures and an associate of the Group. The auditors of respective companies have reported an Emphasis of Matter in this regard in their reports of the respective companies. Our opinion is not modified in respect of this matter. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated Ind AS financial statements for the financial year ended March 31, 2020. These matters were addressed in the context of our audit of the consolidated Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated Ind AS financial statements. The results of audit procedures performed by us and by other auditors of components not audited by us, as reported by them in their audit reports furnished to us by the management, including those procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated Ind AS financial statements. 333 OverviewStatutory ReportsFinancial StatementsFuture ready for smart choicesOur Emphasis on ValueOur Value-creation Paradigm • 115 included “Revenue How our audit addressed the key audit matter Our audit procedures and procedures performed by component auditors, amongst others, the following: • Considered the Group's accounting policies with respect to accrual of regulatory deferrals and assessing Ind AS 114 “Regulatory Deferral compliance with Accounts” from Ind AS and Contract with Customers”. Performed test of controls over revenue recognition and accrual of regulatory deferrals through inspection of evidence of performance of these controls. Performed the tests of details including the following key procedures: • Key audit matters Revenue recognition and accrual of regulatory deferrals (as described in Note 18 and 28 of the consolidated Ind AS financial statements) In the regulated generation, transmission and distribution business of the Group, the tariff is determined by the regulator on cost plus return on equity basis wherein the cost is subject to prudential norms. The Group invoices its customers on the basis of pre-approved tariff which is based on budget and is subject to true up. The Group recognizes revenue on the basis of tariff invoiced to customers. As the Group is entitled to a fixed return on equity, the Group recognizes accrual for the shortage / excess compared to the entitled return on equity. The Group has recognized ` 1,027.12 crore for generation and transmission business and ` 5,480.17 crore for distribution business as accruals as at March 31, 2020. Accruals are determined based on tariff regulations and past tariff orders and are subject to verification and approval by the are subject to prudential checks and prescribed norms. Significant in determining the accruals interpretation of tariff regulations. Further certain disallowances of claims have been litigated by the Group before higher authorities. In the renewables business of the Group, certain customers have raised dispute with respect to the tariff as per the executed power purchase agreement (‘PPA’) and are making part payment of invoices. Pending outcome of litigation, the Group continues to recognize revenue at PPA rate. Revenue recognition and accrual of regulatory deferrals is a key audit matter considering the significance of the amount and significant judgements involved in the determination. Recognition and measurement of deferred tax (as described in Note 12 and 33 of the consolidated Ind AS financial statements) competence of management’s expert. For tariff orders received by the Group, assessed the impact recognized by the Group and for matters litigated by the Group, also assessed the management’s evaluation of the likely outcome of the dispute based on past precedents and/or advice of management’s expert. Evaluated the key assumptions used by the Group by comparing it with prior years, past precedents and the opinion of management’s expert. in accordance with the Ind AS 114 “Regulatory Deferral from Ind AS requirements of Accounts” and Contract with Customers”. independence, objectivity and • Assessed the disclosures judgements are made • Considered the regulators. “Revenue including incurred Further costs the 115 • • The Group has recognized Minimum Alternate Tax (MAT) credit receivable of ` 1,250.49 crore as at March 31, 2020. The Group also has recognized deferred tax assets of ` 297.97 crore on long term capital loss on sale of investments. Further, pursuant to the Taxation Laws (Amendment) Act, 2019 (new tax regime), the Group has remeasured its deferred tax balances expected to reverse after the likely transition to new tax regime, at the rate specified in the new tax regime and has recognized a net gain of ` 159.25 crore. The recognition and measurement of MAT credit receivable and deferred tax balances; is a key audit matter as the recoverability of such credits within the allowed time frame in the manner prescribed under tax regulations and estimation of year of transition to the new tax regime involves significant estimate of the financial projections, availability of sufficient taxable income in the future and significant judgements in the interpretation of tax regulations and tax positions adopted by the Group. 334 Our audit procedures and procedures performed by component auditors, amongst others, the following: included • • Considered Group’s accounting policies with respect to recognition and measurement of tax balances in accordance with Ind AS 12 “Income Taxes” Performed test of controls over recognition and measurement of tax balances through inspection of evidence of performance of these controls. Performed the tests of details including the following key procedures: • • Involved tax specialists who evaluated the Group’s tax positions basis the tax law and also by comparing it with prior years and past precedents. • Discussed the future business plans and financial projections with the management. • Assessed the management’s long-term financial projections and the key assumptions used in the projections by comparing it to the approved business plan, projections used for estimation of likely year of transition to the new tax regime and projections used for impairment assessment where applicable. • Assessed the disclosures in accordance with the requirements of Ind AS 12 “Income Taxes”. Independent Auditor's ReportThe Tata Power Company Limited Integrated Annual Report 2019-20 Impairment of assets (as described in Note 4, 5 and 6 of the consolidated Ind AS financial statements) As per the requirements of Ind AS 36 "Impairment of Assets", the Group tests the Goodwill acquired in business combination for impairment annually. For other assets, the Group assesses at the end of every reporting period, whether there is any indication that an asset or cash generating unit (CGU) may be impaired. If any such indication exists, the Group estimates the recoverable amount of the asset or CGU. • Considered the Group's accounting policies with respect to impairment in accordance with Ind AS 36 “Impairment of assets” Our audit procedures and procedures performed by component auditors, amongst others, the following: included The determination of recoverable amount, being the higher of fair value less costs to sell and value-in-use involves significant estimates, assumptions and judgements of the long-term financial projections. The Group is carrying Goodwill of ` 1,641.57 crore relating to acquisition of renewable energy businesses. The Group is also carrying impairment provision amounting to ` 1,119.77 crore with respect to Mundra CGU (comprising of investment in companies owning Mundra power plant, coal mines and related infrastructure), ` 221.86 crore for investment in company owning hydro power plant in Georgia and ` 100.00 crore with respect to a generating unit in Trombay. During the year, as the indication exists, the Group has reassessed its impairment assessment with respect to the specified CGUs. Impairment of assets is a key audit matter considering term the significance of estimation and the significant judgements involved in the impairment assessment. the carrying value, long • • Performed test of controls over impairment process through inspection of evidence of performance of these controls. Performed the tests of details including the following key procedures: • Obtained the management’s impairment assessment. • Evaluated the key assumptions including projected generation, coal prices, exchange rate, energy prices post power purchase agreement period and weighted average cost of capital by comparing them with prior years and external data, where available. • Obtained and evaluated the sensitivity analysis. • Assessed the disclosures in accordance with Ind AS 36 “Impairment of assets”. Going concern assessment (as described in Note 40.4.3 of the consolidated Ind AS financial statements) The Group has current liabilities of ` 26,521.43 crore and current assets of ` 12,021.48 crore as at March 31, 2020. Current liabilities exceeds current assets as at the year end. Given the nature of its business i.e. contracted long term power supply agreements and a significant composition of cost plus contracts leading to significant stability of is confident cashflows and profitability, management of refinancing and consider the low and accordingly, the Group uses significant short term borrowings to reduce its borrowing costs. liquidity risk as Management has made an assessment of the Group’s ability to continue as a Going Concern as required by Ind AS 1 "Presentation of Financial Statements" considering all the available information and has concluded that the going concern basis of accounting is appropriate. Going Concern assessment has been identified as a key audit matter considering the significant judgements and estimates involved in the assessment and its dependence upon management’s ability to complete the planned divestments, raising long term capital and/or successful refinancing of certain current financial obligations. Our procedures, amongst others, included the following: • Obtained an understanding of the process and tested the internal controls associated with the management’s assessment of Going Concern assumption. • Discussed with management and assessed judgements and estimates used the in assumptions, assessment having to past performance and current emerging business trends affecting the business and industry. regards • Assessed the Group’s ability to refinance its obligation based on the past trends, credit ratings, ability to generate cash flows and access to capital. • Assessed the adequacy of the disclosures in the consolidated Ind AS financial statements. 335 OverviewStatutory ReportsFinancial StatementsFuture ready for smart choicesOur Emphasis on ValueOur Value-creation Paradigm Information Other than the Financial Statements and Auditor’s Report Thereon The Holding Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the consolidated Ind AS financial statements and our auditor’s report thereon. Our opinion on the consolidated Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the consolidated Ind AS financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. in the India, including Responsibilities of Management for the Consolidated Financial Statements The Holding Company’s Board of Directors is responsible for the preparation and presentation of these consolidated Ind AS financial statements in terms of the requirements of the Act that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated cash flows and consolidated statement of changes in equity of the Group including its associates and joint ventures in accordance with the accounting principles generally accepted Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. The respective Board of Directors of the companies included in the Group and of its associates and joint ventures are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Group and of its associates and joint ventures and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated Ind AS financial statements by the Holding Company, as aforesaid. the Directors of In preparing the consolidated Ind AS financial statements, the respective Board of Directors of the companies included in the Group and of its associates and joint ventures are responsible for assessing the ability of the Group and of its associates and joint ventures to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Those respective Board of Directors of the companies included in the Group and of its associates and joint ventures are also responsible for overseeing the financial reporting process of the Group and of its associates and joint ventures. Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated Ind AS financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the consolidated Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional the override of omissions, misrepresentations, or internal control. • • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Holding Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. 336 Independent Auditor's ReportThe Tata Power Company Limited Integrated Annual Report 2019-20 • • • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group and its associates and joint ventures to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated Ind AS financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group and its associates and joint ventures to cease to continue as a going concern. the consolidated Evaluate the overall presentation, structure and content Ind AS financial statements, of including the disclosures, and whether the consolidated Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group and its associates and joint ventures of which we are the independent auditors and whose financial information we have audited, to express an opinion on the consolidated Ind AS financial statements. We are responsible for the direction, supervision and performance of the audit of the financial statements of such entities included in the consolidated Ind AS financial statements of which we are the independent auditors. For the other entities included in the consolidated Ind AS financial statements, which have been audited by other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion. We communicate with those charged with governance of the Holding Company and such other entities included in the consolidated Ind AS financial statements of which we are the independent auditors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated Ind AS financial statements for the financial year ended March 31, 2020 and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. information, Other Matter (a) We did not audit the financial statements and other financial in respect of 12 subsidiaries, whose Ind AS financial statements include total assets of ` 11,246.33 crore as at March 31, 2020, and total revenues of ` 8,731.09 crore and net cash outflows of ` 7.58 crore for the year ended on that date. These Ind AS financial statements and other financial information have been audited by other auditors, whose financial statements, other financial information and auditor’s reports have been furnished to us by the management. The consolidated Ind AS financial statements also include the Group’s share of net profit of ` 670.90 crore for the year ended March 31, 2020, as considered in the consolidated Ind AS financial statements, in respect of 6 associates and joint ventures, whose financial statements, other financial information have been audited by other auditors and whose reports have been furnished to us by the Management. Our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, and our report in terms of sub-sections (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, joint ventures and associates, is based solely on the reports of such other auditors. Certain of these subsidiaries, associates and joint ventures are located outside India whose financial statements and other financial information have been prepared in accordance with accounting principles generally accepted in their respective countries and which have been audited by other auditors under generally accepted auditing standards applicable in their respective countries. The Holding Company’s management has converted the financial statements of such subsidiaries, associates and joint ventures located outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. 337 OverviewStatutory ReportsFinancial StatementsFuture ready for smart choicesOur Emphasis on ValueOur Value-creation Paradigm (b) We have audited these conversion adjustments made by the Holding Company’s management. Our opinion in so far as it relates to the balances and affairs of such subsidiaries, associates and joint ventures located outside India is based on the report of other auditors and the conversion adjustments prepared by the management of the Holding Company and audited by us. Ind AS financial The accompanying consolidated statements include unaudited financial statements and other unaudited financial information in respect of 1 subsidiary, whose financial statements and other financial information reflect total assets of ` 50.02 crore as at March 31, 2020, and total revenues of Nil and net cash outflows of ` 0.44 crore for the year ended on that date. These unaudited financial statements and other unaudited financial information have been furnished to us by the management. The consolidated Ind AS financial statements also include the Group’s share of net profit of ` 14.98 crore for the year ended March 31, 2020, as considered in the consolidated Ind AS financial statements, in respect of 13 associates and joint ventures, whose financial statements, other financial information have not been audited and whose unaudited financial statements, other unaudited financial information have been furnished to us by the Management. Our opinion, in so far as it relates amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, and our report in terms of sub-sections (3) of Section 143 of the Act in so far as it relates to the aforesaid subsidiaries, joint ventures and associates, is based solely on such unaudited financial statements and other unaudited financial information. In our opinion and according to the information and explanations given to us by the Management, these financial statements and other financial information are not material to the Group. Our opinion above on the consolidated Ind AS financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements and other financial information certified by the Management. Report on Other Legal and Regulatory Requirements As required by Section 143(3) of the Act, based on our audit and on the consideration of report of the other auditors on separate financial statements and the other financial information of subsidiaries, associates and joint ventures, as noted in the ‘other matter’ paragraph we report, to the extent applicable, that: 338 (a) We/the other auditors whose report we have relied upon have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated Ind AS financial statements; (b) (c) (d) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidation of the financial statements have been kept so far as it appears from our examination of those books and reports of the other auditors; The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including the Statement Income, the Consolidated of Other Comprehensive Cash Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of the consolidated Ind AS financial statements; Statement Flow and Ind AS In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended; (e) On the basis of the written representations received from the directors of the Holding Company as on March 31, 2020 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors who are appointed under Section 139 of the Act, of its subsidiary companies, associate companies and joint ventures, none of the directors of the Group’s companies, its associates and joint ventures, incorporated in India, is disqualified as on March 31, 2020 from being appointed as a director in terms of Section 164 (2) of the Act; (f) With respect to the adequacy and the operating effectiveness of the internal financial controls over financial reporting with reference to these consolidated Ind AS financial statements of the Holding Company and its subsidiary companies, associate companies and joint ventures, incorporated in India, refer to our separate Report in “Annexure 2” to this report; (g) In our opinion and based on the consideration of reports of other statutory auditors of the subsidiaries, associates and joint ventures incorporated in India, the managerial remuneration for the year ended March 31, 2020 has been paid/provided by the Holding Company, its subsidiaries, Independent Auditor's ReportThe Tata Power Company Limited Integrated Annual Report 2019-20 associates and joint ventures incorporated in India to their directors in accordance with the provisions of section 197 read with Schedule V to the Act; applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts. (h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the report of the other auditors on separate financial statements as also the other financial information of the subsidiaries, associates and joint ventures, as noted in the ‘Other matter’ paragraph: i. The consolidated Ind AS financial statements disclose the impact of pending litigations on its consolidated financial position of the Group, its associates and joint ventures in its consolidated Ind AS financial statements – Refer Note 36 to the consolidated Ind AS financial statements; iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company, joint ventures, its subsidiaries, associates and incorporated India during the year ended in March 31, 2020. For S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E/E300003 per Abhishek Agarwal Partner Membership Number: 112773 UDIN: 20112773AAAACW7931 ii. Provision has been made in the consolidated Ind AS financial statements, as required under the Mumbai Date: May 19, 2020 339 OverviewStatutory ReportsFinancial StatementsFuture ready for smart choicesOur Emphasis on ValueOur Value-creation Paradigm Annexure 1 to the Independent Auditor’s Report of even date on the Consolidated Financial Statements of The Tata Power Company Limited adequate internal financial controls over financial reporting with reference to these consolidated Ind AS financial statements was established and maintained and if such controls operated effectively in all material respects. Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) In conjunction with our audit of the consolidated Ind AS financial statements of The Tata Power Company Limited as of and for the year ended March 31, 2020, we have audited the internal financial controls over financial reporting of The Tata Power Company Limited (hereinafter referred to as the “Holding Company”) and its subsidiary companies, its associate companies and joint ventures, which are companies incorporated in India, as of that date. in incorporated Management’s Responsibility for Internal Financial Controls The respective Board of Directors of the Holding Company, its subsidiary companies, its associate companies and joint India, ventures, which are companies are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Holding Company internal control considering the essential components of stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act. Auditor’s Responsibility Our responsibility is to express an opinion on the company's internal financial controls over financial reporting with reference to these consolidated Ind AS financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, both, issued by Institute of Chartered Accountants of India, and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether 340 Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over financial reporting with reference to these consolidated Ind AS financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these consolidated Ind AS financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of their reports referred to in the "Other Matters" paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls over financial reporting with reference to these consolidated Ind AS financial statements. to Internal Financial Controls Over these Meaning of Financial Reporting with Reference Consolidated Financial Statements A company's internal financial control over financial reporting with reference to these consolidated Ind AS financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting with reference to these consolidated Ind AS financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised Independent Auditor's ReportThe Tata Power Company Limited Integrated Annual Report 2019-20 acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. of Internal Limitations Financial Inherent Controls Over Financial Reporting with Reference to these Consolidated Financial Statements Because of the inherent limitations of internal financial controls over financial reporting with reference to these consolidated Ind AS financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting with reference to these consolidated financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these consolidated Ind AS financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. reference to these consolidated Ind AS financial statements were operating effectively as at March 31, 2020, based on the internal control over financial reporting criteria established by the Holding Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. Other Matters Our report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting with reference to these consolidated Ind AS financial statements of the Holding Company, in so far as it relates to these 12 subsidiary companies which are companies incorporated in India, is based on the corresponding reports of the auditors of such subsidiary companies incorporated in India. For S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E/E300003 Opinion In our opinion, the Holding Company, its subsidiary companies, its associate companies and joint ventures, which are companies incorporated in India, have, maintained in all material respects, adequate internal financial controls over financial reporting with reference to these consolidated Ind AS financial statements and such internal financial controls over financial reporting with Mumbai Date: May 19, 2020 per Abhishek Agarwal Partner Membership Number: 112773 UDIN: 20112773AAAACW7931 341 OverviewStatutory ReportsFinancial StatementsFuture ready for smart choicesOur Emphasis on ValueOur Value-creation Paradigm Consolidated Balance Sheet as at 31st March, 2020 ASSETS Non-current Assets (a) Property, Plant and Equipment (b) Capital Work-in-Progress (c) Goodwill (d) Other Intangible Assets (e) (f) Financial Assets Investments accounted for using the Equity Method (i) Other Investments (ii) Trade Receivables (iii) Loans (iv) Finance Lease Receivables (v) Other Financial Assets (g) Non-current Tax Assets (Net) (h) Deferred Tax Assets (Net) (i) Other Non-current Assets Total Non-current Assets Current Assets (a) Inventories (b) Financial Assets (i) Investments (ii) Trade Receivables (iii) Unbilled Revenue (iv) Cash and Cash Equivalents (v) Bank Balances other than (iv) above (vi) Loans (vii) Finance Lease Receivables (viii) Other Financial Assets (c) Current Tax Assets (Net) (d) Other Current Assets Total Current Assets Assets Classified as Held For Sale Total Assets before Regulatory Deferral Account Regulatory Deferral Account - Assets TOTAL ASSETS As at 31st March, 2020 ₹ crore As at 31st March, 2019* ₹ crore As at 1st April, 2018* ₹ crore Notes Page 4 361 5 a. 5 b. 6 a. 6 c. 7 8 9 10 11 12 a. 13 365 366 368 379 380 383 383 385 386 386 391 44,662.61 1,611.52 1,641.57 1,362.18 13,202.65 632.68 30.28 80.88 588.92 578.79 342.00 74.24 1,185.12 65,993.44 41,101.50 2,575.70 1,641.57 1,561.82 12,513.48 861.41 192.99 90.56 565.62 316.75 238.01 89.49 1,358.07 63,106.97 41,431.61 1,652.60 1,641.57 1,583.08 11,530.27 881.11 190.05 77.56 574.76 273.68 167.59 118.17 1,577.31 61,699.36 14 392 1,752.35 1,706.42 1,623.08 15 7 16 a. 16 b. 8 9 10 11 13 393 380 393 394 383 383 385 386 391 17 a. 394 18 398 699.51 4,425.90 799.42 1,861.50 232.68 33.00 33.20 1,412.43 1.10 770.39 12,021.48 6,253.06 84,267.98 5,480.17 89,748.15 166.98 4,445.26 837.85 645.45 142.00 87.18 37.90 241.59 2.67 1,881.85 10,195.15 5,102.68 78,404.80 5,758.13 84,162.93 436.16 2,788.93 810.09 1,061.16 124.62 754.47 34.27 401.59 14.77 1,512.32 9,561.46 4,339.26 75,600.08 6,304.56 81,904.64 342 The Tata Power Company Limited Integrated Annual Report 2019-20 Consolidated Balance Sheet as at 31st March, 2020 (Contd.) EQUITY AND LIABILITIES Equity (a) Equity Share Capital (b) Unsecured Perpetual Securities (c) Other Equity Equity attributable to Shareholders of the Company Non-controlling Interests Total Equity Liabilities Non-current Liabilities (a) Financial Liabilities (i) Borrowings (ii) Lease Liabilities (iii) Trade Payables (iv) Other Financial Liabilities (b) Non-current Tax Liabilities (Net) (c) Deferred Tax Liabilities (Net) (d) Provisions (e) Other Non-current Liabilities Total Non-current Liabilities Current Liabilities (a) Financial Liabilities (i) Borrowings (ii) Lease Liabilities (iii) Trade Payables (iv) Other Financial Liabilities (b) Current Tax Liabilities (Net) (c) Provisions (d) Other Current Liabilities Total Current Liabilities Liabilities directly associated with Assets Classified as Held For Sale Total Liabilities before Regulatory Deferral Account Regulatory Deferral Account - Liability As at 31st March, 2020 ₹ crore As at 31st March, 2019* ₹ crore As at 1st April, 2018* ₹ crore Notes Page 19 a. 19 b. 20 399 400 401 21 22 23 24 12 b. 25 26 27 22 23 24 25 26 403 405 406 407 386 407 416 416 405 406 407 407 416 17 b. 395 18 398 270.50 1,500.00 17,795.52 19,566.02 2,332.04 21,898.06 32,695.14 3,180.48 Nil 721.52 3.03 1,174.04 407.40 2,084.52 40,266.13 11,844.36 379.74 5,095.44 7,502.90 129.49 116.42 1,453.08 26,521.43 1,062.53 67,850.09 Nil 270.50 1,500.00 16,535.01 18,305.51 2,166.66 20,472.17 270.50 1,500.00 14,608.55 16,379.05 2,015.29 18,394.34 31,139.23 Nil 22.75 687.31 3.74 1,056.81 333.60 1,873.75 35,117.19 13,875.38 Nil 5,481.49 6,480.79 150.22 93.55 1,499.64 27,581.07 992.50 63,690.76 Nil 22,356.31 Nil 21.00 647.31 3.74 516.56 300.00 1,841.48 25,686.40 18,827.28 Nil 5,609.82 9,942.98 160.38 108.94 1,785.72 36,435.12 903.78 63,025.30 485.00 TOTAL EQUITY AND LIABILITIES 89,748.15 84,162.93 81,904.64 * Restated (Refer Note 44) See accompanying notes to the Consolidated Financial Statements As per our report of even date For S R B C & CO LLP Chartered Accountants For and on behalf of the Board, PRAVEER SINHA CEO & Managing Director BANMALI AGRAWALA Director ICAI Firm Registration No.324982E/E300003 DIN 01785164 DIN 00120029 per ABHISHEK AGARWAL Partner Membership No. 112773 Mumbai, 19th May, 2020 RAMESH SUBRAMANYAM Chief Financial Officer H. M. MISTRY Company Secretary Mumbai, 19th May, 2020 343 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Consolidated Statement of Profit and Loss for the year ended 31st March, 2020 Notes 28 29 Page 417 425 For the year ended For the year ended 31st March, 2019* ₹ crore 29,881.06 386.15 30,267.21 31st March, 2020 ₹ crore 29,136.37 562.61 29,698.98 30 426 30 31 32 426 426 427 4 & 5 361 & 366 428 33 18 18 3.15 398 398 360 4a (i) & 17b(iii)(c) 37d. 6b (ii) & (iii) 37e. 12 6b (i) (b) 363 & 395 433 378 433 386 378 34a. 12 428 386 12 386 17c. 17c. 396 396 6,220.46 9,922.39 214.00 957.18 111.74 (15.64) 1,440.64 4,493.73 2,633.56 6,359.53 11,640.02 248.23 919.35 345.22 24.37 1,339.05 4,170.00 2,393.13 2,342.78 28,320.84 2,260.15 29,699.05 1,378.14 (451.68) (21.32) 284.31 (188.69) 568.16 (340.19) 274.26 169.20 103.27 1,189.45 671.43 952.55 2,142.00 1,401.83 2,073.26 Nil Nil 532.51 (276.35) (265.00) 235.00 226.16 2,368.16 494.30 330.95 (24.51) (159.25) 641.49 1,726.67 (81.64) (361.00) Nil (32.41) (32.41) (410.23) (106.41) (45.00) 1,897.24 Nil Nil Nil 1,745.83 3,819.09 524.66 544.02 18.91 Nil 1,087.59 2,731.50 (191.82) Nil (71.92) 5.94 (65.98) (125.84) I II III IV V VI Revenue from Operations [Refer Note 37(d)] Other Income Total Income Expenses Cost of Power Purchased Cost of Fuel [Refer Note 37(d)] Transmission Charges Raw Material Consumed Purchase of Finished Goods and Spares (Increase)/Decrease in Stock-in-Trade and Work in Progress Employee Benefits Expense (Net) Finance Costs [Refer Note 22 & 37(d)] Depreciation and Amortisation Expenses (Refer Note 22) Other Expenses Total Expenses Profit/(Loss) Before Movement in Regulatory Deferral Balances, Exceptional Items, Tax and Share of Net Profit of Associates and Joint Ventures accounted for using the Equity Method Add/(Less): Net Movement in Regulatory Deferral Balances Add/(Less): Net Movement in Regulatory Deferral Balances in respect of earlier years Add/(Less): Deferred Tax Recoverable/(Payable) Profit/(Loss) Before Exceptional Items, Tax and Share of Net Profit of Associates and Joint Ventures accounted for using the Equity Method Share of Net Profit of Associates and Joint Ventures accounted for using the Equity Method VII Profit/(Loss) Before Exceptional Items and Tax Add/(Less): Exceptional Items Impairment in respect of Property, Plant and Equipment Provision for Contingencies Gain on Sale of Investments in Associates Standby Litigation Remeasurement of Deferred Tax Recoverable on account of New Tax Regime (Net) Reversal of Impairment for Investment in Joint Venture & related obligation VIII Profit/(Loss) Before Tax IX Tax Expense/(Credit) Current Tax Deferred Tax Deferred Tax relating to earlier years Remeasurement of Deferred Tax on account of New Tax Regime (Net) X XI Profit/(Loss) for the Year from Continuing Operations Profit/(Loss) before tax from Discontinued Operations Impairment Loss related to Discontinued Operations on remeasurement to Fair Value XII Tax Expense/(Credit) of Discontinued Operations Current Tax Deferred Tax Tax Expense/(Credit) of Discontinued Operations XIII Profit/(Loss) for the Year from Discontinued Operations 344 The Tata Power Company Limited Integrated Annual Report 2019-20 Consolidated Statement of Profit and Loss for the year ended 31st March, 2020 (Contd.) Notes Page 25 407 34a (iii) 34a (iii) 430 430 XIV Profit/(Loss) for the Year XV Other Comprehensive Income/(Expenses) - Continuing Operations A Add/(Less): (i) Items that will not be reclassified to Profit or Loss Remeasurement of the Defined Benefit Plans (a) Equity Instruments classified at FVTOCI (b) Gain on sale of Investment classified at FVTOCI (c) Assets Classified as Held For Sale (d) - Equity Instruments classified at FVTOCI (ii) Tax relating to items that will not be reclassified to Profit or Loss (a) (b) Current Tax Deferred Tax (iii) Share of Other Comprehensive Income/(Loss) of Associates and B Add/(Less): (i) Joint Ventures accounted for using the Equity Method (net of tax) Items that will be reclassified to Profit or Loss (a) Exchange Differences in translating the financial statements of foreign operations (b) Effective portion of cash flow hedge (ii) Tax relating to items that will be reclassified to Profit or Loss (a) Deferred Tax (iii) Share of Other Comprehensive Income/(Loss) of Associates and Joint Ventures accounted for using the Equity Method (net of tax) XVI Other Comprehensive Income/(Expenses) - Discontinued Operations Add/(Less): (i) (ii) Items that will not be reclassified to Profit or Loss Income tax relating to items that will not be reclassified to Profit or Loss 34a. (iii) 430 XVII Total Other Comprehensive Income for the Year (XV + XVI) XVIII Total Comprehensive Income for the Year (XIV + XVII) Profit for the year attributable to: - Owners of the Company - Non-controlling Interest Other comprehensive Income for the year attributable to: - Owners of the Company - Non-controlling Interest Total Comprehensive Income for the year attributable to: - Owners of the Company - Non-controlling Interest XIX Basic and Diluted Earnings Per Equity Share (of ₹ 1/- each) (₹) 38 434 (i) From Continuing Operations before net movement in regulatory deferral balances (ii) From Continuing Operations after net movement in regulatory deferral balances (iii) From Discontinued Operations (iv) Total Operations after net movement in regulatory deferral balances * Restated (Refer Note 44) See accompanying notes to the Consolidated Financial Statements For the year ended For the year ended 31st March, 2019* ₹ crore 2,605.66 31st March, 2020 ₹ crore 1,316.44 (87.56) (39.72) Nil Nil 13.22 13.73 2.23 430.63 128.84 (32.43) 407.06 836.00 0.20 Nil 0.20 836.20 2,152.64 1,017.38 299.06 1,316.44 838.25 (2.05) 836.20 1,855.63 297.01 2,152.64 5.33 4.64 (1.52) 3.12 (23.91) 2.68 1.66 (31.05) 6.81 (0.06) (1.43) 187.18 Nil Nil 23.35 165.23 (1.14) 0.40 (0.74) 164.49 2,770.15 2,356.19 249.47 2,605.66 164.92 (0.43) 164.49 2,521.11 249.04 2,770.15 8.29 8.54 (0.46) 8.08 As per our report of even date For S R B C & CO LLP Chartered Accountants ICAI Firm Registration No.324982E/E300003 per ABHISHEK AGARWAL Partner Membership No. 112773 Mumbai, 19th May, 2020 For and on behalf of the Board, PRAVEER SINHA CEO & Managing Director DIN 01785164 BANMALI AGRAWALA Director DIN 00120029 RAMESH SUBRAMANYAM Chief Financial Officer H. M. MISTRY Company Secretary Mumbai, 19th May, 2020 345 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Consolidated Statement of Cash Flows for the year ended 31st March, 2020 A. Cash Flow from Operating Activities Profit/(Loss) before tax from Continuing Operations Profit/(Loss) before tax from Discontinued Operations Adjustments to reconcile Profit Before Tax to Net Cash Flows: Depreciation and Amortisation Expense Impairment in respect of Other Property, Plant & Equipment and Goodwill Transfer to Contingency Reserve Reversal of Impairment of Non-Current Investments and related obligation Impairment Loss on Remeasurement related to Discontinued Operations (Gain)/Loss on disposal of Property, Plant and Equipment (Net) Finance Cost (Net of Capitalisation) Interest Income Dividend Income Gain on sale of Current Investment measured at fair value through Profit and Loss Gain on sale of Investment in Joint Venture/Associates accounted for using the equity method Allowances for Doubtful Debts and Advances (Net) Amortisation of premium paid on Leasehold Land Impairment of Non-current Investments Provision for Warranties Delayed Payment Charges Transfer from Capital Grants Amortisation of Service Line Contributions Guarantee Commission from Joint Ventures Share of Net Profit of Associates and Joint Ventures accounted for using the equity method Amortisation of Deferred Revenue Effect of Exchange Fluctuation (Net) Working Capital Adjustments: Adjustments for (increase) / decrease in Assets: Inventories Trade Receivables Unbilled Revenue Finance Lease Receivables Loans-Current Loans-Non Current Other Current Assets Other Non-current Assets Other Financial Assets - Current Other Financial Assets - Non-current Regulatory Deferral Account - Assets Current Investments Purchased Proceeds from sale 346 For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019* ₹ crore 2,368.16 (442.64) 3,819.09 (191.82) 2,633.56 Nil 17.00 (235.00) 361.00 24.99 4,529.88 (135.55) (85.87) (53.39) (532.51) 20.71 Nil Nil 10.45 (49.46) (3.15) (89.18) (9.40) (952.55) 38.69 (105.59) (21.32) (96.56) 54.23 (18.60) (13.17) 8.58 387.45 214.01 10.51 (58.14) 277.97 (365.48) 226.15 2,393.13 106.41 16.00 Nil Nil 31.96 4,206.33 (76.26) (5.41) (48.92) (1,897.24) 72.54 10.48 (1.30) 15.14 (87.48) (3.56) (82.96) (9.83) (1,401.83) 60.48 (30.37) 5,384.63 7,310.15 3,267.31 6,894.58 (85.19) (1,649.03) 84.93 5.51 46.13 (24.25) (45.22) (83.91) 138.46 (15.66) 546.41 (407.81) 518.63 The Tata Power Company Limited Integrated Annual Report 2019-20 Consolidated Statement of Cash Flows for the year ended 31st March, 2020 (Contd.) Non-Current Investments Proceeds from sale Movement in Operating Asset Adjustments for increase / (decrease) in Liabilities: Trade Payables Other Current Liabilities Other Non-current Liabilities Other Financial Liabilities - Current Other Financial Liabilities - Non-current Regulatory Deferral Account - Liability Current Provisions Non-current Provisions Movement in Operating Liability Cash flow from/(used in) Operations Income tax paid - (net of refund received) Net Cash Flows from/(used) in Operating Activities A For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019* ₹ crore 3.68 6.26 609.31 (964.74) (796.97) 448.63 141.53 233.51 26.04 Nil (57.19) 69.40 (42.56) (315.50) (79.97) 28.11 74.61 (485.00) (75.19) 45.25 64.95 7,984.41 (609.09) 7,375.32 (850.25) 5,079.59 (505.80) 4,573.79 B. Cash Flow from Investing Activities Capital expenditure on Property, Plant and Equipment (including capital advances) (2,225.81) (3,576.22) Proceeds from sale of Property, Plant and Equipment (including property, plant and equipment classified as held for sale) Purchase of Current Investments Proceeds from sale of Current Investments Consideration transferred on business combinations Purchase of Non-current Investments Proceeds from sale of Non-current Investments (Including advance and investments classified as held for sale) Inter-corporate Deposits (Net) Interest Received Delayed Payment Charges received Guarantee Commission Received Dividend Received Bank Balance not Considered as Cash and Cash Equivalents Net Cash Flow from/(used in) Investing Activities B C. Cash Flow from Financing Activities Proceeds from Issue of Shares including shares issued to Minority Shareholders Increase in Capital/Service Line Contributions Proceeds from Non-current Borrowings Repayment of Non-current Borrowings Proceeds from Current Borrowings Repayment of Current Borrowings Finance Cost Paid Payment of Lease Liability (includes interest of ₹ 308.73 crore) Dividend Paid Additional Income-tax on Dividend Paid Distribution on Unsecured Perpetual Securities Net Cash Flow from/(used in) Financing Activities C 36.37 (14,978.62) 14,673.11 Nil (615.26) 577.88 Nil 164.92 49.61 3.84 1,894.53 (123.50) (542.92) 20.07 80.10 7,188.37 (5,607.42) 42,412.07 (44,100.06) (4,002.50) (330.03) (500.57) (98.60) (171.00) (5,109.57) 42.91 (20,728.77) 20,936.88 (13.14) (47.92) 2,507.08 83.61 139.35 34.33 9.59 308.66 (15.60) (319.24) Nil 97.00 10,867.07 (9,978.26) 34,846.52 (36,376.94) (3,976.10) Nil (410.36) (82.38) (171.00) (5,184.45) 347 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Consolidated Statement of Cash Flows for the year ended 31st March, 2020 (Contd.) Net Increase in Cash and Cash Equivalents (A + B + C) Cash and Cash Equivalents as at 1st April (Opening Balance) Effect of Exchange Fluctuation on Cash and Cash Equivalents Cash and Cash Equivalents as at 31st March (Closing Balance) Notes: Cash and Cash Equivalents include: (a) Balances with banks (Refer Note 16a.) (i) (ii) In Current Accounts In Deposit Accounts (with original maturity of three months or less) (b) Cheques on Hand Cash on Hand (c) Bank Overdraft (d) Cash and Cash Equivalents relating to Continuing Operations (a) (b) Balances with banks (i) Book Overdraft In Current Accounts Cash and Cash Equivalents relating to Discontinued Operations Cash and Cash Equivalent pertaining to Asset Classified as Held For Sale Total Cash and Cash Equivalents * Restated (Refer Note 44) See accompanying notes to the Consolidated Financial Statements For the year ended 31st March, 2020 ₹ crore 1,722.83 61.52 50.04 1,834.39 For the year ended 31st March, 2019* ₹ crore (929.90) 944.52 46.90 61.52 935.27 919.77 6.44 0.02 (34.71) 1,826.79 7.62 (0.02) 7.60 Nil 1,834.39 320.87 311.90 11.69 0.99 (590.89) 54.56 6.13 (0.02) 6.11 0.85 61.52 As per our report of even date For S R B C & CO LLP Chartered Accountants ICAI Firm Registration No.324982E/E300003 per ABHISHEK AGARWAL Partner Membership No. 112773 Mumbai, 19th May, 2020 For and on behalf of the Board, PRAVEER SINHA CEO & Managing Director DIN 01785164 BANMALI AGRAWALA Director DIN 00120029 RAMESH SUBRAMANYAM Chief Financial Officer H. M. MISTRY Company Secretary Mumbai, 19th May, 2020 348 The Tata Power Company Limited Integrated Annual Report 2019-20 Consolidated Statement of Changes in Equity for the year ended 31st March, 2020 s t s e r e t n I e g d e h e v i t c e ff E f o n o i t r o p w o fl h s a c n g i e r o F y c n e r r u C e v r e s e R n o i t a l s n a r T r e h t O h g u o r h t e v i s n e h e r p m o C t n e m u r t s n I y t i u q E d e n i a t e R i s g n n r a E y r o t u t a t S s e v r e s e R d n u F l a i c e p S e v r e s e R e v r e s e R e v r e s e R l a t i p a C e v r e s e R l a t i p a C e r u t n e b e D s e i t i r u c e S n o i t p m e d e R n o i t p m e d e R i m u m e r P l a r e n e G e v r e s e R . 0 5 0 7 2 e r o r c ₹ t n u o m A l i N l i N . 0 5 0 7 2 . 0 5 0 7 2 e r o r c ₹ t n u o m A . 0 0 0 0 5 1 , s e r a h S f o . o N , 0 1 5 3 7 7 4 0 7 2 , , l i N , 0 1 5 3 7 7 4 0 7 2 , , l i N , , 0 1 5 3 7 7 4 0 7 2 , s e r a h S f o . o N . 0 0 0 0 0 5 1 , l i N l i N . 0 0 0 0 5 1 , . 0 0 0 0 0 5 1 , l i N l i N . 0 0 0 0 5 1 , . 0 0 0 0 0 5 1 , s e i t i r u c e S l a u t e p r e P d e r u c e s n U . B ) 0 2 e t o N r e f e R ( y t i u q E r e h t O . C 9 1 0 2 , h c r a M t s 1 3 t a s a e c n a l a B 8 1 0 2 , l i r p A t s 1 t a s a e c n a l a B r a e y e h t g n i r u d d e u s s I 0 2 0 2 , h c r a M t s 1 3 t a s a e c n a l a B r a e y e h t g n i r u d d e u s s I l a t i p a C e r a h S y t i u q E . A 9 1 0 2 , h c r a M t s 1 3 t a s a e c n a l a B 8 1 0 2 , l i r p A t s 1 t a s a e c n a l a B r a e y e h t g n i r u d d e u s s I 0 2 0 2 , h c r a M t s 1 3 t a s a e c n a l a B r a e y e h t g n i r u d d e u s s I e r o r c ₹ l a t o T - n o N g n i l l o r t n o C e m o c n I e v i s n e h e r p m o C r e h t O f o m e t I l s u p r u S d n a s e v r e s e R n o i t p i r c s e D . 9 4 4 6 1 . 6 6 5 0 6 2 , . 4 8 3 2 6 6 1 , . 5 1 0 7 7 2 , l i N l i N l i N l i N . ) 2 3 1 2 5 ( . ) 0 0 1 7 1 ( . 7 6 1 0 7 8 1 , . 7 6 1 0 7 8 1 , s t s e r e t n I . 9 2 5 1 0 2 , . 7 4 9 4 2 ) 3 4 0 ( . . 4 0 9 4 2 ) 7 6 7 9 ( . l i N l i N l i N l i N l i N . 6 6 6 6 1 2 , . 6 6 6 6 1 2 , g n i l l o r t n o c . 2 9 4 6 1 . 9 1 6 5 3 2 , . 5 5 8 0 6 4 1 , . 1 1 1 2 5 2 , l i N l i N l i N l i N . ) 5 6 3 2 4 ( . ) 0 0 1 7 1 ( . 1 0 5 3 5 6 1 , . 1 0 5 3 5 6 1 , . 4 4 6 1 3 1 , . 0 2 6 3 8 . 4 6 2 5 1 2 , 7 0 0 2 . . ) 6 0 6 7 5 ( l i N l i N l i N . ) 6 7 0 7 1 ( . 6 5 7 2 1 0 2 , . 6 0 9 9 2 ) 5 0 2 ( . . 1 0 7 9 2 7 0 0 2 . . 8 3 7 1 0 1 , l i N . 5 2 8 3 8 . 3 6 5 5 8 1 , . ) 0 7 1 5 1 ( . ) 6 3 4 2 4 ( l i N l i N l i N l i N l i N l i N l i N . ) 6 7 0 7 1 ( . 4 0 2 3 3 2 , . 2 5 5 9 7 7 1 , l i N 6 2 1 . 6 2 1 . ) 6 2 1 ( . l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N 1 4 6 9 . 1 4 6 9 . 1 4 6 9 . l i N . 7 6 7 6 3 . 8 2 9 0 2 . 8 2 9 0 2 l i N l i N l i N l i N l i N l i N e m o c n I ) 7 7 4 4 ( . l i N ) 6 8 7 2 ( . ) 6 8 7 2 ( . l i N l i N . 5 1 1 7 7 l i N l i N l i N . 5 9 6 7 5 . 2 5 8 9 6 l i N . 5 9 6 7 5 . 8 6 7 3 8 . 8 6 7 3 8 l i N l i N l i N l i N l i N l i N . 3 6 4 1 4 1 , l i N . 2 5 8 9 6 ) 2 7 9 3 ( . ) 2 7 9 3 ( . l i N l i N . ) 4 3 6 6 6 ( l i N l i N l i N ) 4 5 7 ( . . 4 4 2 5 4 2 , . 8 0 0 6 6 . 5 0 9 1 1 . 9 0 2 3 2 6 7 5 1 . . 6 1 3 7 0 1 , . 0 8 7 4 6 5 , . 3 5 6 8 0 4 , ) 6 7 7 1 ( . . 9 1 6 5 3 2 , . 3 4 8 3 3 2 , . 6 2 4 4 3 . ) 5 6 3 2 4 ( . ) 5 1 1 7 7 ( . ) 0 0 0 0 5 ( ) 4 5 3 ( . . ) 0 0 1 7 1 ( . 9 7 5 6 2 3 , . 9 7 5 6 2 3 , . 8 3 7 1 0 1 , l i N ) 2 1 6 5 ( . . 6 2 1 6 9 . 4 3 6 6 6 . ) 6 3 4 2 4 ( 0 7 0 9 . ) 8 4 1 ( . . ) 6 7 0 7 1 ( l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N 4 5 3 . l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N . 0 0 0 0 5 l i N l i N l i N l i N l i N l i N l i N l i N . ) 6 2 4 4 3 ( l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N 8 4 1 . l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N ) 0 7 0 9 ( . l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N . 8 0 0 6 6 . 9 5 2 2 1 . 9 0 2 3 2 . 6 7 5 1 5 . 0 9 8 2 7 . 8 0 0 6 6 . 9 5 2 2 1 . 9 0 2 3 2 . 6 7 5 1 5 . 0 9 8 2 7 . 0 8 7 4 6 5 , . 3 5 6 8 0 4 , . 0 8 7 4 6 5 , . 3 5 6 8 0 4 , . 9 4 7 8 3 4 , . 8 0 0 6 6 . 7 0 4 2 1 . 9 0 2 3 2 . 6 7 5 1 5 . 0 2 8 3 6 . 0 8 7 4 6 5 , . 3 5 6 8 0 4 , A L A W A R G A I L A M N A B 9 2 0 0 2 1 0 0 N D I r o t c e r i D y r a t e r c e S y n a p m o C Y R T S I M . M . H , d r a o B e h t f o f l a h e b n o d n a r o F r o t c e r i D g n i g a n a M & O E C A H N I S R E E V A R P 4 6 1 5 8 7 1 0 N D I M A Y N A M A R B U S H S E M A R r e c ffi O l a i c n a n i F f e i h C 0 2 0 2 , y a M h t 9 1 , i a b m u M ) x a T f o t e N ( r a e y e h t r o f ) s e s n e p x E ( / e m o c n I e v i s n e h e r p m o C r e h t O e m o c n I e v i s n e h e r p m o C l a t o T * 8 1 0 2 , l i r p A t s 1 t a s a e c n a l a B r a e y e h t r o f t fi o r P i i i ) d n e d v d n o x a t g n d u l c n i ( d a p d n e d v D i i i ) x a T f o t e N ( r a e y e h t r o f ) s e s n e p x E ( / e m o c n I e v i s n e h e r p m o C r e h t O r a e y e h t g n i r u d s e r a h S y t i u q E f o e u s s I e m o c n I e v i s n e h e r p m o C l a t o T * 9 1 0 2 , h c r a M t s 1 3 t a s a e c n a l a B r a e y e h t r o f t fi o r P ) x a T f o t e N ( s e i t i r u c e S l a u t e p r e P d e r u c e s n U n o n o i t u b i r t s i D 9 1 0 2 , h c r a M t s 1 3 t a s a e c n a l a B e v r e s e R n o i t p m e d e R l a t i p a C o t r e f s n a r T d n u F e v r e s e R l a i c e p S o t r e f s n a r T e v r e s e R n o i t p m e d e R e r u t n e b e D m o r f / o t r e f s n a r T l s e r a h S f o e a S n o s g n n r a E d e n a t e R o t i i r e f s n a r T i i i ) d n e d v d n o x a t g n d u l c n i ( d a p d n e d v D i i i s t n e m e t a t S l a i c n a n i F d e t a d i l o s n o C e h t o t s e t o n g n i y n a p m o c c a e e S ) x a T f o t e N ( s e i t i r u c e S l a u t e p r e P d e r u c e s n U n o n o i t u b i r t s i D e v r e s e R n o i t p m e d e R e r u t n e b e D m o r f / o t r e f s n a r T d n u F e v r e s e R l a i c e p S o t r e f s n a r T 0 2 0 2 , h c r a M t s 1 3 t a s a e c n a l a B ) 4 4 e t o N r e f e R ( d e t a t s e R * 3 0 0 0 0 3 E / E 2 8 9 4 2 3 o N n o i t a r t s i g e R m . r i F I A C I e t a d n e v e f o t r o p e r r u o r e p s A s t n a t n u o c c A d e r e t r a h C P L L O C & C B R S r o F L A W R A G A K E H S I H B A r e p r e n t r a P 3 7 7 2 1 1 . i o N p h s r e b m e M 0 2 0 2 , y a M h t 9 1 , i a b m u M 349 l s e r a h S f o e a S n o s g n n r a E d e n a t e R o t i i r e f s n a r T Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm Notes to the Consolidated Financial Statements 1. Corporate Information The Tata Power Company Limited (the ‘Company’ or 'Parent Company') is a public limited company domiciled and incorporated in India under the Indian Companies Act, 1913. The registered office of the Company is located at Bombay House, 24, Homi Mody Street, Mumbai 400 001 India. The Company is listed on the Bombay Stock Exchange of India Limited (BSE) and the National Stock Exchange of India Limited (NSE). The principal business of the Company is generation, transmission, distribution and trading of electricity. 2. 2.1 2.2 The Company and its subsidiaries (collectively referred to as 'the Group') is one of India's largest integrated power companies with an international presence. The Group together with its joint venture companies has an installed gross generation capacity of 12,742 MW and a presence in all the segments of the power sector viz. Fuel Security and Logistics, Generation (thermal, hydro, solar and wind), Transmission, Distribution and Trading. The Group has developed the country’s first 4,000 MW Ultra Mega Power Project at Mundra (Gujarat) based on super-critical technology. It is also one of the largest renewable energy players in India with a clean energy portfolio of 3,883 MW. Its international presence includes strategic investments in Indonesia, Singapore, Zambia, Georgia and Bhutan. With its track record of technology leadership, project execution excellence, world class safety processes, customer care and driving green initiatives the Group is poised for multi-fold growth and is committed to 'lighting up lives' for generations to come. Significant Accounting Policies Statement of compliance The consolidated Ind AS financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as notified under the Companies (Indian Accounting Standards) Rules, 2015 read with section 133 of the Companies Act, 2013 (as amended from time to time). Basis of preparation and presentation The consolidated Ind AS financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value or revalued amount: - derivative financial instruments, - certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments). - employee benefit expenses (Refer Note 25 for accounting policy) Historical cost is the amount of cash or cash equivalents paid or the fair value of the consideration given to acquire assets at the time of their acquisition or the amount of proceeds received in exchange for the obligation, or at the amount of cash or cash equivalents expected to be paid to satisfy the liability in the normal course of business. 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. 2.3 Basis of Consolidation The Group consolidates all entities which are controlled by it. The consolidated Ind AS financial statements comprise the financial statements of the Company and its subsidiaries. Control exists when the parent 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 the entity. Power is demonstrated through existing rights that give the ability to direct relevant activities, those which significantly affect the entity’s returns. The entities are consolidated from the date control commences until the date control ceases. 2.3.1 Subsidiaries The consolidated Ind AS financial statements of the Group companies are consolidated on a line-by-line basis and intra- group balances and transactions including unrealised gain/loss from such transactions are eliminated upon consolidation. These consolidated Ind AS financial statements are prepared by applying uniform accounting policies in use at the Group. Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interest having a deficit balance. Changes in the Group's holding that do not result in a loss of control are accounted for as equity transactions. The carrying amount of the Group's holding and the non-controlling interests are adjusted to reflect the changes in their relative holding. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company. 350 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 2. 2.3.2 Significant Accounting Policies (Contd.) Joint Ventures and Associates Joint Ventures are entities over which the Group has joint control. Associates are entities over which the Group has significant influence but not control. Investments in Joint Ventures and Associates are accounted for using the equity method of accounting. The investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss of the investee after the acquisition date. The Group’s investment in Joint Ventures and Associates includes goodwill identified on acquisition. (Refer Note 6a) 2.4 Business Combinations The Group accounts for its business combinations under acquisition method of accounting. Acquisition related costs are recognised in consolidated Ind AS statement of profit and loss as incurred. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the condition for recognition are recognised at their fair values at the acquisition date. Purchase consideration paid in excess of the fair value of net assets acquired is recognised as goodwill. Where the fair value of identifiable assets and liabilities exceed the cost of acquisition, after reassessing the fair values of the net assets and contingent liabilities, the excess is recognised as capital reserve. The interest of non-controlling shareholders is initially measured either at fair value or at the non-controlling interests’ proportionate share of the acquiree’s identifiable net assets. The choice of measurement basis is made on an acquisition- by-acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity of subsidiaries. Business combinations arising from transfers of interests in entities that are under the common control are accounted at historical costs. The difference between any consideration given and the aggregate historical carrying amount of assets and liabilities of the acquired entity are recorded in shareholders’ equity. In case of bargain purchase, before recognising gain in respect thereof, the Group determines whether there exists clear evidence of the underlying reasons for classifying the business combination as a bargain purchase. Thereafter, the Group reassesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and recognizes any additional assets or liabilities that are identified in that reassessment. The Group then reviews the procedures used to measure the amount that Ind AS requires for the purposes of calculating the bargain purchase. If the gain remains after this reassessment and review, the Group recognises it in other comprehensive income and accumulates the same in equity as capital reserve. This gain is attributed to the acquirer. If there does not exist clear evidence of the underlying reasons for classifying the business combination as a bargain purchase, the Group recognises the gain, after reassessing and reviewing, directly in equity as capital reserve. 2.5 Goodwill Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amount to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in other comprehensive income (OCI) and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in equity as capital reserve, without routing the same through OCI. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash- generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. A cash generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods. 351 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 2. 2.6 Significant Accounting Policies (Contd.) Details of the Group's subsidiaries at the end of the reporting period considered in the preparation of the Consolidated Ind AS Financial Statements are as follows: Country of Incorporation/ Principal Place of Business % voting power held as at 31st March, 2020 % voting power held as at 31st March, 2019 Name Subsidiaries (Direct) Af-Taab Investment Co. Ltd. Tata Power Trading Co. Ltd. NELCO Ltd. Maithon Power Ltd. Tata Power Delhi Distribution Ltd. Coastal Gujarat Power Ltd. India India India India India India Bhira Investments Pte. Ltd. (Formerly known as Bhira Investments Ltd.) Singapore Bhivpuri Investments Ltd. Khopoli Investments Ltd. Trust Energy Resources Pte. Ltd. TP Renewable Microgrid Ltd. TCL Ceramics Ltd (formerly known as Tata Ceramics Ltd). $ Tata Power International Pte. Ltd. Tata Power Solar Systems Ltd. Tata Power Renewable Energy Ltd. Tata Power Jamshedpur Distribution Ltd. TP Ajmer Distribution Ltd. Tata Power Green Energy Ltd. Subsidiaries (Indirect) PT Sumber Energi Andalan Tbk. $ NDPL Infra Ltd. Energy Eastern Pte. Ltd. Tatanet Services Ltd. (TNSL) (Consolidated with NELCO Ltd.) Supa Windfarm Ltd. Poolavadi Windfarm Ltd. Nivade Windfarm Ltd. Indo Rama Renewables Jath Ltd. TP Solapur Ltd. TP Kirnali Ltd. Walwhan Renewable Energy Ltd. Clean Sustainable Solar Energy Pvt Ltd. @ Dreisatz Mysolar24 Pvt Ltd. @ MI Mysolar24 Pvt Ltd. @ Northwest Energy Pvt Ltd. @ Solarsys Renewable Energy Pvt Ltd. @ Walwhan Solar Energy GJ Ltd. @ Walwhan Solar Raj Ltd. @ Walwhan Solar BH Ltd. @ Walwhan Solar MH Ltd. @ Mauritius Mauritius Singapore India India Singapore India India India India India Indonesia India Singapore India India India India India India India India India India India India India India India India India 352 100 100 50.04 74 51 100 100 100 100 100 100 100 100 50.04 74 51 100 100 100 100 100 100 57.07 57.07 100 100 100 100 100 100 92.50 51 ! 50.04 100 74 100 100 100 100 100 100 100 100 100 100 100 92.50 51 100 50.04 100 100 100 100 Nil Nil 100 99.99 99.99 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 2. Significant Accounting Policies (Contd.) Name Walwhan Wind RJ Ltd. @ Walwhan Solar AP Ltd. @ Walwhan Solar KA Ltd. @ Walwhan Solar MP Ltd. @ Walwhan Solar PB Ltd. @ Walwhan Energy RJ Ltd. @ Walwhan Solar TN Ltd. @ Walwhan Solar RJ Ltd. @ Walwhan Urja Anjar Ltd. @ Walwhan Urja India Ltd. @ Chirasthayee Saurya Ltd. Nelco Network Products Ltd. (Consolidated with NELCO Ltd.) Vagarai Windfarm Ltd. Far Eastern Natural Resources LLC # Country of Incorporation/ Principal Place of Business % voting power held as at 31st March, 2020 % voting power held as at 31st March, 2019 India India India India India India India India India India India India India Russia 100 100 100 100 100 100 100 100 100 100 100 50.04 72 100 100 100 100 100 100 100 100 100 100 100 100 50.04 72 100 3. 3.1 # Based on Unaudited Financial Information, certified by its Management for the year ended 31st March, 2020. @ Consolidated with Walwhan Renewable Energy Ltd. $ Classified as held for sale. ! Merged with Trust Energy Resources Pte. Ltd. during the year. Other Significant Accounting Policies, critical accounting estimates and judgements Foreign Currencies The Group’s consolidated Ind AS financial statements are presented in Indian Rupee, which is also the parent company’s functional currency. For each entity, the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency. Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition. However, for practical reasons, the Group uses an average rate if the average approximates the actual rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non- monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively). The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: a) Assets and liabilities are translated at the closing rate at the date of that balance sheet b) Income and expenses are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and c) All resulting exchange differences are recognised in OCI. 353 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 3. 3.2 Other Significant Accounting Policies, critical accounting estimates and judgements (Contd.) Current versus non-current classification The Group presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is: - expected to be realised or intended to be sold or consumed in normal operating cycle, - held primarily for the purpose of trading, - expected to be realised within twelve months after the reporting period, or - cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current. A liability is current when: - - - - it is expected to be settled in normal operating cycle, it is held primarily for the purpose of trading, it is due to be settled within twelve months after the reporting period, or there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. The Group classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities. The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Group has identified twelve months as its operating cycle. 3.3 Warranties Provisions for the expected cost of warranty obligations under local sale of goods legislation are recognised at the date of sale of the relevant products, at the Group's best estimate of the expenditure required to settle the Group's obligation. 3.4 Financial Instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities measured at fair value through profit or loss are recognised immediately in consolidated Ind AS statement of profit and loss. Effective interest method The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period. 3.5 Financial Assets All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the market place. All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets. 354 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 3. Other Significant Accounting Policies, critical accounting estimates and judgements (Contd.) 3.5.1 Financial assets at amortised cost Financial assets are subsequently measured at amortised cost using the effective interest rate method if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. 3.5.2 Financial assets at fair value through other comprehensive income (FVTOCI) A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. On initial recognition, the Group makes an irrevocable election on an instrument-by-instrument basis to present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments, other than equity investment which are held for trading. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the 'Reserve for equity instruments through other comprehensive income'. The cumulative gain or loss is not reclassified to consolidated Ind AS statement of profit and loss on sale of the investments. 3.5.3 Financial assets at fair value through profit or loss (FVTPL) Investments in equity instruments are classified as at FVTPL, unless the Group irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading. Other financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in consolidated Ind AS statement of profit and loss. 3.5.4 Investment in Joint Ventures and Associates Investment in joint ventures and associates are accounted using equity method less impairment. An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. 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. Impairment of investments The Group reviews its carrying value of investments carried at cost, amortised cost or equity method annually, or more frequently when there is an indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for in the statement of profit or loss. 3.5.5 Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a Group of similar financial assets) is primarily derecognised (i.e. removed from the Group’s balance sheet) when: the right to receive cash flows from the asset have expired, or - the Group has transferred its right to receive cash flows from the asset or has assumed an obligation to pay the received - cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. 355 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 3. Other Significant Accounting Policies, critical accounting estimates and judgements (Contd.) When the Group has transferred its right to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of the Group’s continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. 3.5.6 Impairment of financial assets The Group assesses at each date of balance sheet whether a financial asset or a Group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Group recognises lifetime expected losses for all contract assets and/or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. Financial liabilities and equity instruments 3.6 3.6.1 Classification as debt or equity Debt and equity instruments issued by a Group are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. 3.6.2 Equity Instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a Group entity are recognised at the proceeds received, net of direct issue costs. 3.6.3 Financial liabilities All financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in consolidated Ind AS statement of profit and loss when the liabilities are derecognised as well as through the effective interest rate (EIR) amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the consolidated Ind AS statement of profit and loss. 3.6.4 Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the consolidated Ind AS statement of profit and loss. 3.6.5 Financial guarantee contracts Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 - 'Financial Instruments' and the amount recognised less cumulative amortisation. 3.7 Derivative financial instruments and hedge accounting The Group enters into a variety of derivative financial instruments such as forward contracts, options contacts and interest rate swaps, to manage its exposure to foreign exchange rate risks, including foreign exchange forward contracts and cross currency swaps. Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. 356 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 3. Other Significant Accounting Policies, critical accounting estimates and judgements (Contd.) Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. The purchase contracts that meet the definition of a derivative under Ind AS 109 are recognised in the consolidated Ind AS statement of profit and loss. Any gains or losses arising from changes in the fair value of derivatives are taken directly to consolidated Ind AS statement of profit and loss. The Group adopts hedge accounting for forward, interest rate and commodity contracts wherever possible. At the inception of each hedge, there is a formal, documented designation of the hedging relationship. This documentation includes, inter alia, items such as identification of the hedged item transaction and nature of the risk being hedged. At inception, each hedge is expected to be highly effective in achieving an offset of changes in fair value or cash flows attributable to the hedged risk. The effectiveness of hedge instruments to reduce the risk associated with the exposure being hedged is assessed and measured at the inception and on an ongoing basis. The ineffective portion of designated hedges is recognised immediately in the consolidated Ind AS statement of profit and loss. When hedge accounting is applied: • • for fair value hedges of recognised assets and liabilities, changes in fair value of the hedged assets and liabilities attributable to the risk being hedged, are recognised in the consolidated Ind AS statement of profit and loss and compensate for the effective portion of symmetrical changes in the fair value of the derivatives. for cash flow hedges, the effective portion of the change in the fair value of the derivative is recognised directly in other comprehensive income and the ineffective portion is recognised in the consolidated Ind AS statement of profit and loss. If the cash flow hedge of a firm commitment or forecasted transaction results in the recognition of a non-financial asset or liability, then, at the time the asset or liability is recognised, the associated gains or losses on the derivative that had previously been recognised in equity are included in the initial measurement of the asset or liability. For hedges that do not result in the recognition of a non-financial asset or a liability, amounts deferred in equity are recognised in the consolidated Ind AS statement of profit and loss in the same period in which the hedged item affects the consolidated Ind AS statement of profit and loss. In cases where hedge accounting is not applied, changes in the fair value of derivatives are recognised in the consolidated Ind AS statement of profit and loss as and when they arise. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in equity is transferred to the consolidated Ind AS statement of profit and loss for the period. 3.8 Reclassification of financial assets and liabilities The Group determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Group’s senior management determines change in the business model as a result of external or internal changes which are significant to the Group’s operations. Such changes are evident to external parties. A change in the business model occurs when the Group either begins or ceases to perform an activity that is significant to its operations. If the Group reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Group does not restate any previously recognised gains, losses (including impairment gains or losses) or interest. 3.9 Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. 3.10 Government Grants Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grant will be received. 357 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 3. Other Significant Accounting Policies, critical accounting estimates and judgements (Contd.) Government grants relating to income are determined and recognised in the consolidated Ind AS statement of profit and loss over the period necessary to match them with the cost that they are intended to compensate and presented within other income. Government grants relating to the purchase of property, plant and equipment are reduced from the cost of the assets. The benefit of a Government loan at a below market rate of interest is treated as a Government grant, measured as the difference between proceeds received and the fair value of loan based on prevailing market interest rates. 3.11 Dividend distribution to equity shareholders of the Parent Company The Parent Company recognises a liability to make dividend distributions to its equity holders when the distribution is authorised and the distribution is no longer at its discretion. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity. In case of Interim Dividend, the liability is recognised on its declaration by the Board of Directors. 3.12 Service Concession Agreement (SCA) A Group entity has entered into contract for design, part finance, engineering, manufacture, supply, erection, testing, commissioning and operation and maintenance for 25 years of Grid Interactive Solar Power Project through Public Private Partnership with a public sector power generator (PSU). The PSU has paid part of the project cost to the Group on commissioning of plant/Handover of Project. Remaining cost and the operations and maintenance cost is being recovered over the period of the project in accordance with the agreement with the PSU. Ind AS 115 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. It requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. As per the arrangement, the share of electricity revenue is divided into three parts i.e. towards deferred payment, interest income and operation and maintenance revenue. The Group has initially measured financial asset at fair value and subsequently at amortized cost by recognising share of electricity sale revenue first towards operation and maintenance revenue. Subsequent thereto, amount is recognised as interest income at computed Internal Rate of Return (IRR) on opening balance of the financial asset. Further, surplus of revenue share over and above operation and maintenance revenue and interest income is recognised as recovery of the financial asset. Changes in Accounting Policies & Adoption of new and amended standards and interpretations 3.13 Ind AS 116 'Leases' Ind AS 116 - Leases was notified in March, 2019 and it replaces Ind AS 17 'Leases'. Ind AS 116 is effective for annual periods beginning on or after 1st April, 2019. The Group has applied Ind AS 116 ‘Leases’ (Ind AS 116) with a date of initial application of 1st April, 2019 using modified retrospective approach, under which the cumulative effect of initial application is recognised as at 1st April, 2019. Lessor accounting under Ind AS 116 is substantially unchanged from Ind AS 17. As a lessee, the Group previously classified leases as operating or finance lease based on its assessment of whether the lease transferred significantly all of the risk and rewards incidental to the ownership of the underlying asset of the Group. Under Ind AS 116, the Group recognises the right- of-use assets and lease liabilities as stated in the Note 4b & 22. On adoption of Ind AS 116, the Group has recognised ‘Right-of-use’ assets amounting to ₹ 3,786.47 crore (adjusted by the prepaid lease payments amounting to ₹ 341.00 crore) and ‘Lease liabilities’ amounting to ₹ 3,472.68 crore, (including re-classification of lease liability from trade payable and finance lease amounting to ₹ 24.00 crore and ₹ 3.03 crore respectively) as at 1st April, 2019. There is no impact on retained earnings as at 1st April, 2019. The Group has applied Ind AS 116 only to the contracts that were previously identified as leases. As a practical expedient, contracts previously identified as leases under Ind AS 17 has not reassessed as to whether contract is, or contains, a lease under Ind AS 116. 358 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 3. Other Significant Accounting Policies, critical accounting estimates and judgements (Contd.) The Group has used the following practical expedients when applying Ind AS 116 to leases previously classified as operating leases under Ind AS 17. - Applied a single discount rate to a portfolio of leases with similar characteristics. - Relied on its assessment of whether leases are onerous immediately before the date of initial applicable. - Applied the exemption not to recognise right-of-use asset and liabilities for leases with remaining lease term of 12 months or less. - Excluded initial direct costs from measuring the right-of-use assets at the date of application - Used hindsight when determining the lease term if the contract contains options to extend or terminate the lease. The lease liabilities as at 1st April, 2019 can be reconciled to the operating lease commitments as of 31st March, 2019 as follows: Particulars Operating lease commitments as at 31st March, 2019 (including cancellable and non-cancellable lease) Add: Liabilities for assets taken on finance lease Less: Commitments relating to short-term leases Less: Commitments relating to leases of low-value assets Net operating lease commitments Weighted average incremental borrowing rate as at 1st April, 2019 Discounted operating lease commitments as at 1st April, 2019 Add: Lease payments relating to renewal periods not included in operating lease Lease liabilities as at 1st April, 2019 ₹ crore 9,923.52 3.03 (29.42) (0.38) 9,896.75 4.46% to 10.00% 3,465.26 7.42 3,472.68 Accounting Policy for Leases till 31st March, 2019 Leasing arrangement The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement. The Group as lessee A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Group is classified as a finance lease. A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term. Operating lease payments are recognised as an expense in the consolidated Ind AS statement of profit and loss on a straight-line basis over the lease term. 3.14 Ind AS 12 'Income Taxes' Pursuant to the amendment in Indian Accounting Standard (Ind AS) 12 - “Income Taxes” effective from 1st April 2019, the Group has recognized the income tax consequence on interest on perpetual securities in the profit and loss which was earlier recognized directly in other equity and has restated the figures for previous year. Accordingly, the profit after tax for the year ended 31st March, 2019 is higher by ₹ 60.12 crore as compared to previous year reported profit. There is no impact on the “Other Equity” of the Group. 359 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 3. Other Significant Accounting Policies, critical accounting estimates and judgements (Contd.) 3.15 Deferred Tax Recoverable / Payable In the regulated operations of the Group where tariff recovered from consumers is determined on cost plus return on equity, the Income tax cost is pass through cost and accordingly the Group recognises Deferred tax recoverable / payable against any Deferred tax expense/ income. Until previous year, the same was presented under 'Tax Expenses' in the Consolidated Ind As Financial Statements. During the year, pursuant to an opinion by the Expert Advisory Committee of The Institute of Chartered Accountants of India, the same has now been included in 'Revenue from Operations' in case of Generation and Transmission Divisions and 'Net Movement in Regulatory Deferral Balances' in case of Distribution Division. There is no impact in the Other Equity and Profit/ (Loss) on account of such change in presentation. Impact of this restatement in the comparative year is as follows: Particulars Revenue from Operations - Increase / (Decrease) Movement in Net Regulatory Deferral Balances - Income / (Expense) Tax (expense) / credit Basic and diluted EPS from continuing operations before movement in regulatory deferral balances – Increase / (Decrease) 3.16 Critical accounting estimates and judgements ₹ crore Year ended 31st March, 2019 322.42 169.20 491.62 (0.40) In the application of the Group's accounting policies, the Management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the consolidated Ind AS financial statements. The areas involving critical estimates or judgements are: Estimates and judgements used for impairment assessment of property, plant and equipment of certain cash generating units (CGU) - Note 4 Estimation and judgements for impairment assessment of goodwill - Note 5a. Estimations used for fair value of unquoted securities and impairment assessment of investments - Note 6 Estimation of defined benefit obligation - Note 25 Estimation of provision for warranty claims - Note 25 Estimates related to accrual of regulatory deferrals and revenue recognition - Note 18 and 28 Estimations used for determination of tax expenses and tax balances - Note 34 and 12 Judgement to estimate the amount of provision required or to determine required disclosure related to litigation and claims against the Group - Note 36 and 37 Estimates and judgements related to the assessment of liquidity risk - Note 40.4.3. Estimates and judgement are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Group and that are believed to be reasonable under the circumstances. 360 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 4. Property, Plant and Equipment Accounting Policy Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price (net of trade discount and rebates) and any directly attributable cost of bringing the asset to its working condition for its intended use and for qualifying assets, borrowing costs capitalised in accordance with Ind AS 23. Capital work in progress is stated at cost, net of accumulated impairment loss, if any. Other Indirect Expenses incurred relating to project, net of income earned during the project development stage prior to its intended use, are considered as pre-operative expenses and disclosed under Capital Work-in-Progress. When significant parts of plant and equipment are required to be replaced at intervals, the Group depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the consolidated Ind AS statement of profit and loss as incurred. The accounting policy related to Right of Use Assets has been disclosed in Note 22. Depreciation Depreciation commences when an asset is ready for its intended use. Freehold land and assets held for sale are not depreciated. Regulated Assets Depreciation on Property, plant and equipment in respect of electricity business of the Group covered under Part B of Schedule II of the Companies Act, 2013, has been provided on the straight line method at the rates specified in tariff regulations notified by respective Electricity Regulatory Commission ('Regulator'). Non Regulated Assets Depreciation is recognised on the cost of assets (other than freehold land and properties under construction) less their residual values over their estimated useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. The Group, based on technical assessment made by technical expert and management estimate, depreciates certain items of building, plant and equipment over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used. Estimated useful lives of the Regulated and Non Regulated assets are as follows: Type of asset Hydraulic Works Buildings-Plant Buildings-Others Coal Jetty Railway Sidings, Roads, Crossings, etc. Plant and Equipments (excluding Computers and Data Processing units) Plant and Equipments (Computers and Data Processing units) Transmission Lines, Cable Network, etc. Furniture and Fixtures Office Equipments Motor Cars Motor Lorries, Launches, Barges etc. Ships Helicopters Useful lives 35 years 5 to 40 years 25 to 60 years 25 years 5 to 35 years 3 to 40 years 3 to 6 years 4 to 35 years 5 to 35 years 5 to 15 years 4 to 10 years 25 to 35 years 25 years 25 years 361 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 4. Property, Plant and Equipment (Contd.) De-recognition An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in consolidated Ind AS statement of profit and loss. Impairment of tangible and intangible assets The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets of or Group of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators. The Group basis its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a PPA period. To estimate Cash flow projections beyond periods covered by the most recent budgets/forecasts, the Group extrapolates cash flow projections in the budget using a steady or declining growth rate for subsequent years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the long-term average growth rate for the market in which the asset is used. Impairment losses of tangible and intangible assets are recognised in the consolidated Ind AS statement of profit and loss. 362 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements l a t o T e r o r c ₹ s t e s s A r e d n U e s a e L s r e t p o c i l e H i s p h S . c t e r o t o M , s e g r a B , s e l c i h e V , s e h c n u a L s e r u t x i F e l b a c k r o w t e n e c ffi O e r u t i n r u F n o i s s i m s n a r T d n a t n a l P t n e m p u q E i d n a d n a s e n i l t n e m p u q E i . c t e , s d a o R y a w l i a R , s g n d i s i s g n i s s o r c l a o C y t t e J ) . d t n o C ( i t n e m p u q E d n a t n a l P , y t r e p o r P s t e s s A d e n w O . 4 . a @ s r e h t O t n a l P s k r o W d n a L - s g n d i l i u B - s g n d i l i u B c i l u a r d y H l d o h e e r F n o i t p i r c s e D s t n e m e t a t S l a i c n a n i F d e t a d i l o s n o C e h t o t s e t o N . 3 0 8 7 1 3 , . ) 7 5 2 3 7 ( . 2 1 6 5 1 . ) 7 7 8 8 0 1 ( , . 3 3 5 6 4 9 5 , l i N l i N l i N l i N l i N ) 9 6 4 ( . ) 3 4 4 ( . l i N l i N l i N l i N ) 1 7 1 ( . . 0 3 5 3 l i N l i N l i N 4 8 1 1 . . ) 8 8 6 6 5 ( ) 9 6 9 1 ( . . 7 0 6 5 1 . ) 6 4 0 8 2 1 ( , l i N l i N l i N 3 2 9 2 . ) 5 2 4 ( . l i N l i N l i N 8 1 4 . ) 1 3 6 ( . 5 0 0 . l i N l i N . 1 7 0 8 5 ) 2 4 1 ( . l i N . 5 2 8 9 3 2 , l i N 7 0 1 . l i N l i N . ) 4 8 9 2 1 ( ) 5 0 0 ( . l i N l i N l i N l i N l i N l i N 0 9 8 2 . ) 7 3 2 ( . ) 6 2 0 ( . 2 0 3 8 . ) 1 6 1 ( . l i N . 1 2 7 5 9 7 5 , 3 4 4 . 1 0 7 3 . . 7 2 1 9 6 1 , . 5 4 1 0 1 . 8 4 3 6 1 . 4 4 0 2 1 . 4 1 0 0 2 6 , . 5 9 3 2 9 4 4 , . 4 8 2 0 1 . 0 1 6 0 1 . 9 7 2 5 7 . 1 3 5 8 1 2 , . 1 7 5 5 8 6 1 , 4 9 0 . 5 2 3 3 . . 5 7 4 5 4 . 6 4 4 5 . 1 9 2 7 5 5 1 8 . . 3 4 6 7 2 2 , . 0 4 6 9 6 2 1 , . 2 7 0 7 1 0 6 5 . . 5 1 1 2 2 . 8 2 3 4 5 . 6 8 3 9 2 l i N 9 1 0 2 , l i r p A t s 1 t a s a e c n a l a B ) 4 9 0 ( . ) 4 9 0 ( . l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N . 7 5 5 1 3 2 , 8 3 1 1 . . ) 9 8 6 3 6 ( 6 8 4 8 . . 9 6 9 2 6 8 1 , . 4 6 5 3 8 0 4 , . 0 5 1 0 1 1 4 , l i N l i N l i N l i N l i N l i N l i N 2 0 0 . ) 4 5 1 ( . 3 7 1 3 . l i N 9 4 3 . 7 5 3 . 6 7 3 . l i N l i N l i N 4 3 1 1 . . 2 5 6 3 2 1 , 2 8 5 6 . 5 3 0 1 . . ) 1 9 1 3 5 ( ) 8 2 1 1 ( . . 0 4 8 1 ) 5 2 4 ( . l i N l i N l i N l i N 3 5 3 5 . 6 0 7 8 . 1 7 8 . ) 4 8 5 ( . 4 0 0 . 1 0 0 . 7 4 4 8 . l i N l i N . 4 1 6 7 2 ) 7 6 0 ( . . 0 9 1 5 5 2 , . 7 2 4 2 8 1 , l i N ) 7 2 9 7 ( . . 2 4 5 8 . 2 8 6 2 5 4 1 , l i N l i N 8 9 1 . ) 5 0 0 ( . l i N l i N l i N 0 6 5 . l i N 5 1 8 2 . ) 4 3 2 ( . l i N 6 7 3 6 . ) 8 2 1 ( . 2 1 0 . 5 8 0 . l i N l i N l i N 7 3 2 1 . 5 6 2 7 . 1 6 1 6 . . 8 0 7 4 2 . 1 6 6 0 6 . 3 2 6 0 3 8 9 0 3 . 2 1 2 3 . 9 4 4 4 . 9 0 0 5 . . 9 7 1 3 5 . 4 6 1 3 5 . 7 1 0 6 6 1 , . 3 0 2 4 6 1 , . 4 1 0 3 2 . 0 6 2 4 2 7 0 0 4 . 9 9 6 4 . . 0 4 1 0 1 7 5 0 9 . 0 9 3 3 . 9 8 8 3 . . 4 8 6 2 2 4 , . 2 3 3 8 8 2 3 , . 1 7 3 2 9 3 , . 5 5 7 2 2 2 3 , l i N l i N l i N l i N l i N l i N . 7 9 8 4 0 1 , . 4 5 1 3 0 1 , ) b 4 e t o N r e f e R ( 9 1 0 2 , l i r p A t s 1 t a s a s t e s s A e s U i f o t h g R o t d e fi i s s a l c e R i g n u n i t n o C - e s n e p x E n o i t a i c e r p e D t n e m e v o M e g n a h c x E s t e s s a f o l a s o p s i D s n o i t a r e p O l e a s r o f d e h s a o t / l m o r f d e fi i s s a l c e R 0 2 0 2 , h c r a M t s 1 3 t a s a e c n a l a B ) a 7 1 e t o N r e f e R ( 0 2 0 2 , h c r a M t s 1 3 t a s A 9 1 0 2 , h c r a M t s 1 3 t a s A t n u o m a g n i y r r a c t e N 363 l i N 0 6 3 9 . . 6 4 8 8 1 . 7 3 8 1 1 . 4 7 8 7 7 6 , . 4 1 0 1 4 7 4 , . 3 6 3 0 1 . 0 1 6 0 1 . 7 8 8 7 7 . 8 7 6 6 2 2 , . 7 3 6 3 5 . 7 9 8 4 0 1 , 0 2 0 2 , h c r a M t s 1 3 t a s a e c n a l a B d n a n o i t a i c e r p e d d e t a l u m u c c A t n e m r i a p m i 1 0 0 . ) 9 6 0 ( . . 8 7 7 1 2 ) 3 2 0 ( . l i N ) 5 4 0 ( . 2 3 0 . ) 3 1 0 ( . ) 1 2 3 2 ( . ) a 7 1 e t o N r e f e R ( l i N 4 0 0 . l i N l i N . 6 4 6 3 5 l i N l i N 9 7 0 4 . ) 5 1 0 ( . . 4 5 1 3 0 1 , ) b 4 e t o N r e f e R ( 9 1 0 2 , l i r p A t s 1 t a s a s t e s s A e s U i f o t h g R o t d e fi i s s a l c e R 9 1 0 2 , l i r p A t s 1 t a s a e c n a l a B t s o C t n e m e v o M e g n a h c x E s n o i t i d d A s l a s o p s i D l e a s r o f d e h s a o t / l m o r f d e fi i s s a l c e R Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm l a t o T e r o r c ₹ s t e s s A r e d n U e s a e L s r e t p o c i l e H i s p h S r o t o M e c ffi O e r u t i n r u F n o i s s i m s n a r T d n a t n a l P . c t e , s e g r a B , s e l c i h e V , s e h c n u a L s e r u t x i F e l b a c k r o w t e n t n e m p u q E i d n a d n a s e n i l t n e m p u q E i . c t e , s d a o R y a w l i a R , s g n d i s i s g n i s s o r c l a o C y t t e J @ s r e h t O t n a l P s k r o W d n a L - s g n d i l i u B - s g n d i l i u B c i l u a r d y H l d o h e e r F n o i t p i r c s e D ) . d t n o C ( i t n e m p u q E d n a t n a l P , y t r e p o r P . 4 364 s t n e m e t a t S l a i c n a n i F d e t a d i l o s n o C e h t o t s e t o N . 6 2 2 2 4 2 , 3 4 7 9 . . ) 3 3 7 2 2 ( l i N l i N l i N . ) 0 8 2 7 7 ( . ) 5 6 5 2 2 ( l i N l i N l i N l i N l i N l i N l i N 3 4 7 9 . l i N l i N 5 9 7 . . 6 0 2 6 ) 1 3 3 1 ( . . ) 1 3 0 1 ( l i N l i N 0 1 3 . ) 5 8 4 ( . l i N . 8 6 9 0 5 ) 5 2 4 ( . ) 1 6 0 ( . ) 1 1 0 ( . ) 1 8 4 ( . . ) 0 5 5 6 4 ( . 5 6 7 3 4 6 5 , . 8 0 0 3 2 1 0 7 3 . . 4 8 3 9 5 1 , . 1 8 6 0 1 . 4 3 2 1 1 . 0 3 2 2 1 . 2 5 9 9 6 5 , . 6 5 3 1 9 3 4 , l i N . 3 5 4 6 6 1 , . ) 4 6 8 8 1 ( ) 3 7 0 ( . . 5 4 9 9 2 1 4 . l i N l i N l i N l i N l i N l i N l i N 5 6 2 1 . ) 9 3 0 ( . l i N 8 2 4 9 . ) 2 6 1 ( . ) 0 6 1 2 ( . ) 4 2 1 5 ( . . 0 1 6 0 1 . 3 1 2 6 7 . 9 8 3 4 1 2 , . 1 2 7 5 9 7 5 , 3 4 4 . . 1 0 7 3 . 7 2 1 9 6 1 , . 5 4 1 0 1 . 8 4 3 6 1 . 4 4 0 2 1 . 4 1 0 0 2 6 , . 5 9 3 2 9 4 4 , . 4 8 2 0 1 . 0 1 6 0 1 . 9 7 2 5 7 . 1 3 5 8 1 2 , . 8 6 6 3 5 . 4 9 3 7 9 8 1 0 2 , l i r p A t s 1 t a s a e c n a l a B t s o C l i N l i N 6 5 1 . ) 8 7 1 ( . . 6 4 6 3 5 3 3 2 6 . ) 5 4 1 ( . l i N ) 8 2 3 ( . . 4 5 1 3 0 1 , 9 1 0 2 , h c r a M t s 1 3 t a s a e c n a l a B d n a n o i t a i c e r p e d d e t a l u m u c c A l l e a s r o f d e h s a d e fi i s s a l c e R t n e m e v o M e g n a h c x E s n o i t i d d A s l a s o p s i D t n e m r i a p m i . 4 0 6 0 0 5 1 , 4 1 8 . 8 7 0 3 . . 1 0 8 6 3 2 5 8 4 . 7 0 3 6 . . 8 9 6 7 . 9 9 9 2 0 2 , . 1 8 6 5 2 1 1 , 4 2 9 6 . . 9 3 0 5 . 3 8 2 0 2 . 8 2 8 1 5 . 0 0 3 8 2 l i N 8 1 0 2 , l i r p A t s 1 t a s a e c n a l a B . 5 4 9 6 2 2 , 7 0 8 1 . 8 8 1 2 . . ) 3 2 6 5 1 ( l i N 0 9 2 . l i N l i N . ) 0 5 3 0 3 ( ) 0 1 0 1 ( . l i N 7 4 2 . l i N l i N l i N l i N l i N 1 9 4 6 . l i N 3 8 1 2 . 2 8 1 1 . ) 8 8 5 ( . l i N l i N l i N . 1 7 5 5 8 6 1 , 4 9 0 . . 5 2 3 3 . 5 7 4 5 4 6 4 4 5 . 2 3 3 1 . ) 0 1 3 ( . l i N l i N ) 8 3 0 ( . 1 9 2 7 . . 0 5 1 0 1 1 4 , . 1 6 1 3 4 1 4 , 9 4 3 . 6 7 3 . . 4 9 1 2 2 3 2 6 . . 2 5 6 3 2 1 , . 3 8 5 2 2 1 , 9 9 6 4 . 9 2 8 5 . 7 5 0 9 . 7 2 9 4 . 1 8 8 . ) 2 2 4 ( . l i N 5 0 0 . ) 7 0 0 ( . 5 5 1 8 . . 9 8 8 3 2 3 5 4 . . 9 8 0 5 2 ) 6 8 1 ( . l i N 7 0 0 . ) 6 6 2 ( . . 3 4 6 7 2 2 , . 0 4 6 9 6 2 1 , 2 7 0 7 . 1 0 6 5 . . 5 1 1 2 2 . 8 2 3 4 5 . 6 8 3 9 2 . 7 0 5 0 8 1 , 2 1 2 . . ) 1 2 7 3 1 ( ) 4 6 0 ( . l i N 2 6 5 . . 3 1 1 3 ) 6 3 0 ( . l i N . 5 3 0 1 . ) 2 6 8 3 2 ( l i N l i N l i N l i N l i N l i N l i N l i N ) 5 4 2 1 ( . ) 2 2 9 3 ( . 2 0 8 5 . ) 5 4 1 ( . l i N 5 6 7 . 7 3 2 1 . ) 1 5 1 ( . l i N l i N l i N l i N l i N l i N l i N l i N l i N . 1 7 3 2 9 3 , . 5 5 7 2 2 2 3 , . 3 5 9 6 6 3 , . 5 7 6 5 6 2 3 , 2 1 2 3 . . 9 0 0 5 . 4 6 1 3 5 1 2 0 3 . 1 7 5 5 . . 0 3 9 5 5 . 3 0 2 4 6 1 , . 0 6 2 4 2 . 4 5 1 3 0 1 , . 1 6 5 2 6 1 , . 8 6 3 5 2 . 4 9 3 7 9 r e f e R [ t n e m r i a p m I - r a e y e h t r o f e g r a h C i g n u n i t n o C - e s n e p x E n o i t a i c e r p e D s t e s s a f o l a s o p s i D s n o i t a r e p O t n e m e v o M e g n a h c x E ] w o e b l ) i ( e t o N 9 1 0 2 , h c r a M t s 1 3 t a s a e c n a l a B 9 1 0 2 , h c r a M t s 1 3 t a s A 8 1 0 2 , h c r a M t s 1 3 t a s A t n u o m a g n i y r r a c t e N l l e a s r o f d e h s a d e fi i s s a l c e R l f o e u a v g n y r r a c i t e N ( l t n a p n o i t a r e n e g r e w o p a l l a h t i R f o e u a v g n y r r a c i i t s n a g a e r o r c 7 0 8 1 ₹ f o e g r a h c . t n e m r i a p m i n a d e s i n g o c e r d a h p u o r G e h t , r a e y i s u o v e r p e h t g n i r u D . ) e l a s l r o f d e h s t e s s a s a d e fi i s s a l c n e e b s a h e r o r c 4 0 0 2 ₹ . : s e t o N ) a ( ) i ( h c i h w r o f r a e y r e i l r a e e h t n i . d t L y a b m o r T l i a n m r e T l a c i m e h C f o r e g r e m g n i r u d d e r i u q c a . ) e r o r c 8 8 0 ₹ - 9 1 0 2 , h c r a M . t s 1 3 ( e r o r c 8 8 0 ₹ o t g n i t a g e r g g a s e i t r e p o r p e b a v o m m l i ) a ( . 0 2 0 2 , h c r a M l t s 1 3 t a s a n o i t u o s e r g n d n e p d n a e t u p s i d n i i s i d e e d e l t i t e h t h c i h w r o f . ) e r o r c 7 5 7 2 ₹ - 9 1 0 2 , h c r a M . t s 1 3 ( e r o r c 7 5 7 2 ₹ o t g n i t a g e r g g a s e i t r e p o r p e b a v o m m l i ; s s e r g o r p n i s i s d e e d f o e l t i t f o n o i t a r t s i g e r h c i h w r o f s r a e y r e i l r a e n i d e r i u q c a ) e r o r c 1 0 8 ₹ - 9 1 0 2 . , h c r a M . t s 1 3 ( e r o r c 1 0 8 ₹ o t g n i t a g e r g g a s e i t r e p o r p e b a v o m m l i . s s e r g o r p n i s i s d e e d f o e l t i t f o n o i t a r t s i g e r . s s e c o r p n i s i s d e e d e l t i t f o n o i t a r t s i g e r e h t h c i h w r o f . ) e r o r c 2 0 7 9 2 ₹ - 9 1 0 2 , h c r a M . t s 1 3 ( e r o r c 2 0 7 9 2 ₹ o t g n i t a g e r g g a d n a l ) b ( ) c ( ) d ( : r o f t p e c x e , p u o r G e h t f o e m a n e h t n i l d e h e r a t n e m p u q e d n a t n a p l i , y t r e p o r p n i d e d u l c n i s e i t r e p o r p e b a v o m m l i f o s d e e d e l t i t e h T ) i i i ( . . ) e r o r c 8 1 8 0 4 ₹ 9 1 0 2 , h c r a M t s 1 3 ( e r o r c 8 1 8 0 4 ₹ s i . 0 2 0 2 , 1 3 h c r a M t a s a d e s i n g o c e r t n e m r i a p m I l a t o T ) b ( i . t n e m p u q E d n a t n a P l , y t r e p o r P n o d e t a e r c e g r a h c r o f 1 2 e t o N r e f e R ) i i ( The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 4. b. Property, Plant and Equipment (Contd.) Right of Use Assets - ROU (Refer Note 22) Description Cost Land Plant and Equipment Building- Plant Port Intake Channel Ships ₹ crore Total Balance as on 1st April 2019 due to adoption of Ind AS 116 [Refer Note 3.13] Exchange Movement Additions Disposals Reclassified to ROU at 1st April, 2019 (Refer Note 4a and 5b) Reclassified as held for Sale (Refer Note 17a) Balance as at 31st March, 2020 Accumulated depreciation and impairment Depreciation Expense - Continuing Operations Exchange Movement Reclassified to ROU at 1st April, 2019 (Refer Note 4a and 5b) Balance as at 31st March, 2020 Net carrying amount As at 31st March, 2020 As at 1st April, 2019 821.60 Nil 69.31 Nil 174.71 (43.61) 11.43 Nil 3.09 Nil Nil Nil 7.73 Nil 0.08 (0.53) 4.69 Nil 2,332.32 613.39 3,786.47 Nil 30.22 Nil Nil Nil 56.59 Nil Nil Nil Nil 56.59 102.70 (0.53) 179.40 (43.61) 1,022.01 14.52 11.97 2,362.54 669.98 4,081.02 66.63 Nil 52.63 4.88 Nil Nil 119.26 4.88 2.01 Nil 0.94 2.95 73.36 Nil Nil 50.30 3.30 Nil 197.18 3.30 53.57 73.36 53.60 254.05 902.75 821.60 9.64 11.43 9.02 2,289.18 616.38 3,826.97 7.73 2,332.32 613.39 3,786.47 Net carrying amount a. Owned Assets b. Right of Use Assets Total 5 a. Goodwill Cost Balance at beginning of year Additions during the year Less: Impairment charge during the year Balance at end of year As at 31st March, 2020 As at 31st March, 2019 ₹ crore ₹ crore 40,835.64 3,826.97 44,662.61 41,101.50 Nil 41,101.50 As at 31st March, 2020 As at 31st March, 2019 ₹ crore ₹ crore 1,641.57 1,641.57 Nil Nil Nil Nil 1,641.57 1,641.57 365 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 5 a. Goodwill (Contd.) In accordance with IND AS 36 “Impairment of Assets” the Group performed impairment testing of Goodwill assigned to each Cash Generating Unit (CGU) as at 31st March, 2020 applying value in use approach across all the CGUs i.e. using cash flow projections based on financial budgets covering contracted power sale agreements with procurers (15 to 20 years) considering a discount rate (pre-tax) in the range of 10.05% to 10.54% per annum. The Group has used financial projections for 15 to 20 years as the tariff rates are fixed as per PPA. Based on the results of the Goodwill impairment test, the estimated value in use in all CGUs were higher than their respective carrying amount, hence impairment provision recorded during the current year is ₹ Nil (31st March, 2019 - ₹ Nil). Management believes that any reasonably possible change in the key assumptions on which recoverable amount is based would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the Goodwill. The key assumptions used in the value in use calculations for the power cash-generating unit are as follows: Operation & Maintenance cost inflation Escalation of 5% Discount Rate Plant load factor (PLF) 10.05% to 10.54% (31st March, 2019 10.25% to 10.70%) Pre-Tax Discount rate has been derived based on current cost of borrowing and equity rate of return in line with the current market expectations. Plant load factor is estimated for each CGU based on past trend of PLF and expected PLF in future years 5 b. Other Intangible Assets Accounting Policy Intangible Assets acquired separately Intangible Assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses if any. Internally generated intangibles Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred. Derecognition of Intangible Assets An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in consolidated Ind AS statement of profit and loss when the asset is derecognised. Amortisation of Intangible Assets Intangible assets with finite lives are amortised over the useful economic life on straight line basis and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the consolidated Ind AS statement of profit and loss unless such expenditure forms part of carrying value of another asset. Estimated useful lives of the Intangible Assets are as follows: Type of asset Copyrights, patents, other intellectual property rights, services and operating rights Right to Use Assets (Intake Channel) Customer Contracts acquired under business combination Computer Software Power Distribution Rights For accounting policy related to impairment has been disclosed in Note 4 Useful lives 5 years 5 years 12 to 25 years 3 to 6 years 20 years 366 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 5 b. Other Intangible Assets (Contd.) Description Cost Balance as at 1st April, 2019 Reclassified to Right of Use Assets as at 1st April, 2019 (Refer Note 4b) Additions Disposal Balance as at 31st March, 2020 Accumulated amortisation and impairment Balance as at 1st April, 2019 Reclassified to Right of Use Assets as at 1st April, 2019 (Refer Note 4b) Amortisation expense - Continuing Operations Disposal Balance as at 31st March, 2020 Net carrying amount As at 31st March, 2020 As at 31st March, 2019 Description Cost Balance as at 1st April, 2018 Additions Disposal Balance as at 31st March, 2019 Accumulated amortisation and impairment Balance as at 1st April, 2018 Amortisation expense - Continuing Operations Impairment losses recognised in the statement of profit and loss Balance as at 31st March, 2019 Net carrying amount As at 31st March, 2019 As at 31st March, 2018 Copyrights, patents, other intellectual property rights, services and operating rights # Right To Use Assets (Intake Channel) $ Customer Contracts acquired under business combination Computer Software $ Power Distribution Rights @ ₹ crore Total 12.92 174.71 1,386.14 393.32 47.09 2,014.18 Nil (174.71) 0.75 (9.07) 4.60 Nil Nil Nil Nil Nil Nil Nil 21.91 (0.03) Nil (174.71) 23.78 (0.36) 46.44 (9.46) 1,386.14 415.20 70.51 1,876.45 11.22 52.75 162.21 224.15 2.03 452.36 Nil (52.75) 0.57 (9.07) 2.72 Nil Nil Nil Nil 64.15 Nil Nil 55.81 (0.03) Nil 3.23 Nil (52.75) 123.76 (9.10) 226.36 279.93 5.26 514.27 1.88 Nil 1,159.78 135.27 65.25 1,362.18 1.70 121.96 1,223.93 169.17 45.06 1,561.82 Copyrights, patents, other intellectual property rights, services and operating rights # Right To Use Assets (Intake Channel) $ Customer Contracts acquired under business combination Computer Software $ Power Distribution Rights @ ₹ crore Total 12.40 174.71 1,386.57 315.38 27.69 1,916.75 0.52 Nil Nil Nil Nil (0.43) 87.74 (9.80) 19.40 Nil 107.66 (10.23) 12.92 174.71 1,386.14 393.32 47.09 2,014.18 10.62 0.60 45.35 7.40 100.34 176.32 62.30 52.39 1.04 0.99 333.67 123.68 Nil - (0.43) (4.56) Nil (4.99) 11.22 52.75 162.21 224.15 2.03 452.36 1.70 1.78 121.96 129.36 1,223.93 169.17 45.06 1,561.82 1,286.23 139.06 26.65 1,583.08 Internally generated intangible assets. Notes: # $ Other than internally generated Intangible Assets. @ Power Distribution Rights relate to the value of construction service obligation for construction and upgradation of the power supply infrastructure in Ajmer city as per the agreement with Ajmer Vidyut Vitaran Nigam Ltd. 367 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 5 b. Other Intangible Assets (Contd.) Depreciation/Amortisation-Continuing Operations Depreciation on Tangible Assets Add: Depreciation on Right of Use Assets Add: Amortisation on Intangible Assets Less: Depreciation/Amortisation Capitalised Total 6 a. Investments accounted for using the Equity Method As at 31st March, 2020 As at 31st March, 2019 ₹ crore 2,315.57 197.18 123.76 (2.95) ₹ crore 2,269.45 Nil 123.68 Nil 2,633.56 2,393.13 As at 31st March, 2020 Quantity As at 31st March, 2019 Quantity Face Value (in ₹ unless stated otherwise) As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore I Investment in Associates (a) Investment in Equity Shares fully Paid-up Unquoted Brihat Trading Pvt. Ltd. The Associated Building Co. Ltd. Yashmun Engineers Ltd. 3,350 1,825 19,200 3,350 1,825 19,200 10 900 100 Dagachhu Hydro Power Corporation Ltd. 10,74,320 10,74,320 Nu 1,000 Tata Projects Ltd. (Refer Note 44) 9,67,500 9,67,500 100 II Investment in Joint Ventures (a) Investment in Equity Shares fully Paid-up A 0.01 3.30 4.28 80.47 642.20 730.26 0.01 0.17 5.31 91.57 523.79 620.85 Unquoted PT Kaltim Prima Coal Indocoal Resources (Cayman) Ltd. PT Indocoal Kaltim Resources PT Nusa Tambang Pratama Candice Investments Pte. Ltd. PT Marvel Capital Indonesia PT Dwikarya Prima Abadi PT Kalimantan Prima Power Indocoal KPC Resources (Cayman) Ltd. Adjaristsqali Netherlands BV Khoromkheti Netherlands BV 1,23,540 1,23,540 USD 100 4,357.21 ** 5,270.77 ** 300 82,380 18,000 3 300 USD 1 3,794.31 3,458.27 82,380 IDR 10,000 0.32 18,000 IDR 10,000 1,521.47 3 SGD 1 28.86 0.28 1,205.90 18.88 1,07,459 1,07,459 IDR 10,000 Nil * Nil * 10,769 7,500 300 16,459 500 10,769 7,500 300 16,459 500 IDR 1,00,000 USD 100 USD 1 Euro 1 Euro 1 284.89 204.91 0.90 253.14 181.86 0.73 265.88 ** 362.05 ** Nil Nil Resurgent Power Ventures Pte. Ltd. [Refer Note 6b (v) below] 77,929 77,929 USD 1 Powerlinks Transmission Ltd. (Refer Note 4 below) 23,86,80,000 23,86,80,000 Industrial Energy Ltd. (Refer Note 4 below) 49,28,40,000 49,28,40,000 Dugar Hydro Power Ltd. Tubed Coal Mines Ltd. 4,32,50,002 4,32,50,002 1,01,97,800 1,01,97,800 Mandakini Coal Company Ltd. (Refer Note 4 below) 3,93,00,000 3,93,00,000 10 10 10 10 10 353.00 484.43 617.54 23.55 Nil Nil 5.02 465.81 567.31 23.59 Nil Nil carried forward ........................... 11,937.27 11,937.27 11,813.61 11,813.61 368 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 6 a. Investments accounted for using the Equity Method (Contd.) brought forward ........................... Quoted PT Baramulti Sukessarana Tbk. ** Less: Impairment in the value of Investments [Refer Note 6b (i) (a) & (b)] (b) Investment in Perpetual Securities in Joint Ventures Unquoted Adjaristsqali Netherlands BV ** Add/Less: Impairment in the value of Investments [Refer Note 6b (i) (b)] B C As at 31st March, 2020 Quantity As at 31st March, 2019 Quantity Face Value (in ₹ unless stated otherwise) As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 11,937.27 11,813.61 68,02,90,000 68,02,90,000 IDR 100 1,346.74 ** 1,181.76 ** 13,284.01 12,995.37 1,030.69 12,253.32 1,102.74 11,892.63 N.A. 219.07 96.83 Nil 219.07 96.83 Nil Total A+B+C 13,202.65 12,513.48 Notes: *Denotes figure below ₹ 50,000 **Impairment in the value of Investments 1. Aggregate Market Value of Quoted Investments 2. Aggregate Carrying Value of Quoted Investments (Net of Impairment) 3. Aggregate Carrying Value of Unquoted Investments (Net of Impairment) 588.31 1,067.23 653.35 925.86 12,135.42 11,587.62 4. Shares pledged The Group has pledged shares of joint ventures with the lenders for borrowings availed by the respective joint ventures. Details Itezhi Tezhi Power Corporation $ Mandakini Coal Company Ltd. Powerlinks Transmission Ltd. Industrial Energy Ltd. $ Classified as held for sale Category Joint Venture Joint Venture Joint Venture Joint Venture 31st March, 2020 Nos. 31st March, 2019 Nos. 4,52,500 2,00,43,000 23,86,80,000 25,13,48,400 4,52,500 2,00,43,000 23,86,80,000 25,13,48,400 III Details of Material Associates Details of each of the Group's Material Associates at the end of the reporting period are as follows: Name of Associate Principal Activity Sr. No. Country of Incorporation and Principal Place of Business Proportion of Ownership Interest / Voting Rights held by the Group As at 31st March, 2020 As at 31st March, 2019 A B Tata Projects Limited Dagachhu Hydro Power Corporation Limited EPC Contracts Hydro Power Generation Company India Bhutan 47.78% 26.00% 47.78% 26.00% 369 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 6 a. Investments accounted for using the Equity Method (Contd.) Summarised Financial Information of Material Associates A Tata Projects Ltd. Summarised Balance Sheet: Non-current Assets Current Assets Non-current Liabilities Current Liabilities Net Assets- Gross Less: Non-controlling interest Net Assets- Net Summarised Statement of Profit and Loss Revenue Profit/(Loss) for the year Other Comprehensive Income/(Expenses) for the year Total Comprehensive Income/(Expenses) for the year Reversal of Deferred Tax liability on unrealised profits As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 1,842.34 12,822.83 (1,676.15) (11,680.70) 1,308.32 10.73 1,297.59 1,432.72 12,024.15 (606.17) (11,591.91) 1,258.79 9.88 1,248.91 For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019 ₹ crore 10,687.05 13,417.67 108.65 (35.49) 73.16 96.00 169.16 244.34 0.12 244.46 Nil 244.46 Dividends received from Tata Projects Ltd. during the year 9.68 9.66 Reconciliation of the above summarised financial information to the carrying amount of the interest in Tata Projects Ltd. recognised in the consolidated Ind AS financial statements: Net Assets of Tata Projects Ltd. Proportion of the Group's ownership interest in Tata Projects Ltd. Goodwill Deferred Tax Liability on Unrealised profits Carrying amount of the Group's interest in Tata Projects Ltd. B Dagachhu Hydro Power Corporation Ltd. Summarised Balance Sheet Non-current Assets Current Assets Non-current Liabilities Current Liabilities Net Assets 370 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 1,297.59 47.78% 618.90 23.30 Nil 642.20 1,248.92 47.78% 596.49 23.30 (96.00) 523.79 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 1,054.54 25.69 (715.82) (54.78) 309.63 1,120.36 52.22 (751.58) (68.79) 352.21 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 6 a. Investments accounted for using the Equity Method (Contd.) Summarised Statement of Profit and Loss Revenue Profit/(Loss) for the year Other Comprehensive Income/(Expenses) for the year Total Comprehensive Income/(Expenses) for the year For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019 ₹ crore 143.11 (42.58) Nil (42.58) 124.36 (24.83) (0.04) (24.87) Dividends received from Dagachhu Hydro Power Corporation Ltd. during the year Nil Nil Reconciliation of the above summarised financial information to the carrying amount of the interest in Dagachhu Hydro Power Corporation Ltd. recognised in the consolidated Ind AS financial statements: Net Assets of Dagachhu Hydro Power Corporation Ltd. Proportion of the Group's ownership interest in Dagachhu Hydro Power Corporation Ltd. Carrying amount of the Group's interest in Dagachhu Hydro Power Corporation Ltd. As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 309.63 26.00% 80.51 352.21 26.00% 91.57 IV Details of individually not Material Associates Name of Associate Principal Activity Nelito Systems Ltd. $ Yashmun Engineers Ltd. Brihat Trading Private Ltd. Indian IT Solution and Services Billing and other related Services Trading Business The Associated Building Co. Ltd. Services Provided for Building $ Sold during the year Country of Incorporation and Principal Place of Business India India India India Proportion of Ownership Interest / Voting Rights held by the Group As at 31st March, 2020 As at 31st March, 2019 0.00% 27.27% 33.21% 33.14% 28.15% 27.27% 33.21% 33.14% Aggregate Summarised Financial Information of Associates that are not individually material The Group's share of Profit/(Loss) from Continuing Operations The Group's share of Other Comprehensive Income/(Expenses) The Group's share of Total Comprehensive Income/(Expenses) Aggregate carrying amount of the Group's interests in these Associates Unrecognised share of losses of an Associate Cumulative share of loss of an associate As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 2.10 Nil 2.10 0.01 Nil 0.01 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 7.55 5.49 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore Nil Nil As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore Nil Nil 371 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 6 a. V Investments accounted for using the Equity Method (Contd.) Details and Financial Information of Material Joint Ventures at the end of the reporting period is as follows: Name of Joint Venture Principal Activity SL No. Indocoal Resources (Cayman) Ltd. # Coal Trading Coal mining and exploration A PT Kaltim Prima Coal B C PT Nusa Tambang Pratama D PT Baramulti Suksessarana TBK E Industrial Energy Ltd. Infrastructure Support for Coal Business Coal mining and trading Power generation and operation of power plant Country of Incorporation and Principal Place of Business Proportion of Ownership Interest / Voting Rights held by the Group As at 31st March, 2020 As at 31st March, 2019 Indonesia Cayman Island Indonesia Indonesia 30.00% 30.00% 30.00% 26.00% 30.00% 30.00% 30.00% 26.00% India 74.00% 74.00% # Based on Unaudited Financial Information, certified by its Management for the year ended 31st March, 2020. A PT Kaltim Prima Coal Summarised Balance Sheet Non-current Assets Current Assets Non-current Liabilities Current Liabilities Net Assets The above amounts of assets and liabilities include the following: Cash and Cash Equivalents Current Financial Liabilities (excluding trade payables and provisions) Non-current Financial Liabilities (excluding trade payables and provisions) Summarised Statement of Profit and Loss Revenue Profit/(Loss) for the year Other Comprehensive Income/(Expense) for the year Total Comprehensive Income/(Expense) for the year Dividends received during the year The above profit/(loss) for the year include the following: Depreciation and Amortisation Interest Income Interest Expense Income-tax Expense As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 4,752.12 4,592.79 (2,163.40) (6,300.88) 880.63 461.55 (2,292.92) (1,070.16) 2,281.01 8,876.94 (1,629.22) (4,452.88) 5,075.85 284.90 (1,676.67) (46.09) For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019 ₹ crore 24,628.04 1,205.85 11.75 1,217.60 1,678.78 1,369.55 56.20 69.99 1,212.38 25,997.34 2,461.62 (4.97) 2,456.65 Nil 972.14 121.91 22.26 2,271.48 Reconciliation of the above summarised financial information to the carrying amount of the interest in PT Kaltim Prima Coal recognised in the consolidated Ind AS financial statements: Net Assets of PT Kaltim Prima Coal Proportion of the Group's ownership interest in PT Kaltim Prima Coal carried forward ........................... 372 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 880.63 30.00% 264.19 264.19 5,075.85 30.00% 1,522.76 1,522.76 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 6 a. Investments accounted for using the Equity Method (Contd.) brought forward ........................... Goodwill Carrying amount of the Group's interest in PT Kaltim Prima Coal Impairment of Goodwill Carrying amount of the Group's interest in PT Kaltim Prima Coal (net of impairment) B Indocoal Resources (Cayman) Ltd. Summarised Balance Sheet Non-current Assets Current Assets Non-current Liabilities Current Liabilities Net Assets The above amounts of assets and liabilities include the following: Cash and Cash Equivalents Current Financial Liabilities (excluding trade payables and provisions) Non-current Financial Liabilities (excluding trade payables and provisions) Summarised Statement of Profit and Loss Revenue Profit/(Loss) for the year Other Comprehensive Income/(Expense) for the year Total Comprehensive Income/(Expense) for the year Dividends received during the year The above profit/(loss) for the year include the following: Depreciation and Amortisation Interest Income Interest Expense Income-tax Expense As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 264.19 4,093.02 4,357.21 (529.32) 3,827.89 1,522.76 3,748.01 5,270.77 (484.79) 4,785.98 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 1,151.62 2,740.87 Nil (1,292.63) 2,599.86 3,634.66 69.01 Nil (1,375.16) 2,328.51 Nil Nil (1,256.25) (1,326.46) Nil Nil For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019 ₹ crore Nil 53.48 Nil 53.48 Nil Nil 34.76 Nil Nil Nil 17.16 Nil 17.16 Nil Nil 16.64 Nil Nil Reconciliation of the above summarised financial information to the carrying amount of the interest in Indocoal Resources (Cayman) Ltd. recognised in the consolidated Ind AS financial statements: Net Assets of Indocoal Resources (Cayman) Ltd. Proportion of the Group's ownership interest in Indocoal Resources (Cayman) Ltd. Goodwill Carrying amount of the Group's interest in Indocoal Resources (Cayman) Ltd. As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 2,599.86 30.00% 779.96 3,014.35 3,794.31 2,328.51 30.00% 698.55 2,759.72 3,458.27 373 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 6 a. Investments accounted for using the Equity Method (Contd.) C PT Nusa Tambang Pratama Summarised Balance Sheet Non-current Assets Current Assets Non-current Liabilities Current Liabilities Net Assets The above amounts of assets and liabilities include the following: Cash and Cash Equivalents Current Financial Liabilities (excluding trade payables and provisions) Non-current Financial Liabilities (excluding trade payables and provisions) Summarised Statement of Profit and Loss Revenue Profit/(Loss) for the year Other Comprehensive Income/(Expenses) for the year Total Comprehensive Income/(Expenses) for the year Dividends received during the year The above profit/(loss) for the year include the following: Depreciation and Amortisation Interest Income Interest Expense Income-tax Expense As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 2,130.73 4,421.75 (145.49) (1,331.94) 5,075.05 211.14 (1,260.02) Nil 2,087.87 3,296.74 (120.09) (1,241.67) 4,022.85 260.31 (1,103.77) Nil For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019 ₹ crore 1,064.97 639.04 (0.01) 639.03 1,018.88 631.98 (0.02) 631.96 Nil Nil 140.54 79.47 62.47 212.74 138.59 68.02 61.43 217.47 Reconciliation of the above summarised financial information to the carrying amount of the interest in PT Nusa Tambang Pratama recognised in the consolidated Ind AS financial statements: Net Assets of PT Nusa Tambang Pratama Proportion of the Group's ownership interest in PT Nusa Tambang Pratama Carrying amount of the Group's interest in PT Nusa Tambang Pratama D PT Baramulti Suksessarana TBK Summarised Balance Sheet Non-current Assets Current Assets Non-current Liabilities Current Liabilities Net Assets 374 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 5,075.05 30.00% 1,522.52 4,022.85 30.00% 1,205.90 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 1,314.57 593.23 (104.66) (435.83) 1,367.31 1,099.66 538.29 (128.28) (455.16) 1,054.51 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 6 a. Investments accounted for using the Equity Method (Contd.) The above amounts of assets and liabilities include the following: Cash and Cash Equivalents Current Financial Liabilities (excluding trade payables and provisions) Non-current Financial Liabilities (excluding trade payables and provisions) Summarised Statement of Profit and Loss Revenue Profit/(Loss) for the year Other Comprehensive Income/(Expense) for the year Total Comprehensive Income/(Expense) for the year Dividends received during the year The above profit/(loss) for the year include the following: Depreciation and amortisation Interest Income Interest Expense Income-tax Expense 250.22 (50.90) (61.38) 35.95 (49.68) (90.77) For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019 ₹ crore 2,935.80 277.02 (3.92) 273.10 18.43 125.46 1.87 8.02 93.54 3,169.25 353.62 1.71 355.33 125.39 109.93 3.83 6.12 127.32 Reconciliation of the above summarised financial information to the carrying amount of the interest in PT Baramulti Suksessarana TBK recognised in the consolidated Ind AS financial statements: Net Assets of PT Baramulti Suksessarana TBK Proportion of the Group's ownership interest in PT Baramulti Suksessarana TBK Goodwill Carrying amount of the Group's interest in PT Baramulti Suksessarana TBK Impairment of Goodwill Carrying amount of the Group's interest in PT Baramulti Suksessarana TBK (net of impairment) E Industrial Energy Ltd. Summarised Balance Sheet Non-current Assets Current Assets Non-current Liabilities Current Liabilities Net Assets The above amounts of assets and liabilities include the following: Cash and Cash Equivalents Current Financial Liabilities (excluding trade payables and provisions) Non-current Financial Liabilities (excluding trade payables and provisions) As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 1,367.31 26.00% 355.50 991.24 1,346.74 (279.51) 1,054.51 26.00% 274.17 907.59 1,181.76 (255.90) 1,067.23 925.86 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 1,635.15 265.75 (788.44) (277.94) 834.52 3.83 (248.83) (575.53) 1,433.23 305.72 (762.74) (209.55) 766.66 48.46 (184.52) (522.00) 375 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 6 a. Investments accounted for using the Equity Method (Contd.) Summarised Statement of Profit and Loss Revenue Profit/(Loss) for the year Other Comprehensive Income/(Expense) for the year Total Comprehensive Income/(Expense) for the year Dividends received from Industrial Energy Ltd. during the year The above profit/(loss) for the year include the following: Depreciation and Amortisation Interest Income Interest Expense Income-tax Expense For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019 ₹ crore 301.29 148.52 (0.37) 148.15 49.28 Nil 0.56 53.84 (3.82) 300.40 111.13 (0.25) 110.88 59.14 Nil 0.98 64.69 50.97 Reconciliation of the above summarised financial information to the carrying amount of the interest in Industrial Energy Ltd. recognised in the consolidated Ind AS financial statements: Net Assets of Industrial Energy Ltd. Proportion of the Group's ownership interest in Industrial Energy Ltd. Carrying amount of the Group's interest in Industrial Energy Ltd. As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 834.52 74.00% 617.54 766.66 74.00% 567.31 VI Details and Financial Information of Individually not Material Joint Ventures at the end of the reporting period is as follows: Name of Joint Venture Principal Activity Country of Incorporation and Principal Place of Business Proportion of Ownership Interest / Voting Rights held by the Group As at 31st March, 2020 As at 31st March, 2019 PT Indocoal Kaltim Resources # Infrastructure Support for Coal Business Indonesia Candice Investments Pte. Ltd.# Investments Singapore PT Marvel Capital Indonesia # Infrastructure Support for Coal Business Indonesia PT Dwikarya Prima Abadi # PT Kalimantan Prima Power Infrastructure Support for Coal Business Indonesia Electricity Support Services Indonesia Indocoal KPC Resources (Cayman) Ltd. # Coal Trading Adjaristsqali Netherlands BV Hydro power generation Khoromkheti Netherlands BV # Hydro power generation Cennergi Pty. Ltd. $ Wind power generation Resurgent Power Ventures Pte Ltd. Investments and Services Powerlinks Transmission Ltd. Power Transmission Dugar Hydro Power Ltd. Tubed Coal Mines Ltd. # Hydro power generation Coal mining and trading Mandakini Coal Company Ltd. # Coal mining and trading Cayman Island Netherlands Netherlands South Africa Singapore India India India India $ Sold during the year # Based on Unaudited Financial Information, certified by its Management for the year ended 31st March, 2020. 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 40.00% 40.00% 0.00% 26.00% 51.00% 50.00% 40.00% 33.33% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 40.00% 40.00% 50.00% 26.00% 51.00% 50.00% 40.00% 33.33% 376 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 6 a. Investments accounted for using the Equity Method (Contd.) Aggregate Summarised Financial Information of Joint Ventures that are not individually material The Group's share of profit/(loss) from continuing operations (Refer Note below) The Group's share of Other Comprehensive Income/(Expense) The Group's share of Total Comprehensive Income/(Expense) Aggregate carrying amount of the Group's interests in these Joint Ventures Impairment of Investments Carrying amount of the Group's interest in these Joint Ventures The unrecognised share of profit of Joint Ventures for the year Note: * Denotes figures below ₹ 50,000/-. For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019 ₹ crore 62.17 Nil 62.17 128.65 Nil 128.65 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 1,864.77 (221.86) 1,642.91 1,408.19 (458.88) 949.31 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore * * 6b. (i) (a) The Group had in accordance with Ind AS 36 - “Impairment of Assets”, carried out impairment assessment of its Mundra Ultra Mega Power Project (UMPP), shipping assets along with investments in Indonesian mining companies PT Kaltim Prima Coal (KPC) and PT Baramulti Suksessarana TBK (BSSR). All these Companies constitute a single cash generating unit (Mundra CGU). The Group has performed the impairment reassessment and determined the value in use based on estimated cash flow projections over the life of the assets included in CGU. The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Group’s CGUs to which the individual assets are allocated. For Mundra power plant, future cash flows is estimated based on remaining period of long term power purchase agreement (PPA) and thereafter based on management’s estimate on tariff and other assumptions. Cash flow projection of Mines is derived based on estimated coal production considering the renewal of license for operating the Mines. Upto the previous year, the Group has recognised net impairment of ₹ 1,119.77 crore against carrying value of Mundra CGU which consists of impairment of investment of ₹ 808.83 crore, impairment of property, plant and equipment ₹ 308.18 crore and impairment of intangible assets ₹ 2.76 crore. During the year, the Group has performed the impairment reassessment and determined the value in use based on estimated cash flow projections over the life of the assets included in Mundra CGU. A reassessment of the assumptions used in estimating the impact of impairment, combined with the significant impact of unwinding of a year’s discount on the cash flows, would have resulted in a reversal of ₹ 1,119.77 crore of provision for impairment. Considering the significant uncertainties arising from ongoing renegotiation of the Mundra Power Purchase Agreement (PPA), as recommended by the High Powered Committee (HPC) and the pending renewal of the mining license in Indonesian coal mines, the Group has not effected such a reversal. The reversal of impairment has not resulted from any significant improvement in the estimated service potential of the concerned CGU. Key assumptions used for value in use calculation include coal prices, energy prices post the PPA period, discount rates and exchange rates. Short term coal prices and energy prices used in three to five years projections are based on market survey and expert analysis report. Afterwards increase in cost of coal and exchange rates are considered based on long term historical trend. Further, the Management strongly believes that mine licenses will be renewed post expiry. Discount rate represents the current market assessment of the risk specific to CGU taking into consideration the time value of money. Pre tax discount rate used in the calculation of value in use of investment in power plant is 10.87% p.a. (31st March 2019: 10.61% p.a.) and investment in coal mines and related infrastructure companies is 12.68% p.a. (31st March 2019: 11.06% p.a.). 377 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 6 b. Investments accounted for using the Equity Method (Contd.) (b) The Group holds investments in Adjaristsqali Netherlands B.V. (ABV) (a Joint Venture of the Group) operating 187 MW hydro power plant in Georgia. In the past, the Group, in accordance with Ind AS 36 – “Impairment of Assets” had recognized impairment provision on investment of ₹ 459.06 crore and financial guarantee obligation of ₹ 103.74 crore. Pursuant to debt restructuring of ABV, execution of long-term power purchase agreement (PPA) with Government of Georgia, receipt of insurance claims and start of commercial operations during the year ended 31st March 2020, the Group performed the recoverability assessment and recognised the reversal of impairment of ₹ 235.00 crore comprising of reversal of ₹ 103.74 crore towards financial guarantee obligation and reversal of ₹ 131.26 crore towards its investment in ABV which has been disclosed as an exceptional item in the statement of profit and loss. The Group has performed the recoverability assessment and determined the value in use based on estimated cash flow projections over the life of the assets included in CGU and grouped under Renewable Power Segment. Projected cash flows include cash flow projections approved by management covering 3 to 5 years period and the cash flows beyond that has been projected based on the long -term forecast. The following key assumptions were used for performing the valuation: - Tariff post PPA period of 15 years; - Pre-tax discount rate of 6.64 %. (ii) During the previous year, the Group sold investments in Tata Communications Limited and Panatone Finvest Limited (Associate Companies) and recognised a gain of ₹ 1,897.24 crore which had been disclosed as an exceptional income in the consolidated Ind AS statement of profit and loss. Further, during the previous year , the Group had also sold its investment in equity shares of Tata Teleservices Limited and recognised a gain of ₹ 0.01 crore after reduction in fair value amounting to ₹ 1,438.42 crore recognised in earlier years. (iii) During the year ended 31st March, 2020, the Group has sold its investments in Cennergi Pty. Ltd. (a joint venture company of the Group) and recognised a gain on sale of investments amounting to ₹ 532.51 crore. Further, the Group has hedged its receivable against consideration to be received, fair value gain on hedge instrument of ₹ 105.09 crore has been recognised in other income. (iv) During the year, the Group has reassessed its plan to sale investment in Tata Projects Limited (Associate company of the Group) and has reclassified its investment in Tata Projects from Asset held for sale to Investments in Associate accounted under equity method. (Refer Note 44) (v) During the year ended 31st March, 2020, Resurgent Power Ventures Pte Limited (‘Resurgent’), a joint venture of the Group has acquired 77% stake (on a fully diluted basis) in Prayagraj Power Generation Company Limited (‘PPGCL’) at an enterprise valuation of ₹ 7,035 crore. PPGCL owns and operates 1,980 MW thermal power station located in the state of Uttar Pradesh. The acquisition has been recognised by Resurgent based on fair values that has been determined provisional basis in accordance with Ind AS 103 - ‘Business Combination’. (vi) The Group holds investment in Nelito Systems Ltd. (Nelito), an Associate company. During the year ended 31st March, 2017, the Group had sold part of the investment at ₹ 185/- per share and decided to sell its entire share holding. Accordingly, balance investment of ₹ 12.93 crore at 31st March, 2019 has been classified and disclosed as Assets classified as held for sale. During the previous year, the Group had received offer to sell at ₹ 240/- per share and therefore the provision for investments amounting to ₹ 2.48 crore has been reversed in 31st March, 2019. During the year ended 31st March, 2020, the Group has sold the investments and recognised gain of ₹ 0.92 crore. 378 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 6 c. Other Investments As at 31st March, 2020 Quantity As at 31st March, 2019 Quantity Face Value (in ₹ unless stated otherwise) As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore I Investments designated at Fair Value through Other Comprehensive Income (a) Investment in Equity Shares fully Paid-up Quoted Voltas Ltd. Tata Consultancy Services Ltd. Tata Motors Ltd. Tata Motors Ltd. - Differential Voting Rights Tata Investment Corporation Ltd. 2,33,420 766 3,57,159 51,022 7,94,416 2,33,420 766 3,57,159 51,022 7,94,416 (b) Investment in Equity Shares fully Paid-up Unquoted Tata Industries Ltd. * Tata Sons Pvt. Ltd. * Haldia Petrochemicals Ltd. Tata International Ltd . * Tata Capital Ltd 68,28,669 6,673 2,24,99,999 24,000 23,33,070 68,28,669 6,673 2,24,99,999 24,000 23,33,070 1 1 10 10 2 100 1,000 10 1,000 10 11.13 0.14 2.53 0.16 50.12 64.08 115.47 194.70 56.48 18.77 12.29 397.71 461.79 14.62 0.15 6.23 0.44 66.52 87.96 115.47 194.70 56.48 18.77 12.29 397.71 485.67 Sub-total I (a) + I (b) II Investments carried at Fair Value through Profit or Loss (a) Investment in Equity Shares fully Paid-up Quoted Geodynamics Ltd (b) Investment in Equity Shares fully Paid-up Unquoted Zoroastrian Co-operative Bank Ltd. Sub-total II (a) + II (b) III Investments carried at Amortised Cost (a) Government Securities (Unquoted) fully Paid-up (b) Statutory Investments (i) Contingencies Reserve Fund Investments Government Securities (Unquoted) fully paid-up (ii) Deferred Taxation Liability Fund Investments Government Securities (Unquoted) fully paid-up Sub-total III (a) + III (b) Total 2,94,00,000 2,94,00,000 AUD 1.50 2.86 1.18 6,000 6,000 25 0.16 3.02 0.16 1.34 40.00 Nil 127.87 136.65 Nil 237.75 167.87 374.40 632.68 861.41 379 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 6 c. Other Investments (Contd.) Notes: 1. Aggregate Market Value of Quoted Investments 2. Aggregate Carrying Value of Quoted Investments 3. Aggregate Carrying Value of Unquoted Investments 4. 66.94 66.94 565.74 89.14 89.14 772.27 Investments at Fair Value Through Other Comprehensive Income (FVTOCI) reflect investment in quoted and unquoted equity securities. These equity shares are designated as FVTOCI as they are not held for trading purpose and are not in similar line of business as the Company, thus disclosing their fair value change in profit and loss will not reflect the purpose of holding. * The cost of these investments approximate their fair value because there is a wide range of possible fair value measurements and the cost represents the best estimate of fair value within that range. 7. Trade Receivables (Unsecured unless otherwise stated) Non-current Considered Good - Unsecured (Refer Note 37e.) Credit Impaired Less: Allowance for Doubtful Trade Receivables Current Considered Good - Secured (Refer Note below) Considered Good - Unsecured (Refer Note Below 1, 2 & 3) Credit Impaired Less: Allowance for Doubtful Trade Receivables Total As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 30.28 4.55 34.83 4.55 30.28 515.48 3,923.04 420.89 4,859.41 433.51 4,425.90 192.99 4.55 197.54 4.55 192.99 291.07 4,173.65 372.01 4,836.73 391.47 4,445.26 Note: The Group holds security deposits and Letter of Credit of ₹ 515.48 crore (31st March, 2019 - ₹ 291.07 crore). 7.1 Trade Receivables The Group has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The expected credit loss allowance is not calculated on non current trade receivable on account of dispute. The provision matrix takes into account historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix. The provision matrix at the end of the reporting period is as follows: *Expected Credit Loss (%) As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 0.13% 1.79% 0.59% 13.11% 0.36% 0.48% 0.94% 15.86% Ageing of Receivables Within the credit period 1-90 days past due 91-182 days past due More than 182 days past due * Excludes Special allowance 380 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 7. Trade Receivables (Contd.) (Unsecured unless otherwise stated) Age of receivables Within the credit period 1-90 days past due 91-182 days past due More than 182 days past due Movement in the allowance for doubtful trade receivables Balance at the beginning of the year Add: Expected credit loss allowance on trade receivables calculated at lifetime expected credit losses for the year Add/(Less): Special allowance on trade receivables for the year Less: Transferred to Assets Classified as Held For Sale (Refer Note 17 c) Balance at the end of the year As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 1,785.39 1,050.25 414.54 1,644.06 2,401.08 1,165.39 416.25 1,051.55 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 396.02 329.47 54.07 (12.03) Nil 438.06 53.09 25.00 (11.54) 396.02 The concentration of credit risk is very limited due to the fact that the large customers are mainly Government entities and remaining customers base is large and widely dispersed and secured with security deposit. Note: 1 Trade receivables include receivables amounting to ₹ 299.79 crore (31st March 2019: Nil) and ₹ 86.03 crore (31st March 2019: Nil) from Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) and Jaipur Vidyut Vitran Nigam Limited, respectively, which are subject to a ‘bill discounting arrangement’. Under this arrangement, the Group has transferred the relevant receivables to the banks in exchange of cash and is prevented from selling or pledging the receivables. The cost of bill discounting is to the customer's account. However, the Group has retained late payment and credit risk. The Group therefore continues to recognise the transferred assets in their entirety in its financial statements. The amount repayable under the bills discounting arrangement is presented as unsecured / secured borrowing having recourse to the Group and interest liability on amount of bill discounted is borne by the customer. The maturity period of the transfer is 6 to 9 months from the date of discounting. The maturity of bills discounted is starting from 20th June, 2020. 2 a) The Group supply solar power to TANGEDCO against long term Power Purchase Agreements (PPAs). As per the said PPAs, the Group is entitled to receive consideration for all energy units supplied and billed. However, whilst effecting payments to the Group, TANGEDCO has disputed and is not making payment for energy units supplied and billed in excess of 19% Capacity Utilisation Factor (CUF) in accordance with its internal circular. The National Solar Energy Federation of India (NSEFI) has filed the writ petition with Madras High Court challenging the said circular issued by TANGEDCO on behalf of generators who have commissioned solar power plants and impacted by the said circular. The Tata Power Company Limited, ultimate holding company of the group, is also a Member of NSEFI. The said petition has been admitted. On the basis of an independent legal opinion and the latest Tamil Nadu Electricity Regulatory Commission (TNERC) order issued on 25th March 2019 on backing down / curtailment instruction to solar power plants, the Group is confident that said circular issued by TANGEDCO is unilateral action and not tenable legally. Hence, the Group considers that it is highly probable that the consideration for energy units supplied in excess of 19% CUF would be realized. 381 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 7. Trade Receivables (Contd.) (Unsecured unless otherwise stated) Accordingly, the Group has a trade receivable balance of ₹ 80.11 crore (including ₹ 32.27 crore relating to current period) for such excess units as on 31st March, 2020. Considering signed PPA and its independent legal evaluation, the Group believes that these amounts are fully recoverable and no provision has been recognized in the consolidated Ind AS financial statements. b) Trade Receivables include ₹ 669.38 crore receivable from TANGEDCO (including ₹ 312.64 crore relating to current period, ₹ 299.79 crore relating to bill discounting with recourse till date (refer note 1 above) and ₹ 80.11 crore pertaining to CUF adjustment as mentioned above). The Group is of the view that these receivables are fully recoverable. In accordance with the PPAs, the Group is entitled to receive interest on delayed payment, however it is recognized, on prudence grounds, only when recovered. The Group is of the view that there is no credit loss or loss due to time value of money as TANGEDCO is a State Electricity Distribution Company and the outstanding amounts would be recovered along with the interest in terms of the relevant PPA. Hence, no provision for Expected Credit Loss in accordance with Ind AS 109 has been recognized in the consolidated Ind AS financial statements. 3 In the year 2016, the Group entered into long-term Power Purchase Agreements (“PPAs”) with the Southern Power Distribution Company of Andhra Pradesh Limited (“APDISCOM”) to supply power from its two solar plants with cumulative capacity of 100 MWs (Solar energy projects) at ₹ 5.99 per unit (with escalation @ 3% p.a. from year 2 to 10). The Government of Andhra Pradesh (the “GoAP”) issued an order (the “GO”) dated 1st July, 2019 constituting a High Level Negotiation Committee (the “HLNC”) for review and negotiation of tariff for wind and solar projects in the state of Andhra Pradesh. Pursuant to the GO, APDISCOM issued letters dated 12th July, 2019 to the Group requesting for revision of tariffs previously agreed as per the PPAs to ₹ 2.44 per unit. Since the Group and other power producers did not agree to the rate revision, APDISCOM referred the matter to the Andhra Pradesh Electricity Regulatory Commission (the “APERC”) for revision of tariffs. The Group had filed a writ petition on 30th July, 2019 before the Andhra Pradesh High Court (“AP High Court”) challenging the GO and the said letters issued by APDISCOM for renegotiation of tariffs. The AP High Court has issued its order dated 24th September, 2019 whereby it allowed the writ petition. The AP High court also instructed APDISCOM to honour pending and future bills but to pay them at a rate of ₹ 2.44 per unit (as against the billed rate). The AP High Court also stated that this rate is only an interim measure until the matter is resolved by the APERC and suggested the APERC to conclude this matter within 6 months period. During the year ended 31st March, 2020, the Group has received an amount of ₹ 58.90 crore from APDISCOM at the interim rate of ₹ 2.44 per unit as against PPA rates stated above. The Group has a net block of ₹ 632.60 crore and has recognised a revenue of ₹ 97.71 crore for the year ended 31st March, 2020 and has a trade receivable balance of ₹ 128.44 crore as on 31st March, 2020 from sale of electricity against such PPAs. Considering signed PPA, interim order passed by the AP High Court, and its internal legal evaluation, the management believes that final order would be in its favour and hence no adjustment has been made in the consolidated Ind AS financial statements. 382 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 8. Loans - At Amortised Cost (Unsecured unless otherwise stated) Non-current (i) Security Deposits Considered Good Credit Impaired Less: Provision for Doubtful Security Deposits (ii) Loans to Related Parties (Refer Note 39) Considered Good* Credit Impaired Less: Allowance for Doubtful Loans (iii) Other Loans Loans to Employees Considered Good Total Current (i) Security Deposits Considered Good Credit Impaired Less: Allowances for Doubtful Security Deposits (ii) Loans to Related Parties (Refer Note 39) Considered Good* Credit Impaired Less: Allowance for Doubtful Loans (iii) Other Loans Loans to Employees Considered Good Total * Reclassified as Held for Sale. (Refer Note 17a.) As at 31st March, 2020 As at 31st March, 2019 ₹ crore ₹ crore 75.01 30.61 105.62 30.61 75.01 Nil 55.66 55.66 55.66 Nil 5.87 80.88 30.70 4.78 35.48 4.78 30.70 1.99 30.89 32.88 30.89 1.99 0.31 33.00 84.32 27.87 112.19 27.87 84.32 Nil 55.53 55.53 55.53 Nil 6.24 90.56 17.32 5.77 23.09 5.77 17.32 69.43 29.28 98.71 29.28 69.43 0.43 87.18 9. Finance Lease Receivable - At Amortised Cost (Unsecured unless otherwise stated) Accounting Policy Leases are classified as finance lease whenever the terms of the lease transfer substantially all the risks and rewards incidental to ownership to the lessee. All other leases are classified as operating lease. Amount due from lessees under finance leases are recorded as receivables at the Group's net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease. The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease term. 383 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 9. Finance Lease Receivable - At Amortised Cost (Contd.) (Unsecured unless otherwise stated) Finance Lease Receivable - Non-current Finance Lease Receivable - Current Total 9.1 Leasing Arrangements As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 588.92 33.20 622.12 565.62 37.90 603.52 (i) The Group has entered into Power Purchase Agreements (PPA) with a customer for its assets located at Jojobera. The assets relate to 30 years of take or pay agreements with the customer to supply electricity at a fixed plus variable charge. The customer, during the term of the PPAs has a right to purchase the assets and at the end of the contract is obligated to purchase same on the basis of the valuation to be determined as per the PPAs. The Group has recognised an amount of ₹ 88.91 crore (31st March, 2019 ₹ 86.70 crore) as income for finance lease during the year ended 31st March, 2020. (ii) The Group has entered into Power Purchase Agreements (PPA) with various customers for its rooftop solar assets located across various locations. As this arrangement is dependent on the use of a specific asset and conveys a right to use on the customer, it qualifies as a lease. As these are long tenor PPAs spread over a major part of the economic life of the asset, this arrangement has been categorized as a finance lease. The Group has recognised an amount of ₹ 2.64 crore (31st March, 2019 ₹ 0.56 crore) as income for finance lease during the year ended 31st March, 2020. 9.2 Amount receivable under Finance Lease Particulars Less than a year One to two years Two to three years Three to four years Four to five years Total (A) More than five years (B) Total (A+B) Unearned finance income Present Value of Minimum Lease Payments Receivable Minimum Lease Payments As at 31st March, 2020 Minimum Lease Payments As at 31st March, 2019 ₹ crore 117.66 114.26 113.24 112.13 111.10 568.39 680.20 1,248.59 626.47 622.12 110.26 107.57 106.85 106.00 105.04 535.72 735.84 1,271.56 668.04 603.52 Lessor - Operating Lease The Group has entered into operating leases for its certain building, plant and machinery and other equipments. These typically have lease terms of between 1 and 10 years. The Group has recognized an amount of ₹ 10.81 crore (31st March, 2019 - ₹ 15.51 crore) as rental income for operating lease during the year ended 31st March, 2020. 384 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 10. Other Financial Assets - At Amortised Cost, unless otherwise stated Non-current (i) Receivables under Service Concession Agreement (ii) Unbilled Revenue (iii) Others Unsecured, considered good Advance towards Equity (Refer Note 1 below) Government Grants Receivables (Refer Note 2 below) In Deposit Accounts (with maturity more than twelve months) Other Advances Total As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 199.48 200.61 95.33 81.11 181.78 22.32 36.38 43.50 283.98 578.79 2.85 29.17 2.99 0.02 35.03 316.75 Notes: 1. Odisha Electricity Regulatory Commission (OERC) had issued a request for proposal (RFP) for sale of controlling interest in distribution business of Central Electricity Supply Utility of Orissa. The Group had bid for it and has been identified as the successful bidder. As per the requirement of RFP, the Group has deposited ₹ 178.50 crore with OERC. Pending vesting order for the completion of sale, the amount deposited is disclosed as non-current financial assets and will be converted to equity after passing of the vesting order by OERC. 2. One of the subsidiary of the Group is eligible for government grant for certain solar projects. The subsidiary company is in the process of creating charge on project assets in favour of Solar Energy Corporation of India. Once the charge is created, the subsidiary company will file application for release of the grant. As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore Current (i) Accruals Unsecured, considered good Interest Accrued on Inter-corporate/Bank Deposits Interest Accrued on Investments Interest Accrued on Finance Lease Receivable Interest Accrued on Loans to Related Parties Unsecured, considered doubtful Interest Accrued on Inter-corporate/Bank Deposits Less: Provision for Doubtful Interest (ii) Receivables under Service Concession Agreement (iii) Others Unsecured, considered good Dividend Receivable Derivative Contract (Fair Value through Profit and Loss) Receivable on sale of Current Investments Receivable on sale of Property, Plant & Equipment Insurance Claims Receivable Government Grants Receivables Recoverable from consumers Other Advances carried forward .......................... 4.91 3.51 6.85 2.64 1.40 19.31 1.40 17.91 2.88 Nil 301.64 736.76 2.64 0.10 30.40 232.17 87.93 1,391.64 2.52 6.69 6.96 2.40 1.40 19.97 1.40 18.57 2.64 16.71 24.76 39.73 2.05 3.52 58.05 Nil 75.56 220.38 385 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 10. Other Financial Assets - At Amortised Cost, unless otherwise stated (Contd.) brought forward .......................... Unsecured, considered doubtful Other Advances Less: Allowances for Doubtful Advances Total 11. Tax Assets Non-current Tax Assets Advance Income-tax (Net) Total Current Tax Assets Advance Income-tax (Net) Total 12. Deferred Tax As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 1,391.64 220.38 2.63 1,394.27 (2.63) 1,391.64 2.70 223.08 (2.70) 220.38 1,412.43 241.59 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 342.00 342.00 1.10 1.10 238.01 238.01 2.67 2.67 Accounting Policy Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated Ind AS financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. For operations carried out under tax holiday period (80IA benefits of Income Tax Act, 1961), deferred tax assets or liabilities, if any, have been established for the tax consequences of those temporary differences between the carrying values of assets and liabilities and their respective tax bases that reverse after the tax holiday ends. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis. Deferred tax relating to items recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. 386 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 12. Deferred Tax (Contd.) Deferred tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognised as deferred tax asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised. The Group reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period. In the situations where one or more units of the Group are entitled to a tax holiday under the tax law, no deferred tax (asset or liability) is recognised in respect of temporary differences which reverse during the tax holiday period, to the extent the concerned unit’s gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of temporary differences which reverse after the tax holiday period is recognised in the year in which the temporary differences originate. However, the Company restricts recognition of deferred tax assets to the extent it is probable that sufficient future taxable income will be available against which such deferred tax assets can be realized. For recognition of deferred taxes, the temporary differences which originate first are considered to reverse first. Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. 12 a. Deferred Tax Assets Deferred Tax Assets Deferred Tax Liabilities Total - Net Deferred Tax Assets 2019 - 20 Deferred Tax Assets in relation to: Allowance for Doubtful Debts, Deposits and Advances Provision for Employee Benefits, Entry Tax and Others Unabsorbed Depreciation Measuring of Derivative Financial Instruments at Fair Value Carry Forward Losses Deferred Revenue- Ind AS 115 MAT Credit Entitlement Lease Liability Others Deferred Tax Liabilities in relation to: Property, Plant and Equipment* Others As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 4,432.60 4,358.36 74.24 3,669.65 3,580.16 89.49 Opening Balance Recognised in Profit or Loss Recognised in Other Comprehensive Income ₹ crore Closing Balance 49.52 9.27 3,172.93 26.63 156.10 148.14 105.14 Nil 1.92 3,669.65 3,575.55 4.61 3,580.16 (7.83) 0.70 0.76 (26.48) (79.29) 36.42 (28.38) 859.92 5.00 760.82 747.25 30.95 778.20 Nil Nil Nil Nil 2.13 Nil Nil Nil Nil 41.69 9.97 3,173.69 0.15 78.94 184.56 76.76 859.92 6.92 2.13 4,432.60 Nil Nil Nil 4,322.80 35.56 4,358.36 Net Deferred Tax Assets 89.49 (17.38) 2.13 74.24 * including Right of Use and Intangible Assets 387 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 12. Deferred Tax (Contd.) 2018-19 Deferred Tax Assets in relation to: Allowance for Doubtful Debts, Deposits and Advances Provision for Employee Benefits, Entry Tax and Others Unabsorbed Depreciation Measuring of Derivative Financial Instruments at Fair Value Carry Forward Losses MAT Credit Entitlement Deferred Revenue- Ind AS 115 Others Deferred Tax Liabilities in relation to: Property, Plant and Equipment* Others Net Deferred Tax Assets * including Intangible Assets 12 b. Deferred Tax Liabilities Deferred Tax Assets Deferred Tax Liabilities Total - Net Deferred Tax Liabilities 2019 - 20 Deferred tax assets in relation to Allowance for Doubtful Debts, Deposits and Advances Provision for Employee Benefits, Entry Tax and Others Unabsorbed Depreciation Carry Forward Business Losses Carry Forward Capital Loss MAT Credit Entitlement Government Grant Deferred Revenue -Ind AS 115 Lease Liability Others 388 Opening Balance Recognised in Profit or Loss Recognised in Other Comprehensive Income ₹ crore Closing Balance 53.09 10.98 3,481.33 149.07 195.47 101.73 132.52 Nil (3.57) (1.71) (308.40) (122.44) (39.37) 3.41 15.62 1.92 4,124.19 (454.54) 3,986.75 19.27 4,006.02 (411.20) (14.66) (425.86) 118.17 (28.68) Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil 49.52 9.27 3,172.93 26.63 156.10 105.14 148.14 1.92 3,669.65 3,575.55 4.61 3,580.16 89.49 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 1,838.55 3,012.59 1,174.04 2,025.06 3,081.87 1,056.81 Opening Balance Recognised in Profit or Loss Recognised in Other Comprehensive Income ₹ crore Closing Balance 58.47 73.79 142.17 Nil 343.62 1364.42 2.19 30.90 Nil 9.50 0.83 0.36 (72.53) 77.92 (45.65) (190.69) (1.24) (1.89) 12.40 15.52 Nil 18.46 Nil Nil Nil Nil Nil Nil Nil Nil 59.30 92.61 69.64 77.92 297.97 1,173.73 0.95 29.01 12.40 25.02 2,025.06 (204.97) 18.46 1,838.55 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 12. Deferred Tax (Contd.) 2019 - 20 Deferred tax liabilities in relation to Property, Plant and Equipments* Investments at Fair Value Distribution on Perpetual Bonds Borrowings Deferred Revenue -Ind AS 115 Revaluation on Consolidation Derivative financial instruments designated for hedging Undistributed Profits of Joint Ventures Others Opening Balance Recognised in Profit or Loss Recognised in Other Comprehensive Income ₹ crore Closing Balance 2824.46 0.38 24.90 9.66 18.07 202.69 Nil Nil 1.71 3,081.87 (86.50) (0.38) (24.90) (0.27) 5.93 (95.02) Nil 92.90 (0.33) (108.57) Nil Nil Nil Nil Nil Nil 32.43 7.09 (0.23) 39.29 2,737.96 Nil Nil 9.39 24.00 107.67 32.43 99.99 1.15 3,012.59 Net Deferred Tax Liabilities 1,056.81 96.40 20.83 1,174.04 * including Finance lease receivables, Right of Use and Intangible Assets 2018 - 19 Deferred tax assets in relation to Allowance for Doubtful Debts, Deposits and Advances Provision for Employee Benefits, Entry Tax and Others Unabsorbed Depreciation Carry Forward Losses On Asset Held For Sale MAT Credit Entitlement Government Grant Deferred Revenue -Ind AS 115 Others Deferred tax liabilities in relation to Property, Plant and Equipments* Investments at Fair Value Distribution on Perpetual Bonds Borrowings Deferred Revenue -Ind AS 115 Revaluation on Consolidation Others Opening Balance Recognised in Profit or Loss Recognised in Other Comprehensive Income ₹ crore Closing Balance 53.02 81.23 244.74 4.34 757.40 1241.62 17.73 Nil 1.95 5.45 (7.60) (102.57) (4.34) (413.78) 122.80 (15.54) 30.90 7.75 2,402.03 (376.93) 2,665.62 0.24 24.90 10.40 4.34 213.09 Nil 158.84 0.12 Nil (0.74) 13.73 (10.40) 1.71 Nil 0.16 Nil Nil Nil Nil Nil Nil (0.20) (0.04) Nil 0.02 Nil Nil Nil Nil Nil 58.47 73.79 142.17 Nil 343.62 1,364.42 2.19 30.90 9.50 2,025.06 2,824.46 0.38 24.90 9.66 18.07 202.69 1.71 2,918.59 163.26 0.02 3,081.87 Net Deferred Tax Liabilities 516.56 540.19 0.06 1,056.81 *including Finance lease receivables and Intangible Assets Notes: i. During the year, the Group has reassessed the recoverability of unrecognised MAT Credit and accordingly considering the uncertainty over the realisability, the Group has not recognised MAT Credit amounting to ₹ 189.53 crore (31st March, 2019 - 276.87 crore). 389 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 12. Deferred Tax (Contd.) ii. Considering the uncertainty over the realisibility, the Group has not recognised deferred tax asset to the extent of ₹ 376.57 crore (31st March, 2019 - ₹ 309.73 crore) on capital loss on sale of investments and indexation benefits on investments classified as asset held for sale. iii. Pursuant to the Taxation Laws (Amendment) Act, 2019 which is effective from 1st April, 2019, domestic companies have an option to pay income tax at 22% plus applicable surcharge and cess (‘new tax regime’) subject to certain conditions. Based on the Group's assessment of the expected year of transition to the new tax regime at each entity level where the new tax regime is applicable, the Group has remeasured the deferred tax liabilities and also reassessed the recoverability of Minimum Alternate Tax (‘MAT’) credit. Accordingly, the Group has recognized deferred tax income of ₹ 159.25 crore after adjusting the MAT credit write off. Further, the Group has also remeasured its regulatory asset balance against deferred tax liabilities and has recognized expense of ₹ 98.00 crore for distribution business and ₹ 167.00 crore for generation and transmission business. iv. Unrecognised deferred tax assets on tax losses / unused tax credit for which no deferred tax assets is recognised amount to ₹ 4,261.20 crore and ₹ 3,512.67 crore as at 31st March, 2020 and 31st March, 2019 respectively. The expiry of unrecognised Deferred Tax Asset is as detailed below: As at 31st March, 2020 Unrecognised deferred tax assets Business losses Unabsorbed depreciation MAT credit Capital Loss Total As at 31st March, 2019 Unrecognised deferred tax assets Business losses Unabsorbed depreciation MAT credit Capital Loss Total Within one year Greater than one year, less than five years 94.14 Nil Nil 2.19 96.33 553.87 Nil 3.99 Nil Greater than five years 819.69 Nil 185.55 360.27 No expiry date Nil 2,227.40 Nil 14.11 ₹ crore Closing balance 1,467.69 2,227.40 189.54 376.57 557.86 1,365.51 2,241.51 4,261.20 Within one year Greater than one year, less than five years 30.98 490.03 Nil Nil Nil Nil 8.01 Nil Greater than five years 532.54 Nil 268.86 309.73 No expiry date Nil 1,872.52 Nil Nil ₹ crore Closing balance 1,053.55 1,872.52 276.87 309.73 30.98 498.04 1,111.13 1,872.52 3,512.67 v. The Group has not recognised any deferred tax liabilities for taxes amounting to ₹ 2,382.71 crore (31st March, 2019 ₹ 1,549.25) crore that would be payable on the Group's share in undistributed earnings of its subsidiaries and its interest in joint ventures because the Group controls when the liability will be incurred and it is probable that the liability will not be incurred in the foreseeable future. 12 c. Reconciliation of Deferred Tax Expense amount recognised in Profit or Loss and Other Comprehensive Income Recognised in profit or loss Recognised in Other Comprehensive Income ₹ crore For the year ended 31st March, 2020 For the year ended 31st March,2019 For the year ended 31st March, 2020 For the year ended 31st March,2019 17.38 28.68 (2.13) Nil 96.40 540.19 20.83 0.06 Deferred Tax Assets (Net) - (Refer Note 12 a.) Net (increase)/decrease in Deferred Tax Assets Deferred Tax Liabilities (Net) - (Refer Note 12 b.) Net increase/(decrease) in Deferred Tax Liabilities Deferred Tax Liabilities (Net) - Discontinued Operations (Refer Note 17 c) Net increase/(decrease) in Deferred Tax Liabilities Deferred Tax Expense (Net) 146.19 562.93 18.70 390 32.41 (5.94) Nil Nil 0.06 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 13. Other Assets Non-current (i) Capital Advances Unsecured, considered good Doubtful Less: Allowance for Doubtful Advances (ii) Security Deposits Unsecured, considered good (iii) Balances with Government Authorities Unsecured, considered good Advances Amount Paid Under Protest VAT/Sales Tax Receivable (iv) Unamortised Premium for Leasehold Land (Refer Note 4b) Unsecured, considered good (v) Deferred Expense Unsecured, considered good (vi) Others Unsecured, considered good Prepaid Expenses Recoverable from Consumers Others Doubtful Less: Allowance for Doubtful Advances Total Current (i) Balances with Government Authorities Unsecured, considered good Advances VAT/Sales Tax Receivable (ii) Unamortised Premium for Leasehold Land (Refer Note 4b) Unsecured, considered good (iii) Other Loans and Advances Unsecured, considered good Prepaid Expenses Advances to Vendors Recoverable from Consumers Deferred Rent Expense Unbilled Revenue (contract assets) Power Banking Receivable Other Advances Others Doubtful Less: Allowance for Doubtful Advances Total As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 49.47 0.16 49.63 0.16 49.47 1.64 25.44 68.76 28.92 123.12 Nil 59.34 0.16 59.50 0.16 59.34 228.64 166.61 70.91 63.16 300.68 317.90 30.53 26.50 1.52 960.84 18.00 Nil 980.36 Nil 980.36 1,185.12 173.13 0.84 173.97 Nil 103.46 422.51 Nil 1.11 30.07 36.66 2.61 Nil 1.68 598.10 1.68 596.42 770.39 3.29 404.79 16.93 0.93 425.94 0.93 425.01 1,358.07 174.23 4.48 178.71 9.51 79.14 323.33 1,100.54 0.89 11.15 170.94 7.46 0.18 1.82 1,695.45 1.82 1,693.63 1,881.85 391 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 14. Inventories Accounting Policy Inventories are stated at the lower of cost and net realisable value. Cost of inventory includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Costs of inventories are determined on weighted average basis. Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity, but excluding borrowing costs. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Unserviceable/damaged stores and spares are identified and written down based on technical evaluation. Property acquired or being constructed for sale in the ordinary course of business, rather than to be held for rental or capital appreciation, is held as inventory property and is measured at the lower of cost and net realisable value (NRV). Principally, this is residential property that the Group develops and intends to sell before, or on completion of, development. Cost incurred in bringing each property to its present location and condition includes: - Freehold and leasehold rights for land - Amounts paid to contractors for development - Planning and design costs, costs of site preparation, professional fees for legal services, property transfer taxes, development overheads and other related costs NRV is the estimated selling price in the ordinary course of the business, based on market prices at the reporting date, less estimated costs of completion and the estimated costs necessary to make the sale. When an inventory property is sold, the carrying amount of the property is recognised as an expense in the period in which the related revenue is recognised. The carrying amount of inventory property recognised in profit or loss is determined with reference to the directly attributable costs incurred on the property sold and an allocation of any other related costs based on the relative size of the property sold. Inventories (a) Raw Materials and Fuel Fuel - Stores Fuel-in-Transit Others (b) Work-In-Progress (c) Finished goods (d) Stores and Spares Stores and Spare Parts (e) Loose Tools (f) Others Property under Development Total As at 31st March, 2020 ₹crore As at 31st March, 2019 ₹ crore 828.31 157.55 197.80 3.99 96.99 805.77 214.30 156.89 2.93 82.41 316.06 323.27 1.08 1.29 150.57 119.56 1,752.35 1,706.42 Notes: 1. The Group has recognised ₹ 19.32 crore (31st March, 2019 - ₹ 4.39 crore) as an expense for the write down of unserviceable stores and spares inventory. 2. Refer Note 21 for Inventories pledged as security for liabilities. 392 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 15. Current Investments I Investments carried at Amortised Cost Current Portion of Long-term Investments Statutory Investments Deferred Taxation Liability Fund Investments Government Securities (Unquoted) fully paid up II Investments carried at Fair Value through Profit and Loss Unquoted (a) Investment in Mutual Funds Total Notes: As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore Nil Nil 42.00 42.00 699.51 699.51 124.98 124.98 699.51 166.98 Aggregate Carrying Value of Unquoted Investments 699.51 166.98 16 a. Cash and Cash Equivalents Accounting Policy Cash and cash equivalent in the balance sheet comprise cash at banks, cash/cheques on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. Cash and cash equivalents include balances with banks which are unrestricted for withdrawal and usage. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash at bank, cash/cheques on hand and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group's cash management. As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore (a) Balances with Banks: (i) In Current Accounts (ii) In Deposit Accounts (with original maturity of less than three months) (b) Cheques on Hand (c) Cash on Hand Cash and Cash Equivalents as per Balance Sheet Bank Overdraft attributable to Continuing Operations (Refer Note 27) Cash and Cash Equivalents as per Statement of Cash Flows - Continuing Operation (a) Balances with Banks: (i) In Current Accounts (b) Book Overdraft (Refer Note 17c) Cash and Cash Equivalents as per Statement of Cash Flows - Discontinuing Operation Cash and cash Equivalent pertaining to Asset Classified as Held For Sale Cash and Cash Equivalents as per Statement of Cash Flows 935.27 919.77 6.44 0.02 1,861.50 (34.71) 1,826.79 7.62 (0.02) 7.60 Nil 1,834.39 320.87 311.90 11.69 0.99 645.45 (590.89) 54.56 6.13 (0.02) 6.11 0.85 61.52 393 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 16 a. Cash and Cash Equivalents (Contd.) Reconciliation of liabilities from Financing Activities Particulars Non-current Borrowings (including Current Maturity of Non-current Borrowings) Current Borrowings (excluding Bank Overdraft) Lease Liabilities (Refer Note 3.13) Total Particulars Non-current Borrowings (including Current Maturity of Non-current Borrowings) Current Borrowings (excluding Bank Overdraft) Total As at 1st April, 2019 Cash flows Proceeds Repayment Reclassification Reclassification as part of Discontinued Operations ₹ crore As at 31st March, Foreign Exchange Others 2020 34,630.66 7,188.37 (5,607.42) (79.75) Nil 391.47 8.24 36,531.57 13,284.49 3,472.68 42,412.07 Nil (44,100.06) (21.30) 51,387.83 49,600.44 (49,728.78) 166.29 Nil 86.54 Nil Nil Nil 38.80 8.06 Nil 108.84 11,809.65 3,560.22 430.27 125.14 51,901.44 As at 1st April, 2018 Cash flows Proceeds Repayment Reclassification Reclassification as part of Discontinued Operations ₹ crore As at 31st March, Foreign Exchange Others 2019 29,761.96 10,867.07 (9,978.26) 3,766.57 (135.48) 338.00 10.80 34,630.66 18,708.03 48,469.99 34,846.52 45,713.59 (36,376.94) (46,355.20) (4,540.88) (774.31) Nil (135.48) 583.80 921.80 63.96 74.76 13,284.49 47,915.15 16 b. Other Balances with Banks- At Amortised Cost (a) (b) In Deposit Accounts (Refer Note below) In Earmarked Accounts- Unpaid Dividend Account Total Note: Balances with banks held as margin money deposits against guarantees. 17 a. Assets Classified as Held For Sale As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 214.23 124.12 18.45 232.68 17.88 142.00 Accounting Policy Non-current assets or disposal group are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset or disposal Group is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset or disposal Group and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. As at each balance sheet date, the management reviews the appropriateness of such classification. Non-current assets or disposal group classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Property, plant and equipment and intangible assets once classified as held for sale/distribution to owners are not depreciated or amortised. A disposal Group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and: represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations - - 394 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 17 a. Assets Classified as Held For Sale (Contd.) 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 consolidated Ind AS statement of profit and loss. Additional disclosures are provided hereunder. All other notes to the financial statements mainly include amounts for continuing operations, unless otherwise mentioned. Land [Refer Note (i) and (iv)] Building [Refer Note (ii) and (iv)] Other Property, Plant and Equipment [Refer Note (iii) and (iv)] Investments carried at Fair Value through Other Comprehensive Income [Refer Note (v)] Investments in Associates and Joint Ventures [Refer Note (vi)] Investments in Subsidiaries [Refer Note (vii)] Loan to and other receivables from Joint Venture [Refer Note (vi)] Transmission lines - Capital Work in Progress [Refer Note (viii)] Other Assets [Refer Note (vii)] Assets of Discontinued Operations [Refer Note 17 (c)] Total 17 b. Liabilities directly associated with Assets Classified as Held For Sale Liabilities related to Other Assets Liabilities of Discontinued Operations [Refer Note 17 (c)] Total As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 301.66 8.50 1,300.67 22.81 2,562.59 Nil 22.83 127.70 26.23 1,880.07 6,253.06 310.28 9.75 155.59 38.65 2,479.29 Nil 18.59 Nil 26.23 2,064.30 5,102.68 As at 31st March, 2020 ₹ crore 30.46 1,032.07 1,062.53 As at 31st March, 2019 ₹ crore 26.23 966.27 992.50 Notes: (i) Land at Tiruldih ₹ 1.43 crore (net of impairment loss of ₹ 34 crore) (31st March, 2019 - ₹ 9.72 crore). The Group had decided to sell/transfer following land and consequently classified as assets held for sale at lower of carrying amount and fair value less cost to sell: (a) (b) Land at Vadaval ₹ 3.21 crore (31st March, 2019 - ₹ 3.21 crore). (c) (d) Land at Hadapsar ₹ 0.08 crore (31st March, 2019 - ₹ 0.08 crore). (e) Land at Naraj Marthapur ₹ 81.38 crore (net of impairment loss of ₹ 37 crore) (31st March, 2019 - ₹ 81.38 crore). Land at Dehrand ₹ 215.56 crore (31st March, 2019 - ₹ 215.56 crore). (ii) The Group had decided to sell/transfer following buildings and consequently classified as assets held for sale at lower of carrying amount and fair value less cost to sell: (a) Building at Erangal ₹ Nil (31st March, 2019 - ₹ 0.23 crore). (b) Building at Panvel ₹ 0.48 crore (31st March, 2019 - ₹ 0.48 crore). (c) Building at Peninsula ₹ 8.02 crore (31st March, 2019 - ₹ 8.02 crore). (d) Building at Metropolitan has been sold during the year (31st March, 2019 - ₹ 0.89 crore). (e) Building at Oil Tankage Unit, Trombay ₹ Nil crore (31st March, 2019 - ₹ 0.13 crore). (iii) The Group has decided to sell/transfer following plant and equipment and consequently classified as assets held for sale at lower of carrying Ships ₹ 1,280.46 crore (31st March, 2019 - ₹ Nil) amount and fair value less cost to sell: (a) (b) Helicopters ₹ 0.17 crore (31st March, 2019 - ₹ Nil) (c) Rithala power generation plant ₹ 20.04 crore (31st March, 2019 - ₹ 20.04 crore). Impairment recognised for the year ₹ Nil (31st March, 2019 ₹ 88.34 crore) (iv) (a) During the year, the Group has reclassified following assets from held for sale to Property, plant and equipment. No impairment loss has been recognised on reclassification as the Group expected that the fair value (estimated based on the recent market prices of similar properties in similar locations) less costs to sell is higher than the carrying amount: - Building at Erangal ₹ 0.23 crore (31st March, 2019 - ₹ 0.23 crore) - Oil Tankage unit at Trombay [ Land ₹ 0.04 crore (31st March, 2019 - ₹` 0.04 crore), Building ₹ 0.13 crore (31st March, 2019 -₹` 0.13 crore) and Plant and Machinery ₹ 4.55 crore (31st March, 2019 - ₹` 4.55 crore)] (b) During the previous year, the Group signed a binding term sheet for sale of its 32 MW wind project in Maharashtra. As the sale transaction was not concluded in this financial year and the Group is not pursuing the sale anymore, these assets having a carrying value of ₹ 131.00 crore has been ceased to be classified as asset held for sale. 395 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 17 b. Liabilities directly associated with Assets Classified as Held For Sale (Contd.) (v) In the earlier years, the Group had decided to divest its investments carried at fair value through other comprehensive income in Tata Teleservices (Maharashtra) Ltd and consequently classified as assets held for sale at lower of carrying amount and fair value less cost to sell ₹ 22.81 crore (31st March, 2019 - ₹ 38.65 crore). (vi) (a) In the earlier years, the Group had signed definitive agreements for sale of PT Arutmin Indonesia and its associated infrastructure and trading companies and the sale consideration of USD 400.92 million is being expected to be received in a phased manner over next few years. Accordingly, the investments (including investment in PT Mitratama Perkasa) have been classified as assets held for sale at ₹ 1931.60 crore as at 31st March, 2020 (31st March, 2019 - ₹ 1,768.97 crore). (b) During the previous year, the Group decided to divest its investment in Itezhi Tezhi Power Corporation (‘ITPC’) of ₹ 631.00 crore along with loan and other receivables from ITPC amounting to ₹ 18.59 crore and ₹ 4.24 crore respectively. Accordingly, the said investment along with loan and other receivables has been classified as held for sale. No impairment loss has been recognised on reclassification as the Group expects that the fair value less costs to sell is higher than the carrying amount as at 31st March, 2020. (c) During the year, the Group has reassessed its plan to sell investment in Tata Projects Limited (Associate company of the Group) and has reclassified its investment in Tata Projects from asset held for sale to Investments in Associate accounted under equity method. (Refer Note 44). (vii) During the previous year, the Group has decided to divest its investments in equity and preference shares of its subsidiary, TCL Ceramics Ltd (formerly known as Tata Ceramics Ltd). Accordingly, the said investments have been classified as held for sale at ₹ Nil (Net of impairment of ₹14.21 crore). Pursuant to the Share Purchase Agreement ('Agreement') dated 4th January, 2020, the Group has transferred its Equity and Preference share to the purchasers as a part of the conditions mentioned in the Agreement subject to final closing. The said shares has been pledged back to the Group by the purchasers till the final closure. As all the conditions related to the closing has not been completed, the Group believes that it still controls TCL Ceramics Ltd. till all the conditions are fulfilled. Hence, no impact of sale of share has been recognised in the Consolidated Ind AS financial statements. The impact of the sale on the financial statement will not be significant. (viii) During the year, Maharashtra Electricity Regulatory Commission (‘MERC’) has ordered termination of Vikhroli Transmission Lines project carried out by the Group and decided to invite fresh bids for completion of the project. MERC has also ordered that costs incurred by the Group shall be reimbursed by the successful bidder. Accordingly, the Group has classified the said project having carrying amount of ₹ 127.70 crore as held for sale during the year. 17 c. Assets Classified as Held For Sale - Discontinued Operations In the earlier year, the shareholder of the Parent Company approved sale of its Strategic Engineering Division (SED) to Tata Advanced Systems Ltd. (TASL) [a wholly owned subsidiary of Tata Sons Pvt. Ltd.] as a going concern on slump sale basis, subject to regulatory approvals at an enterprise value of ₹ 2,230 crore (out of which ₹ 1,040 crore payable at the time of closing and ₹ 1,190 crore payable on achieving certain milestones). Accordingly, defence business segment is presented as discontinued operations in the segment note. The date of completion of the transaction is subject to approval by National Company Law Tribunal (NCLT) and such other requisite approvals. Results of Strategic Engineering Division for the year are presented below: Income Revenue from Operations Expenditure Cost of Components Consumed Employee Benefits Expense Finance Costs Other Expenses Total Expenses Profit/(Loss) before tax from Discontinued Operations Impairment Loss on Remeasurement to Fair Value (Refer Note Below) Tax Expense/(Credit) Current Tax Deferred Tax Total Tax Expense/(Credit) Profit/(Loss) for the year from Discontinued Operations Other Comprehensive Income/(Expense) Tax on Other Comprehensive Income Total Comprehensive Income/(Expense) The above loss is attributable to the owners of the Parent Company. 396 For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019 ₹ crore 343.77 143.59 244.22 90.04 36.15 55.00 425.41 (81.64) (361.00) Nil (32.41) (32.41) (410.23) 0.20 Nil (410.03) 138.10 110.85 36.33 50.13 335.41 (191.82) Nil (71.92) 5.94 (65.98) (125.84) (1.14) 0.40 (126.58) The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 17 c. Assets Classified as Held For Sale - Discontinued Operations (Contd.) Major classes of Assets and Liabilities of Strategic Engineering Division classified as held for sale are as follows: Assets Property, Plant and Equipment Capital Work-in-Progress Other Intangible Assets Intangible Assets Under Development Non-current Financial Assets Other Non-current Assets Current Assets Inventories Current Financial Assets Other Current Assets Assets Classified as Held For Sale Impairment Loss on Remeasurement to Fair Value Liabilities Non-current Liabilities Financial Liabilities Provisions Current Liabilities Financial Liabilities Provisions Other Current Liabilities Liabilities directly associated with Assets Classified as Held For Sale Net Assets directly associated with Discontinued Operations As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 382.27 422.58 124.13 356.71 3.68 35.40 83.30 663.67 169.33 2,241.07 (361.00) 1,880.07 594.76 27.68 258.99 9.76 140.88 1,032.07 848.00 302.06 418.75 123.42 347.10 3.66 74.66 104.15 261.96 428.54 2,064.30 Nil 2,064.30 679.31 30.22 190.00 17.91 48.83 966.27 1,098.03 Note: During the year, the Group has reassessed the fair value of consideration receivable from TASL and has recognised an impairment loss of ₹ 361.00 crore in the Consolidated Ind AS financials statements. The fair value on consideration has been determined based on the expected value of the consideration using discounted present value technique. The fair value has been categorised under Level 3 inputs, the key assumption being achievement/non-achievement of milestones as defined in the scheme of arrangement. Net cash flows attributable to Strategic Engineering Division are as follows: Net Cash Flow from/(used) in Operating Activities Net Cash Flow from/(used) in Investing Activities Net Cash Flow from/(used) in Financing Activities Net Increase/(Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents as at 1st April (Opening Balance) Cash and Cash Equivalents as at 31st March (Closing Balance) For the year ended 31st March, 2020 For the year ended 31st March, 2019 ₹ crore 127.80 (44.99) (81.32) 1.49 6.11 7.60 ₹ crore 18.67 (87.35) 72.95 4.27 1.84 6.11 1. During the year, the SED has incurred Research and Development expenditure including capital expenditure amounting to ₹ 10.02 crore (31st March, 2019 - ₹ 43.62 crore). 2. Estimated amount of Contracts remaining to be executed on capital account and not provided for is ₹ 66.22 crore (31st March, 2019 ₹ 55.57 crore). 3. Contingent Liability of excise duty amounts to ₹ 14.28 crore (31st March, 2019 - ₹ 14.28 crore). 397 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 18. Regulatory Deferral Account Accounting Policy The Group determines revenue gaps (i.e. surplus/shortfall in actual returns over returns entitled) in respect of its regulated operations in accordance with the provisions of Ind AS 114 “Regulatory Deferral Accounts” read with the Guidance Note on Rate Regulated Activities issued by ICAI and based on the principles laid down under the relevant Tariff Regulations/Tariff Orders notified by the Electricity Regulatory Commission (Regulator) and the actual or expected actions of the regulator under the applicable regulatory framework. Appropriate adjustments in respect of such revenue gaps are made in the regulatory deferral account of the respective year for the amounts which are reasonably determinable and no significant uncertainty exists in such determination. These adjustments/accruals representing revenue gaps are carried forward as Regulatory deferral accounts debit/credit balances (Regulatory Assets/Regulatory Liabilities) as the case may be in the financial statements, which would be recovered/refunded through future billing based on future tariff determination by the regulator in accordance with the electricity regulations. The Group presents separate line items in the balance sheet for: i. ii. the total of all regulatory deferral account credit balances and related deferred tax balances. the total of all regulatory deferral account debit balances and related deferred tax balances; and A separate line item is presented in the Consolidated Ind AS statement of profit and loss for the net movement in regulatory deferral account and deferred tax recoverable payable. Regulatory Deferral Account - Liability - Current Regulatory Liabilities Regulatory Deferral Account - Assets - Non-current Regulatory Assets Net Regulatory Assets/(Liabilities) Rate Regulated Activities As at 31st March, 2020 As at 31st March, 2019 ₹ crore ₹ crore Nil Nil 5,480.17 5,480.17 5,758.13 5,758.13 (i) As per the Ind AS-114 'Regulatory Deferral Accounts', the business of electricity distribution is a Rate Regulated activity wherein the regulators determine Tariff to be charged from consumers based on prevailing regulations in place. MERC Multi Year Tariff Regulations, 2015 (MYT Regulations), is applicable for the period beginning from 1st April, 2016 to 31st March, 2020. These regulations require MERC to determine tariff in a manner wherein the Group can recover its fixed and variable costs including assured rate of return on approved equity base, from its consumers. The Group determines the Revenue, Regulatory Assets and Liabilities as per the terms and conditions specified in MYT Regulations. (ii) Reconciliation of Regulatory Assets/Liabilities of distribution business as per Rate Regulated Activities as on 31st March, 2020, is as follows: Opening Regulatory Assets (Net of Liabilities) Regulatory Deferral Balances (net) during the year (i) Power Purchase Cost (ii) Other expenses as per the terms of Tariff Regulations including Return On Equity (iii) Amount collected (including pertaining to earlier years) Net movement in Regulatory Deferral Balances (i + ii + iii) Regulatory Assets/(Liabilities) on carrying cost recognised as revenue Recovery from Group's Generation business (A) (B) (C) (D) 398 For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019 ₹ crore 5,758.13 5,819.56 8,569.70 2,666.99 (11,688.37) (451.68) 24.00 (15.28) 8,192.16 2,770.78 (11,303.13) (340.19) 29.15 (193.76) The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 18. Regulatory Deferral Account (Contd.) Net movement in Regulatory Deferral Balances in respect of earlier years (Refer note below) Regulatory Assets/(Liabilities) on Deferred Tax Expense/(Income) Regulatory Assets/(Liabilities) on Deferred Tax Expense/(Income) on account of new tax regime (E) (F) (G) Closing Regulatory Asset (Net of Liabilities) (A+B+C+D+E+F+G) For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019 ₹ crore (21.32) 284.32 (98.00) 5,480.17 274.26 169.11 Nil 5,758.13 2 Note: 1 Pursuant to receipt of true-up tariff order from the Regulatory Commission for the years 2017-18 and 2018-19 (31st March, 2019 - 2014-15 to 2016-17), the Group had recognised net expenditure of ₹ 15.83 crore (31st March, 2019 net income of ₹ 91.95 crore) comprising of a credit of ₹ 5.49 crore (31st March, 2019 - ₹ 274.26 crore) in regulatory income and a charge of ₹ 21.32 crore (31st March, 2019 - ₹ 182.31 crore) to revenue from operations. In respect of the Group's power distribution business in Delhi, Delhi Electricity Regulatory Commission (DERC) vide its order dated 31 July, 2019 has trued up regulatory deferral account balance up to 31 March, 2018 at ₹ 2,254.50 crore as against ₹ 4,399.85 crore as per financial books of accounts. The difference in regulatory deferral account is largely due to provisional truing up of capitalisation, disallowance of de-capitalised property, plant and equipment, its corresponding impact on return on capital employed (ROCE), income tax and carrying cost. The difference in regulatory deferral account also includes impact of power purchase cost of Rithala Power Plant allowed by the DERC vide order dated 11 November, 2019 and other previous review/APTEL appeal orders. The disallowances not as per prevailing law, facts and figures have been challenged in Review Petition or at APTEL. For truing up of capitalisation, the DERC has initiated the exercise of physical verification of property, plant and equipment which is at advance stage of completion. 19 a. Share Capital Authorised Equity Shares of C 1/- each Cumulative Redeemable Preference Shares of C 100/- each Issued Equity Shares [including 28,32,060 shares (31st March, 2019 - 28,32,060 shares) not allotted but held in abeyance, 44,02,700 shares cancelled pursuant to a Court Order and 4,80,40,400 shares of the Company held by the erstwhile The Andhra Valley Power Supply Company Limited cancelled pursuant to the Scheme of Amalgamation sanctioned by the High Court of Judicature, Bombay] Subscribed and Paid-up Equity Shares fully Paid-up [excluding 28,32,060 shares (31st March, 2019 - 28,32,060 shares) not allotted but held in abeyance, 44,02,700 shares cancelled pursuant to a Court Order and 4,80,40,400 shares of the Company held by the erstwhile The Andhra Valley Power Supply Company Limited cancelled pursuant to the Scheme of Amalgamation sanctioned by the High Court of Judicature, Bombay] Less: Calls in arrears [including ₹ 0.01 crore (31st March, 2019 - ₹ 0.01 crore) in respect of the erstwhile The Andhra Valley Power Supply Company Limited and the erstwhile The Tata Hydro-Electric Power Supply Company Limited] As at 31st March, 2020 ₹ crore Number As at 31st March, 2019 ₹ crore Number 350,00,00,000 2,29,00,000 350.00 350,00,00,000 229.00 579.00 2,29,00,000 350.00 229.00 579.00 276,17,00,970 276.17 276,17,00,970 276.17 270,47,73,510 270.48 270,47,73,510 270.48 0.04 270.44 0.04 270.44 0.06 270.50 399 Add: Equity Shares forfeited - Amount paid Total Subscribed and Paid-up Share Capital 16,52,300 0.06 16,52,300 270.50 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 19 a. Share Capital (Contd.) (i) Reconciliation of the shares outstanding at the beginning and at the end of the reporting period: Equity Shares At the beginning of the year Issued during the year Outstanding at the end of the year As at 31st March, 2020 As at 31st March, 2019 Number ₹ crore Number ₹ crore 270,64,25,810 270.50 270,64,25,810 Nil Nil Nil 270,64,25,810 270.50 270,64,25,810 270.50 Nil 270.50 (ii) Terms/rights attached to Equity Shares The Parent Company has issued only one class of Equity Shares having a par value of ₹ 1/- per share. Each holder of Equity Shares is entitled to one vote per share. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Parent Company, the holders of Equity Shares will be entitled to receive remaining assets of the Parent Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by the shareholders. (iii) Details of shareholders holding more than 5% shares in the Parent Company Equity Shares of ₹ 1/- each fully paid Tata Sons Pvt. Ltd. ICICI Prudential Bharat Consumption Funds* Life Insurance Corporation of India Matthews Pacific Tiger Fund As at 31st March, 2020 As at 31st March, 2019 Number % Holding Number % Holding 95,39,46,984 21,83,11,309 17,15,81,237 18,03,16,487 35.27 83,97,99,682 8.07 6.34 6.67 11,38,29,237 20,97,31,735 18,03,16,487 31.05 4.21 7.75 6.67 * Shareholding has been reported based on common permanent Account Number 19 b. Unsecured Perpetual Securities 11.40% Unsecured Perpetual Securities Add: Movement during the year Total As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 1,500.00 Nil 1,500.00 Nil 1,500.00 1,500.00 In an earlier year, the Parent Company had raised ₹ 1,500 crore through issue of Unsecured Perpetual Securities (the "Securities"). These Securities are perpetual in nature with no maturity or redemption and are callable only at the option of the Parent Company. The distribution on these Securities are 11.40% with a step up provision if the Securities are not called after 10 years. The distribution on the Securities may be deferred at the option of the Parent Company, if during the six months preceding the relevant distribution payment date, the Parent Company has made no payment on, or redeemed or repurchased, any securities ranking pari passu with, or junior to the instrument. As these Securities are perpetual in nature and ranked senior only to the Share Capital of the Parent Company and the Parent Company does not have any redemption obligation, these are considered to be in the nature of equity instruments. 400 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 20. Other Equity General Reserve Securities Premium Capital Reserves Statutory Reserves Debenture Redemption Reserve Opening Balance Add/(Less): Amount transferred from/(to) Retained Earnings (Net) Closing Balance Capital Redemption Reserve Opening Balance Add/(Less): Amount transferred from Surplus in Statement of Profit and Loss Closing Balance Special Reserve Fund Opening Balance Add/(Less): Amount transferred from Retained Earnings Closing Balance Retained Earnings (Refer Note 1 below) Opening balance Add: Profit for the year Transfer from Equity Instrument through Other Comprehensive Income (Refer Note 5 below) Transfer from Debenture Redemption Reserve (Net) Less: Distribution on Unsecured Perpetual Securities (Refer Note 4 below) Other Comprehensive Income/(Expense) arising from Remeasurement of Defined Benefit Obligation (Net of Tax) Transfer from Equity Instrument through Other Comprehensive Income (Refer Note 5 below) Less: Other Appropriations: Payment of Dividend (Refer Note 3 below) Tax on Dividend Transfer to Special Reserve Fund (under Sec 45-IA of RBI Act, 1934) Transfer to Capital Redemption Reserve Closing Balance Equity Instrument through Other Comprehensive Income Opening balance Add/(Less): Transfer to Retained Earnings (Refer Note 5 below) Add/(Less): Change in Fair Value of Equity Instruments through Other Comprehensive Income Closing Balance Foreign Currency Translation Reserve Opening balance Add/(Less): Addition during the year Closing Balance carried forward .......................... As at 31st March, 2020 As at 31st March, 2019 ₹ crore 4,086.53 5,647.80 232.09 660.08 728.90 (90.70) 638.20 515.76 Nil 515.76 122.59 1.48 124.07 3,265.79 1,017.38 666.34 90.70 170.76 56.12 Nil 351.99 72.37 1.48 Nil 1,121.70 4,387.49 698.52 (666.34) (39.72) (7.54) 576.95 837.68 1,414.63 17,699.11 ₹ crore 4,086.53 5,647.80 232.09 660.08 1,073.16 (344.26) 728.90 15.76 500.00 515.76 119.05 3.54 122.59 2,452.44 2,356.19 Nil 344.26 171.00 17.76 771.15 351.99 71.66 3.54 500.00 813.35 3,265.79 (44.77) 771.15 (27.86) 698.52 367.67 209.28 576.95 16,535.01 401 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 20. Other Equity (Contd.) bought forward .......................... Effective Portion of Cash Flow Hedge Opening balance Add/(Less): Effective Portion of Cash Flow Hedge for the year Closing Balance Total As at 31st March, 2020 As at 31st March, 2019 ₹ crore 17,699.11 ₹ crore 16,535.01 Nil 96.41 96.41 (1.26) 1.26 Nil 17,795.52 16,535.01 Includes gain on fair valuation of land which is not available for distribution ₹ 362.34 crore (31st March, 2019 - ₹ 362.34 crore). Notes: 1. 2. The shareholders of the parent company in their meeting held on 18th June, 2019 approved final dividend of ₹ 1.30 per share aggregating ₹ 351.99 crore (excluding dividend distribution tax) for the financial year 2018-19. The said dividend was paid to the holders of fully paid equity shares on 20th June, 2019. In respect of the year ended 31st March, 2020, the directors have proposed a dividend of ₹ 1.55 per share to be paid on fully paid shares. This equity dividend is subject to approval at the annual general meeting and has not been included as a liability in the Consolidated Ind AS financial statements. The proposed equity dividend is payable to all holders of fully paid equity shares. The total estimated equity dividend to be paid is ₹ 419.68 crore (31st March, 2019 - ₹ 351.99 crore). 3. 4. Pursuant to the amendment in Indian Accounting Standard Ind AS 12 'Income Taxes' effective from 1st April, 2019, the Group has recognised the income tax consequence on interest on perpetual securities in the profit and loss which was earlier recognised directly in other equity and has restated the figures for previous periods presented. Accordingly, the profit after tax for the year ended 31st March, 2019 is higher by ₹ 60.12 crore as compared to previous year consolidated Ind AS financial statement. There is no impact on the “Other Equity” of the Group. 5. Represents gain/(loss) on sale of certain investments carried at fair value through other comprehensive income transferred to Retained Earnings. Nature and purpose of reserves General Reserve General Reserve is used from time to time to transfer profits from Retained Earnings for appropriation purposes. As the General Reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General Reserve will not be reclassified subsequently to consolidated Ind AS statement of profit and loss. Securities Premium Securities Premium is used to record the premium on issue of shares and is utilised in accordance with the provisions of the Companies Act, 2013. Debenture Redemption Reserve The Company was required to create a Debenture Redemption Reserve out of the profits which are available for payment of dividend for the purpose of redemption of debentures. Pursuant to Companies (Share Capital and Debentures) Amendment Rules, 2019 dated 16th August, 2019, the Company is not required to create Debenture Redemption Reserve (DRR). Accordingly, the Company has not created DRR during the year and DRR created till previous years will be transferred to retained earnings on redemption of debentures. Capital Redemption Reserve Capital Redemption Reserve represents amounts set aside on redemption of preference shares. Capital Reserve Capital Reserve consists of forfeiture of the amount received from Tata Sons Pvt. Ltd. on preferential allotment of convertible warrants in the Group, on the lapse of the period to exercise right to convert the said warrants and on forfeiture of amounts paid on Debentures. Special Reserve Fund This reserve represents the amount transferred from its annual profits by the non-banking finance subsidiary in the Group pursuant to Reserve Bank of India regulations. 402 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 20. Other Equity (Contd.) Statutory Reserve Statutory Reserve consists of Special Appropriation towards Project Cost, Development Reserve and Investment Allowance Reserve. Special appropriation to project cost - Due to high capital investment required for the expansion in the electricity industry, the Maharashtra State Government permits part of the capital cost of approved projects to be collected through the electricity tariff and held as a special appropriation. Development Reserve / Investment Allowance Reserve - Until 1978, the Companies made appropriations to a Development Reserve and an Investment Allowance Reserve as required by the Income Tax Act, 1956. New appropriations to these reserves are no longer required due to changes in Indian law. An amount equal to 0.5% on the accumulation in the Investment Allowance Reserve was included in the reasonable return calculation. Retained Earnings Retained Earnings are the profits of the Group earned till date net of appropriations. Equity Instruments through Other Comprehensive Income This reserve represents the cumulative gains and losses arising on revaluation of equity instruments measured at fair value through other comprehensive income, net of amounts reclassified to retained earnings when those assets are disposed off. Foreign Currency Translation Reserve Exchange differences relating to the translation of the results and net assets of the Group's foreign operations from their functional currencies to the Group's presentation currency (i.e. ₹) are recognised directly in other comprehensive income and accumulated in the foreign currency translation reserve. Effective Portion of Cash Flow Hedge The cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the designated portion of the hedging instruments that are recognised and accumulated under the heading of cash flow hedging reserve will be reclassified to profit or loss only when the hedged transaction affects the profit or loss, or included as a basis adjustment to the non-financial hedged item. 21. Non-current Borrowings - At Amortised Cost (i) Unsecured Debentures Redeemable Non-Convertible Debentures 9,423.77 370.00 7,947.81 500.00 As at 31st March, 2020 As at 31st March, 2019 Non-current Current Maturities* Non-current Current Maturities* ₹ crore ₹ crore ₹ crore ₹ crore Term Loans From Banks Deferred Payment Liabilities-Sales Tax Deferral Others Buyer's Credit 2,185.01 2.83 943.28 20.26 3,098.35 8.50 346.67 22.12 Nil Nil Nil 224.00 11,611.61 1,333.54 11,054.66 1,092.79 (ii) Secured Debentures Redeemable Non-Convertible Debentures 2,460.13 87.25 1,436.67 41.00 Term Loans From Banks From Others carried forward ........................... 16,596.40 2,027.00 21,083.53 2,375.77 39.87 2,502.89 16,658.57 1,987.13 20,082.37 2,167.11 45.93 2,254.04 403 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 21. Non-current Borrowings - At Amortised Cost (Contd.) bought forward ........................... Others Buyer's Credit Finance Lease Obligations As at 31st March, 2020 As at 31st March, 2019 Non-current Current Maturities* Non-current Current Maturities* ₹ crore 21,083.53 Nil Nil 21,083.53 ₹ crore 2,502.89 ₹ crore 20,082.37 Nil Nil 2,502.89 Nil 2.20 20,084.57 ₹ crore 2,254.0 143.77 0.83 2,398.64 Total 32,695.14 3,836.43 31,139.23 3,491.43 * Amount disclosed under Other Current Financial Liabilities (Refer Note 23) Security Redeemable Non-convertible Debentures issued by the Group are secured by charge on movable and immovable assets of the respective entities. Term Loans and Buyer’s Credit availed by various entities of the Group from various Banks and Financial Institutions are secured by way of charge on all present and future moveable and immovable assets, stores and spares, raw materials, work-in-progress, finished goods, book debts, project receivables, intangibles, uncalled capital receivables, rights under project documents of the respective entities, project cash flows, regulatory deferral accounts, accounts including Debt Service Reserve Accounts and bank accounts, bank guarantees and pledge of shares of subsidiaries held by their respective holding companies. Terms of Repayment Particulars (i) Unsecured - At Amortised Cost Debentures Redeemable Non-Convertible Debentures Term Loans From Banks Deferred Payment Liabilities-Sales Tax Deferral (ii) Secured - At Amortised Cost Debentures Redeemable Non-Convertible Debentures Term Loans From Banks From Others Amount Outstanding as at 31st March, 2020 FY 20-21 FY 21-22 FY 22-23 Financial Year FY 23-24 FY 24-25 FY 25-30 ₹ crore FY 30-31 and onwards 9,815.00 370.00 1,940.00 2,455.00 2,000.00 550.00 1,000.00 1,500.00 3,130.58 943.28 558.66 1,628.64 23.09 20.26 2.83 Nil Nil Nil Nil Nil Nil Nil Nil Nil 2,554.44 87.25 247.25 559.75 427.25 259.75 810.69 162.50 19,002.21 2,375.77 39.87 2,071.32 3,456.32 31.40 1,749.52 69.98 1,753.06 80.50 1,567.45 91.04 6,175.15 1,552.79 1,924.94 205.74 36,596.64 3,836.43 6,236.46 6,462.89 4,260.81 2,468.24 9,538.63 3,793.18 Less: Impact of recognition of borrowing at amortised cost using effective interest method under Ind AS Less: Unamortised portion of fair value of Corporate Guarantee. 61.40 3.67 36,531.57 Total 404 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 21. Non-current Borrowings - At Amortised Cost (Contd.) Range of interest rates for: 1. Debentures - 8% to 10.75% 2. (a) Term loan of foreign Companies - 2.16% to 4.49% (b) Term loan of Indian Companies - 8.15% to 9.95% 3. Term loan from others - 8.35% to 9.95% 22. Lease Liabilities Accounting Policy At inception of contract, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. At inception or on reassessment of a contract that contains a lease component, the Group allocates consideration in the contract to each lease component on the basis of their relative standalone price. As a Lessee i) Right-of-use Assets The Group recognises right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, lease payments made at or before the commencement date less any lease incentives received and estimate of costs to dismantle. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated remaining useful lives of the assets, as follows: - - Vessels - 12.5 years - - The Group presents right-to-use assets that do not meet the definition of investment property in ‘Property, plant and equipment. Port Intake channel- 40 years Leasehold Land including sub-surface rights- 2 to 95 years Plant and Machinery - 3 years ii) Lease Liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. In calculating the present value of lease payments, the Group generally uses its incremental borrowing rate at the lease commencement date if the discount rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. The carrying amount is remeasured when there is a change in future lease payments arising from a change in index or rate. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments or a change in the assessment of an option to purchase the underlying asset. The Group presents lease liabilities ₹ 3,560.22 crore as financial liability in the Balance Sheet. iii) Short term leases and leases of low value of assets The Group applies the short-term lease recognition exemption to its short-term leases. It also applies the lease of low- value assets recognition exemption that are considered to be low value. Lease payments on short-term leases and leases of low value assets are recognised as expense on a straight-line basis over the lease term. 405 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 22. Lease Liabilities (Contd.) Leasing arrangement as Lessee The Group has lease contracts for various items of plant, machinery, land, vehicles and other equipment used in its operations. Leases of Leasehold land including sub-surface rights generally have lease terms between 2 years and 95 years, while plant and machinery, motor vehicles and other equipment generally have lease terms 3 years and 40 years. Generally, the Group is restricted from assigning and subleasing the leased assets. Amount recognised in the Statement of Profit and Loss Depreciation of Right-of-use assets Interest on lease liabilities Expenses related to short term leases Expenses related to leases of low value assets, excluding short term leases of low value assets ₹ crore For the year ended 31st March, 2020 197.18 308.73 32.03 1.06 Refer Note (4b) for additions to Right-of-Use Assets and the carrying amount of Right-of-Use Assets as at 31st March, 2020. Further, refer Note 40.4.3 for maturity analysis of lease liabilities. Amount recognised in the Statement of Cash Flows Total cash outflow of leases Non-current Lease Liabilities Total Current Lease Liabilities Total ₹ crore For the year ended 31st March, 2020 330.03 As at 31st March, 2020 As at 31st March, 2019 ₹ crore ₹ crore 3,180.48 3,180.48 379.74 379.74 Nil Nil Nil Nil 23. Other Financial Liabilities - At Amortised Cost, unless otherwise stated Non-current (a) Security Deposits from Customers (b) Guarantee Commission Obligation (c) Payables for Capital Supplies and Services (d) Other Liabilities Current (a) Current Maturities of Long-term Debt (Refer Note 21) (b) Interest accrued but not due on Borrowings-Others (c) (d) Investor Education and Protection Fund shall be credited by the following amounts namely: ** Interest accrued but not due on Borrowings-Joint Ventures Unpaid Dividend Unpaid Matured Deposits Unpaid Matured Debentures (e) Other Payables Payables for Capital Supplies and Services carried forward .......................... 406 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 688.16 5.12 28.20 0.04 721.52 662.09 9.23 15.92 0.07 687.31 3,836.43 657.76 181.08 3,491.43 492.16 133.43 22.61 Nil 0.09 22.04 0.04 0.09 440.08 5,138.05 439.91 4,579.10 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 23. Other Financial Liabilities - At Amortised Cost, unless otherwise stated (Contd.) brought forward .......................... Advance Received for Sale of Investments Contingent Consideration Payable (Fair Value through Profit and Loss) Derivative Contracts (Net)- (Fair Value through Profit and Loss) Security Deposits from Electricity Consumers Security Deposits from Customers Tender Deposits from Vendors Interim Dividend Payable to Non-Controlling Shareholders Financial Guarantee Obligation towards Lenders of Jointly Controlled Entity [Refer Note 6b (i) (b)] Payable under 'Pass through arrangement' of trade receivables Other Financial Liabilities Total As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 5,138.05 1,576.59 42.57 64.03 285.84 13.45 39.88 Nil Nil 275.55 66.94 7,502.90 4,579.10 1,099.62 42.57 113.35 278.17 5.67 3.61 22.65 103.74 Nil 232.31 6,480.79 ** Includes amounts outstanding aggregating ₹ 1.48 crore (31st March, 2019 - ₹ 1.25 crore) for more than seven years pending disputes and legal cases. 24. Tax Liabilities Non Current Income-Tax Payable (Net) Total Current Income-Tax Payable (Net) Total 25. Provisions As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 3.03 3.03 3.74 3.74 129.49 129.49 150.22 150.22 Accounting Policy Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material). Present obligations arising under onerous contracts are recognised and measured as provisions with charge to consolidated Ind AS statement of profit and loss. An onerous contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received from the contract. Defined contribution plans Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions. 407 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 25. Provisions (Contd.) Defined benefits plans The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method. Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income (OCI) in the period in which they occur. Remeasurements are not reclassified to consolidated Ind AS statement of profit and loss in subsequent periods. Past service costs are recognised in consolidated Ind AS statement of profit and loss on the earlier of: - - the date of the plan amendment or curtailment, and the date that the Group recognises related restructuring costs Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Group recognises the following changes in the net defined benefit obligation as an expense in the consolidated Ind AS statement of profit and loss: service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine - settlements; and - net interest expense or income. A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs. The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds. The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates. Current and other non-current employee benefits A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service. Liabilities recognised in respect of current employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service. Liabilities recognised in respect of other non-current employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Group in respect of services provided by employees up to the reporting date. Non-current Provision for Employee Benefits Compensated Absences Gratuity (Net) [Refer Note 25 (2.3)] Post-Employment Medical Benefits [Refer Note 25 (2.3)] Other Defined Benefit Plans [Refer Note 25 (2.3)] Other Employee Benefits carried forward ........................... 408 As at 31st March, 2020 As at 31st March, 2019 ₹ crore ₹ crore 171.94 51.79 60.88 69.30 16.59 370.50 370.50 144.95 39.64 47.10 54.50 26.51 312.70 312.70 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 25. Provisions (Contd.) brought forward ........................... Other Provisions Provision for Warranties Total Current Provision for Employee Benefits Compensated Absences Gratuity (Net) [Refer Note 25 (2.3)] Post-Employment Medical Benefits [Refer Note 25 (2.3)] Other Defined Benefit Plans [Refer Note 25 (2.3)] Other Employee Benefits Other Provisions Provision for Warranties Provision for Losses/Onerous Contracts Provision for Rectification Work Total Movement of Other Provisions Balance as at 1st April, 2018 Additional provisions recognised Reductions arising from payments Reductions arising from remeasurements or settlement without cost Exchange Differences Balance as at 31st March, 2019 Balance as at 1st April, 2019 Additional provisions recognised Reductions arising from payments Reductions arising from remeasurements or settlement without cost Balance as at 31st March, 2020 As at 31st March, 2020 As at 31st March, 2019 ₹ crore 370.50 36.90 36.90 ₹ crore 312.70 20.90 20.90 407.40 333.60 30.50 7.99 3.12 55.43 2.06 99.10 9.18 3.64 4.50 17.32 116.42 Provision for Warranties Provision for Losses of Joint Ventures Provision for Losses/ Onerous Contracts Provision for Rectification Work 31.29 15.14 (7.20) Nil Nil 39.23 39.23 10.45 (3.60) Nil 46.08 84.50 Nil Nil Nil (1.05) 83.45 83.45 Nil Nil 23.28 9.57 (18.00) (0.11) Nil 14.74 14.74 3.16 (0.06) (83.45) Nil (14.20) 3.64 24.32 Nil (10.92) Nil Nil 13.40 13.40 Nil (8.90) Nil 4.50 29.33 1.66 2.56 8.40 5.13 47.08 18.33 14.74 13.40 46.47 93.55 ₹ crore Total 163.39 24.71 (36.12) (0.11) (1.05) 150.82 150.82 13.61 (12.56) (97.65) 54.22 Notes: 1. The provision for warranty claims represents estimated warranty liability for the products sold. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. The provision related to Asset held for Sale is transferred to Liabilities pertaining to Asset held for Sale. 2. The provision for losses of Joint Ventures is recognised, to the extent that the Group has incurred legal or constructive obligations, in the event that the share of losses for joint ventures accounted for using the equity method, exceeds zero. 3. The provision for losses includes provision for estimated losses on onerous contracts and provision for contingency on regulatory assets recognised. 4. The provision for rectification work relates to the estimated cost of work agreed to be carried out for the rectification of goods supplied to the customers. The amount is anticipated to be expensed in the subsequent year. These amounts have not been discounted for the purposes of measuring the provision for rectification work, because the effect is not material. 409 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 1. 25. Provisions (Contd.) Employee benefit plan Defined Contribution plan The Group makes Provident Fund and Superannuation Fund contributions to defined contribution plans for eligible employees. Under the schemes, the Group is required to contribute a specified percentage of the payroll costs. The provident fund contributions as specified under the law are paid to the Government approved provident fund trust or statutory provident fund authorities. The Group has no obligation, other than the contribution payable to the respective fund. The Group recognises such contribution payable to the respective fund scheme as an expense, when an employee renders the related service. The Group has recognised ₹ 67.88 crore (31st March, 2019 - ₹ 56.07 crore) for provident fund contributions and ₹ 10.75 crore (31st March, 2019 - ₹ 10.63 crore) for superannuation contributions in the Consolidated Ind AS statement of profit and loss. The contributions payable to these plans by the Group are at rates specified in the rules of the schemes. 2. 2.1 Defined benefit plans The Group operates the following unfunded/funded defined benefit plans: Funded: Provident Fund The Parent Company makes Provident Fund contributions to defined benefit plans for eligible employees. Under the scheme, the Parent Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions as specified under the law are paid to the provident fund set up as a trust by the Parent Company. The Parent Company is generally liable for annual contributions and any shortfall in the fund assets based on the government specified minimum rates of return and recognises such contributions and shortfall, if any, as an expense in the year it is incurred. Having regard to the assets of the fund and the return on the investments, the Parent Company does not expect any shortfall in the foreseeable future. Having regard to the assets of the fund and the return on the investments, the Group expects shortfall of ₹ 10.52 crore which has been provided as an expenditure during the year. In terms of guidance note issued by the Institute of Actuaries of India, the actuary has provided a valuation of Provident fund liability based on the assumptions listed and determined the short fall of ₹ 10.52 crore as at 31st March, 2020 (31st March, 2019 - ₹ 8.27 crore). The significant assumptions used for the purpose of the actuarial valuations were as follows: Particulars Interest rate Discount rate Contribution during the year (₹ crore) Short fall provided as expenditure for the year (₹ crore) 31st March, 2020 8.50% p.a. 6.50% p.a. 21.15 10.52 31st March, 2019 8.65% p.a. 7.40% p.a. 19.18 8.27 The movements in the net defined benefit obligations are as follows: Funded Plan: Present value of obligation Fair value of plan assets Balance as at 1st April, 2018 Current service cost Past service cost Interest Cost/(Income) Amount recognised in Statement of Profit and Loss Remeasurement (gains)/losses Return on plan assets excluding amounts included in interest cost/(income) Actuarial (gains)/losses arising from changes in demographic assumptions Actuarial (gains)/losses arising from changes in financial assumptions Actuarial (gains)/losses arising from experience Amount recognised in Other Comprehensive Income ₹ crore 711.19 20.75 Nil 57.37 78.12 Nil Nil 4.46 6.37 10.83 ₹ crore 710.60 Nil Nil 50.70 50.70 10.83 Nil Nil Nil 10.83 Net amount ₹ crore 0.59 20.75 Nil 6.67 27.42 (10.83) Nil 4.46 6.37 Nil 410 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 25. Provisions (Contd.) Funded Plan: Employer contribution Employee contribution Benefits paid Acquisitions credit/(cost) Balance as at 31st March, 2019 Balance as at 31st March, 2019 Current service cost Past service cost Interest Cost/(Income) Amount recognised in Statement of Profit and Loss Remeasurement (gains)/losses Return on plan assets excluding amounts included in interest cost/(income) Actuarial (gains)/losses arising from changes in demographic assumptions Actuarial (gains)/losses arising from changes in financial assumptions Actuarial (gains)/losses arising from experience Amount recognised in Other Comprehensive Income Employer contribution Employee contribution Benefits paid Acquisitions credit/(cost) Balance as at 31st March, 2020 Present value of obligation Fair value of plan assets ₹ crore Nil 44.89 (90.53) 5.81 760.31 760.31 22.02 Nil 56.34 78.36 Nil (1.59) (3.30) 13.84 8.95 Nil 49.34 (98.17) 8.97 807.76 ₹ crore 19.74 44.89 (90.53) 5.81 752.04 752.04 Nil Nil 57.21 57.21 (40.00) Nil Nil Nil (40.00) 21.13 49.34 (98.17) 8.97 750.52 Net amount ₹ crore (19.74) Nil Nil Nil 8.27 8.27 22.02 Nil (0.87) 21.15 40.00 (1.59) (3.30) 13.84 48.95 (21.13) Nil Nil Nil 57.24 Unfunded: Post Employment Medical Benefits The Group provides certain post-employment health care benefits to superannuated employees at some of its locations. In terms of the plan, the retired employees can avail free medical check-up and medicines at Group's facilities. Pension (including Director pension) The Group operates a defined benefit pension plan for employees who have completed 15 years of continuous service. The plan provides benefits to members in the form of a pre-determined lumpsum payment on retirement. Executive Director, on retirement, is entitled to pension payable for life including HRA benefit. The level of benefit is approved by the Board of Directors of the Group from time to time. Ex-Gratia Death Benefit The Group has a defined benefit plan granting ex-gratia in case of death during service. The benefit consists of a pre- determined lumpsum amount along with a sum determined based on the last drawn basic salary per month and the length of service. Retirement Gift The Group has a defined benefit plan granting a pre-determined sum as retirement gift on superannuation of an employee. Funded/Unfunded: Gratuity The Group has a defined benefit gratuity plan. The gratuity plan is primarily governed by the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of five years are eligible for gratuity. The level of benefits provided depends on the member's length of service and salary at the retirement date. The gratuity plan is a combination of funded plan and unfunded plan for various companies in the Group. In case of funded plan, the fund has the form of a trust and is governed by Trustees appointed by the Group. The Trustees are responsible for the administration of the plan assets and for the definition of the investment strategy in accordance with the regulations. The funds are deployed in recognised insurer managed funds in India. 411 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 25. Provisions (Contd.) 2.2 The principal assumptions used for the purposes of the actuarial valuations were as follows: Valuation as at Discount Rate/Expected Rate of Return on Plan Assets Salary Growth Rate Turnover Rate Pension Increase Rate Mortality Table Annual Increase in Healthcare Cost 31st March, 2020 6.25% to 6.84 % p.a 5% to 8% p.a. 2% to 8% p.a. 3% to 5% p.a. Indian Assured Lives Mortality (2006-08) (modified) Ult & 100% of Indian Assured Lives Mortality (2012-2014) 8% p.a. 31st March, 2019 7.4% to 7.7 % p.a 5% to 8% p.a. 2.5% to 8% p.a. 3% to 5% p.a. Indian Assured Lives Mortality (2006-08) (modified) Ult 8% p.a. 2.3 The amounts recognised in the financial statements and the movements in the net defined benefit obligations over the year are as follows: (a) Funded Plan - Gratuity: Balance as at 1st April, 2018* Current service cost Past service cost Interest Cost/(Income) Less: Amount recognised in Statement of Profit and Loss - Discontinued Operations Amount recognised in Statement of Profit and Loss - Continuing Operations Remeasurement (gains)/losses Return on plan assets excluding amounts included in interest cost/(income) Actuarial (gains)/losses arising from changes in demographic assumptions Actuarial (gains)/losses arising from changes in financial assumptions Actuarial (gains)/losses arising from experience Amount recognised in Other Comprehensive Income Employer contribution Benefits paid Acquisitions credit/(cost) Add: Amounts recognised in current year - Discontinued Operations Balance as at 31st March, 2019 Balance as at 31st March, 2019* Current service cost Past service cost Interest Cost/(Income) Less: Amount recognised in Statement of Profit and Loss - Discontinued Operations Amount recognised in Statement of Profit and Loss - Continuing Operations Remeasurement (gains)/losses Return on plan assets excluding amounts included in interest cost/(income) Actuarial (gains)/losses arising from changes in demographic assumptions Actuarial (gains)/losses arising from changes in financial assumptions Actuarial (gains)/losses arising from experience Less: Amount recognised in Other Comprehensive Income - Discontinued Operations Amount recognised in Other Comprehensive Income Employer contribution Benefits paid Acquisitions credit/(cost) Add: Amounts recognised in current year - Discontinued Operations Balance as at 31st March, 2020 * Net assets is classified as "Other Current Assets" Present value of obligation ₹ crore Fair value of plan assets ₹ crore 289.45 20.60 Nil 22.43 (0.58) 42.45 Nil 3.02 6.70 16.93 26.65 Nil (34.64) (1.40) 0.58 323.09 323.09 19.01 Nil 25.64 1.30 45.95 0.05 25.46 20.79 (0.82) (0.21) 45.27 Nil (59.93) (0.39) (1.08) 352.91 (299.65) Nil Nil (27.34) Nil (27.34) 6.62 Nil (2.26) Nil 4.36 (2.64) 1.43 Nil Nil (323.84) (323.84) Nil Nil (24.10) Nil (24.10) (8.25) Nil Nil Nil Nil (8.25) (6.63) 4.09 Nil Nil (358.73) Net amount ₹ crore (10.20) 20.60 Nil (4.91) (0.58) 15.11 6.62 3.02 4.44 16.93 31.01 (2.64) (33.21) (1.40) 0.58 (0.75) (0.75) 19.01 Nil 1.54 1.30 21.85 (8.20) 25.46 20.79 (0.82) (0.21) 37.02 (6.63) (55.84) (0.39) (1.08) (5.82) 412 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 25. Provisions (Contd.) (b) Unfunded Plan - Gratuity and Other Defined Benefit Plans: Balance as at 1st April, 2018 Current service cost Past service cost Past service cost - Plan amendments Interest Cost/(Income) Less: Amount recognised in Statement of Profit and Loss - Discontinued Operations Amount recognised in Statement of Profit and Loss - Continuing Operations Remeasurement (gains)/losses Actuarial (gains)/losses arising from changes in demographic assumptions Actuarial (gains)/losses arising from changes in financial assumptions Actuarial (gains)/losses arising from experience Less: Amount recognised in other comprehensive income - Discontinued operations Amount recognised in Other Comprehensive Income Benefits paid Acquisitions credit/(cost) Add: Amounts recognised in current year - Discontinued Operations Less: Transferred to Assets/Liabilities held for sale - Discontinued Operations Balance as at 31st March, 2019 Balance as at 31st March, 2019 Current service cost Past service cost Past service cost - Plan amendments Interest Cost/(Income) Less: Amount recognised in Statement of Profit and Loss - Discontinued Operations Amount recognised in Statement of Profit and Loss - Continuing Operations Remeasurement (gains)/losses Actuarial (gains)/losses arising from changes in demographic assumptions Actuarial (gains)/losses arising from changes in financial assumptions Actuarial (gains)/losses arising from experience Less: Amount recognised in other comprehensive income - Discontinued operations Amount recognised in Other Comprehensive Income Benefits paid Acquisitions credit/(cost) Add: Amounts recognised in current year - Discontinued Operations Balance as at 31st March, 2020 Reconciliation with amount presented in the Balance Sheet Gratuity provision - funded Gratuity provision - unfunded Non current provision for Gratuity (net) Add: Current provision for Gratuity (net) Less: Gratuity Assets classified as other assets Gratuity provision (net) Gratuity Amount ₹ crore 19.95 2.14 Nil Nil 1.53 Nil 3.67 0.23 0.92 (2.23) Nil (1.08) (1.00) 1.04 Nil Nil 22.58 22.58 2.72 Nil Nil 1.60 Nil 4.32 (0.56) 2.33 3.64 Nil 5.41 (2.72) 0.56 Nil 30.15 Other Defined Benefit Plans Amount ₹ crore 104.50 5.61 0.79 4.58 8.91 (0.44) 19.45 Nil 3.41 (8.53) 0.24 (4.88) (4.11) 0.02 0.44 (2.86) 112.56 112.56 6.87 0.25 13.52 10.44 0.07 31.15 (5.65) 10.90 (9.68) 0.41 (4.02) (7.31) (0.31) (0.58) 131.49 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore (5.82) 30.15 24.33 51.79 7.99 35.45 24.33 6.54 22.58 29.12 39.64 1.66 34.76 6.54 413 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 25. Provisions (Contd.) Provision for Other defined benefit obligation Closing provision as per above note 2.1 and 2.3(b) Non current provision for Post-Employment Medical benefits Add: Non current provision for Other defined benefit plans Add: Current provision for Post-Employment Medical benefits Add: Current provision for Other defined benefit plans Closing provision as per above As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 188.73 69.30 60.88 3.12 55.43 188.73 112.56 54.50 47.10 2.56 8.40 112.56 2.4 Sensitivity analysis The sensitivity of the defined benefit obligations to changes in the weighted principal assumptions is: Change in assumption Increase in assumption Decrease in assumption Discount rate Salary/Pension growth rate Mortality rates Healthcare cost 31st March, 2020 0.50% 0.50% 1 year 0.50% 31st March, 2019 0.50% 0.50% 1 year 0.50% Decrease by Increase by Decrease by Increase by 31st March, 2020 24.15 19.97 5.84 5.17 31st March, 2019 19.70 16.91 4.41 3.78 31st March, 2020 26.54 18.56 5.74 4.60 31st March, 2019 21.59 15.71 4.32 3.38 Increase by Decrease by Increase by Decrease by The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet. The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period. These plans typically expose the Company to actuarial risks such as: Investment Risk, Interest Risk, Longevity Risk and Salary Risk. Investment Risk The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. Interest Risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan debt investments. Longevity Risk The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability. Salary Risk The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability. 414 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 25. Provisions (Contd.) 2.5 The expected maturity analysis of undiscounted defined benefit obligation (Funded and Unfunded) is as follows: Within 1 year Between 1 - 2 years Between 2 - 3 years Between 3 - 4 years Between 4 - 5 years Beyond 5 years 31st March, 2020 ₹ crore 31st March, 2019 ₹ crore 106.05 155.63 145.32 134.28 136.92 723.06 97.40 139.33 145.50 139.49 135.61 793.98 The weighted average duration of the defined benefit obligation is approximately 7.4 years (31st March, 2019 - 8.1 years). The contribution expected to be made by the Group during the financial year 2019-20 is ₹ 23.01 crore (31st March, 2019 - ₹ 2.01 crore). 2.6 Risk exposure: Through its defined benefit plans, the Group is exposed to a number of risks, the most significant of which are detailed below: Asset volatility: The plan liabilities are calculated using a discount rate set with reference to government bond yield. If plan assets underperform this yield, it will result in deficit. These are subject to interest rate risk. To offset the risk, the plan assets have been deployed in high grade insurer managed funds. Inflation rate risk: Higher than expected increase in salary and medical cost will increase the defined benefit obligation. Demographic risk: This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligations is not straight forward and depends upon the combination of salary increase, discount rate and vesting criterion. 2.7 Major categories of plan assets: Plan assets are funded with the trust set up by the Group. The Insurer trust invests the funds in various financial instruments. Major categories of plan assets are as follows: Quoted Equity Instruments Debt Instruments Government Securities Others Cash & Cash Equivalents Provident Fund Gratuity 31st March, 2020 31st March, 2019 31st March, 2020 31st March, 2019 % 4% 26% 54% 16% % 2% 37% 45% 16% % 18% 47% 27% 9% % 24% 24% 34% 18% 415 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 26. Other Liabilities Non-current Consumers' Benefit Account [Refer Note 37(e)] Deferred Revenue - Service Line Contributions from Consumers Advance from Customers Deferred Rent Liability Deferred Revenue Liability Deferred Revenue Grant* Total As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 16.97 1,321.37 0.11 45.43 683.43 17.21 38.91 1,217.12 0.21 44.73 555.70 17.08 2,084.52 1,873.75 * The Group has recognised an income of ₹ 0.89 crore (31st March, 2019 - ₹ 9.61 crore) on account of Deferred Grants during the year in the statement of profit and loss account. Current Statutory Liabilities Advance from Customers/Public Utilities Advance from Consumers Liabilities towards Consumers Statutory Consumer Reserves [Refer Note 37(e)] Deferred Revenue Liability Other Liabilities Total 27. Current Borrowings - At Amortised Cost As at 31st March, 2020 As at 31st March, 2019 ₹ crore ₹ crore 241.86 280.94 501.21 195.96 168.00 41.62 23.49 315.51 154.59 330.20 11.50 561.75 23.52 102.57 1,453.08 1,499.64 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore (i) Unsecured From Debentures (a) Redeemable Non-Convertible Debentures 370.00 Nil From Banks (b) Buyers' Line of Credit (c) Bank Overdraft - repayable on demand (d) Short-term Loans From Others (e) From Related Parties (f ) From Other (Refer Note Below) (g) Commercial Papers carried forward ........................... 416 9.23 34.71 1,562.44 Nil 203.69 2,776.16 2,022.78 140.28 6,630.18 10,769.62 10,769.62 2,740.39 Nil 7,259.52 12,979.76 12,979.76 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 27. Current Borrowings - At Amortised Cost (Contd.) bought forward ........................... (ii) Secured From Banks (a) Buyers' Line of Credit (b) Short-term Loans (c) Bank Overdraft - repayable on demand From Others (d) From Others Total As at 31st March, 2020 ₹ crore 10,769.62 As at 31st March, 2019 ₹ crore 12,979.76 Nil 1,074.74 Nil Nil 165.62 404.80 306.99 18.21 1,074.74 895.62 11,844.36 13,875.38 Note: During the current year, the Group has entered into a Suppliers’ Credit Program (“Facility”) with a party whereby the Group would get additional credit period over and above the original credit period granted by certain coal suppliers. Under this Facility, the party shall pay the said coal suppliers on the original due date on behalf of the Group and grant an additional credit period to the Group. This Facility is for USD 500 million and available for an initial period of 18 months. The Group has utilised USD 18.62 million of this facility as at 31st March, 2020. Security Short-term Loans and Buyer's Line of Credit availed by various entities of the Group are secured by a charge on immovable property of certain entities, both present and future and are also secured by way of charge on tangible and intangible assets, current assets, receivables and stores and spares, uncalled capital receivables, rights under project documents, project cash flows, pledge of shares and monies receivable of the respective entities. 28. Revenue from Operations Revenue recognition Accounting Policy Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. Description of performance obligations are as follows: (i) Sale of Power - Generation (Thermal and Hydro) Revenue from sale of power is recognised net of cash discount over time for each unit of electricity delivered. Contract price determined as per tariff regulations The Group as per the prevalent tariff regulations is required to recover its Annual Revenue Requirement ('ARR') comprising of expenditure on account of fuel cost, operations and maintenance expenses, financing costs, taxes and assured return on regulator approved equity with additional incentive for operational efficiencies. Accordingly, rate per unit is determined using input method based on the Group's efforts to the satisfaction of a performance obligation to deliver power. As per tariff regulations, the Group determines ARR and any surplus/shortfall in recovery of the same is accounted as revenue. Contract Price as per long term agreements Rate per unit is determined using input method based on the Group's efforts to the satisfaction of a performance obligation to deliver power. Variable consideration forming part of total transaction price will be allocated and recognised when the terms of variable payment relate specifically to the Group's efforts to satisfy the performance obligation i.e. in the year of occurrence of event linked to variable consideration. The transaction price is adjusted for significant financing component, if any and the adjustment is accounted as finance cost. (ii) Sale of Power - Generation (Wind and Solar) Revenue from sale of power is recognised net of cash discount over time for each unit of electricity delivered at the contracted rate. The transaction price is adjusted for significant financing component, if any and the adjustment is accounted as finance cost. 417 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 28. Revenue from Operations (Contd.) (iii) Transmission of Power Revenue from transmission of power is recognised net of cash discount over time for transmission of electricity. The Group as per the prevalent tariff regulations is required to recover its Annual Revenue Requirement ('ARR') comprising of expenditure on account of operations and maintenance expenses, financing costs, taxes and assured return on regulator approved equity with additional incentive for operational efficiencies. Input method is used to recognise revenue based on the Group's efforts or inputs to the satisfaction of a performance obligation to deliver power. As per tariff regulations, the Group determines ARR and any surplus/shortfall in recovery of the same is accounted as revenue. (iv) Sale of Power - Distribution Revenue from sale of power is recognised net of cash discount over time for each unit of electricity delivered at the pre determined rate. (v) Trading of power In the arrangement's the Group is acting as an agent, the revenue is recognised on net basis when the units of electricity are delivered to power procurers because this is when the Group transfers control over its services and the customer benefits from the Group's such agency services. The Group determines its revenue on certain contracts net of power purchase cost based on the following factors: a. another party is primarily responsible for fulfilling the contract as the Group does not have the ability to direct the use of power supplied or obtain benefits from supply of power. b. the Group does not have inventory risk before or after the power has been delivered to customers as the power is directly supplied to customer. c. the Group has no discretion in establishing the price for supply of power. The Group's consideration in these contracts is only based on the difference between sales price charged to procurer and purchase price given to supplier. For other contracts which does not qualify the conditions mentioned above, revenue is determined on gross basis. (vi) Sale of Solar Products Revenue from turnkey contracts, which are generally time bound fixed price contracts, are recognised over the life of the contract using the proportionate completion method, with contracts costs determining the degree of completion. (vii) Rendering of Services Revenue from a contract to provide services is recognised over time based on : Input method where the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of performance obligation. Revenue, including estimated fees or profits, are recorded proportionally based on measure of progress. Output method where direct measurements of value to the customer based on survey's of performance completed to date. Revenue is recognised net of cash discount at a point in time at the contracted rate. (viii) Consumers are billed on a monthly basis and are given average credit period of 30 to 45 days for payment. There is no significant judgement involved while evaluating the timing as to when customers obtain control of promised goods and services. (ix) In the regulated operations of the Group where tariff recovered from consumers is determined on cost plus return on equity, the Income tax cost is pass through cost and accordingly the Group recognises Deferred tax recoverable / payable against any Deferred tax expense/ income. The same has now been included in 'Revenue from Operations' in case of Generation and Transmission Divisions and 'Net Movement in Regulatory Deferral Balances' in case of Distribution Division. There is no significant judgement involved while evaluating the timing as to when customers obtain control of promised goods and services. 418 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 28. Revenue from Operations (Contd.) (a) Revenue from Power Supply and Transmission Charges Add/(Less): Cash Discount Add/(Less): Add/(Less): Income to be adjusted in future tariff determination (Net) Income to be adjusted in future tariff determination (Net) in respect of earlier years (Refer Note 18) Add/(Less): Deferred Tax Recoverable/Payable (Refer Note 3.15) (Less): Power Purchase Cost (where Group acts as an agent) For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019 ₹ crore 28,264.95 (69.40) (665.32) 5.49 31.41 (2,182.90) 25,384.23 28,408.70 (165.19) 226.06 (182.31) 322.41 (2,366.89) 26,242.78 (b) Revenue from Power Supply - Assets Under Finance Lease 1,051.27 1,030.64 (c) Project/Operation Management Services 119.19 123.89 (d) Revenue from Sale of: Solar Products Electronic Products (e) Income from Finance Lease (f) Finance Income from Service Concession Agreement (g) Other Operating Revenue Rental of Land, Buildings, Plant and Equipment, etc. Charter Hire Income in respect of Services Rendered Compensation Amortisation of Capital Grants Amortisation of Service Line Contributions Income from Storage & Terminalling Miscellaneous Revenue and Sundry Credits Sale of Fly Ash Sale of Coal Sale of Carbon Credits Sale of Products - Trading Dividend from Equity Investments measured at FVTOCI Profit on sale of Current Investment - measured at FVTPL Sale of Renewable Energy Certificates 1,418.28 44.37 1,462.65 91.55 38.71 10.81 220.37 404.58 0.41 3.25 89.08 15.22 93.09 10.00 78.21 6.25 0.95 1.85 4.34 50.36 988.77 1,214.69 49.23 1,263.92 87.26 39.98 15.51 214.36 302.39 Nil 3.56 82.96 15.39 71.46 11.67 315.73 3.89 0.83 2.05 3.68 49.11 1092.59 Total 29,136.37 29,881.06 Note: Revenue from operations for the year ended 31st March, 2019 includes Regulatory Assets on Deferred Tax Liability expected to be recovered from customers amounting to ₹ 272.00 crore recognised pursuant to extension of Power Purchase Agreement for its generating plants for five years w.e.f 1st April, 2019. 419 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 28. Revenue from Operations (Contd.) Details of Revenue from Contract with Customers Particulars Total Revenue from Contract with Customers Less: Significant Financing Component Add: Cash Discount/Rebates etc. Total Revenue as per Contracted Price For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019 ₹ crore 28,836.15 29,610.68 (67.40) 69.40 (45.57) 165.19 28,838.15 29,730.30 Transaction Price - Remaining Performance Obligation The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognised as at the end of the reporting period and an explanation as to when the Group expects to recognise these amounts in revenue. Applying the practical expedient as given in Ind AS 115, the Group has not disclosed the remaining performance obligation related disclosures for contracts as the revenue recognised corresponds directly with the value to the customer of the entity's performance completed to date. The aggregate value of performance obligations that are partially unsatisfied as at 31st March, 2020, other than those meeting the exclusion criteria mentioned above is ₹ 1,27,165.72 crore (31st March, 2019 - ₹ 1,39,285.74 crore). Out of this, the group expects to recognise revenue of around 5.66% (31st March, 2019 - 5.37%) within the next one year and the remaining thereafter. 420 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 9 1 0 2 e r o r c ₹ 0 2 0 2 e r o r c ₹ 9 1 0 2 e r o r c ₹ 0 2 0 2 e r o r c ₹ 9 1 0 2 e r o r c ₹ 0 2 0 2 e r o r c ₹ 9 1 0 2 e r o r c ₹ 0 2 0 2 e r o r c ₹ 9 1 0 2 e r o r c ₹ 0 2 0 2 e r o r c ₹ r a e y e h t r o F r a e y e h t r o F r a e y e h t r o F r a e y e h t r o F r a e y e h t r o F r a e y e h t r o F r a e y e h t r o F r a e y e h t r o F r a e y e h t r o F r a e y e h t r o F d e d n e d e d n e d e d n e d e d n e d e d n e d e d n e d e d n e d e d n e d e d n e d e d n e , h c r a M t s 1 3 , h c r a M t s 1 3 , h c r a M t s 1 3 , h c r a M t s 1 3 , h c r a M t s 1 3 , h c r a M t s 1 3 , h c r a M t s 1 3 , h c r a M t s 1 3 , h c r a M t s 1 3 , h c r a M t s 1 3 l a t o T t n e m g e S r e t n I t n e m g e S r e t n I e r o f e B ( ) n o i t a n m i i l E l a t o T s r e m o t s u C h t i w s t c a r t n o C s r e m o t s u C h t i w m o r f e u n e v e R n a h t r e h t O s t c a r t n o C m o r f e u n e v e R ' s p u o r G e h t h t i w e u n e v e r d e t a g e r g g a s i d e h t f o n o i t a i l i c n o c e r e h t s e d u l c n i o s l a l e b a t e h T . s e c i v r e s r o t c u d o r p f o e r u t a n d n a e p y t y b d e t a g e r g g a s i d s i e u n e v e R ) . d t n o C ( s n o i t a r e p O m o r f e u n e v e R . 8 2 s t n e m e t a t S l a i c n a n i F d e t a d i l o s n o C e h t o t s e t o N . 7 0 5 1 4 0 1 , . 1 9 1 4 3 9 , . 4 6 0 3 0 1 , . 7 2 1 5 0 1 , 5 4 1 7 . . 6 3 4 1 2 7 8 7 4 . 7 6 1 1 . . 3 7 5 1 3 0 7 6 8 . 2 3 0 1 . 4 0 0 . 8 7 3 2 . 8 6 5 4 . . 7 3 0 2 2 8 8 0 7 . 0 0 0 1 . 1 2 8 7 . 1 9 8 8 . 9 4 5 . 5 0 0 . 8 9 6 3 . l i N 6 8 3 . l i N l i N l i N l i N l i N l i N l i N l i N 3 9 1 . l i N l i N l i N l i N l i N l i N l i N 8 0 1 . 9 9 0 . 1 3 5 7 . . 6 3 4 1 2 7 8 7 4 . 7 6 1 1 . . 3 7 5 1 3 0 7 6 8 . 2 3 0 1 . 4 0 0 . 6 8 4 2 . 1 6 7 4 . . 7 3 0 2 2 8 8 0 7 . 0 0 0 1 . 1 2 8 7 . 1 9 8 8 . 9 4 5 . 5 0 0 . 7 9 7 3 . . 4 6 0 3 0 1 , . 7 2 1 5 0 1 , . 9 5 2 1 4 3 , . 7 0 0 8 5 3 , . 6 6 7 2 8 3 1 , . 8 9 1 2 9 2 1 , . 3 6 7 2 2 2 1 , . 5 7 9 4 9 0 1 , . 3 5 7 1 4 3 , . 9 9 2 8 5 3 , . 6 1 5 4 6 5 1 , . 4 7 2 3 5 4 1 , 8 8 6 2 . 9 0 9 2 . . 1 5 5 1 0 2 , . 1 4 3 7 1 2 , . 9 6 4 1 2 1 , . 8 2 8 1 4 1 , 7 1 2 . 3 1 6 4 . 6 9 9 3 . 6 5 0 . 2 0 0 . 2 8 2 . 9 8 3 . 3 3 7 2 . 9 9 1 . 5 3 9 4 . 2 6 8 3 . 4 6 2 . 2 0 0 . 0 5 2 . 5 2 6 . 9 6 9 1 . . 6 9 9 7 3 3 , . 4 8 1 4 7 3 , l i N l i N l i N l i N l i N l i N l i N l i N l i N 9 9 0 . . 4 4 9 2 2 l i N l i N l i N l i N l i N l i N l i N l i N 9 7 0 . 9 7 6 . . 3 0 8 2 2 . 3 4 0 3 2 . 1 6 5 3 2 7 8 7 2 . 8 8 9 2 . . 5 9 4 4 2 2 , . 4 4 1 0 4 2 , . 9 6 4 1 2 1 , . 7 0 5 2 4 1 , 7 1 2 . 3 1 6 4 . 6 9 9 3 . 6 5 0 . 2 0 0 . 2 8 2 . 9 8 3 . 3 3 7 2 . 9 9 1 . 5 3 9 4 . 2 6 8 3 . 4 6 2 . 2 0 0 . 0 5 2 . 5 2 6 . 9 6 9 1 . . 9 3 0 1 6 3 , . 5 4 7 7 9 3 , l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N 0 7 6 8 . 2 3 0 1 . 4 0 0 . 6 8 4 2 . . 2 9 1 2 1 9 4 5 . 5 0 0 . 1 9 8 8 . 7 9 7 3 . . 2 4 2 3 1 l i N l i N l i N l i N l i N l i N 6 5 0 . 2 0 0 . 2 8 2 . 9 8 3 . 3 3 7 2 . 2 6 4 3 . l i N l i N l i N l i N l i N l i N 4 6 2 . 2 0 0 . 0 5 2 . 5 2 6 . 9 6 9 1 . 0 1 1 3 . . 4 6 0 3 0 1 , . 6 6 7 2 8 3 1 , . 7 2 1 5 0 1 , . 8 9 1 2 9 2 1 , 1 3 5 7 . . 6 3 4 1 2 7 8 7 4 . 7 6 1 1 . . 3 7 5 1 3 l i N l i N l i N l i N 1 6 7 4 . . 7 3 0 2 2 . 8 8 0 7 . 0 0 0 1 . 1 2 8 7 l i N l i N l i N l i N . c t e . 4 2 3 2 5 5 1 , . 2 3 0 0 4 4 1 , s e c i v r e S t n e m e g a n a M n o i t a r e p O / t c e o r P j e s a e L r e d n U s t e s s A m o r f r e w o P f o e a S l d e r e d n e R s e c i v r e S f o t c e p s e r n i e m o c n I e r i H r e t r a h C i e s a e L e c n a n F m o r f e m o c n I h s A y l F f o e a S l l a o C f o e a S l n o i t a r e n e G r e w o P f o e a S l s e c i v r e S / s d o o G f o e r u t a N . t n e m g e s e b a t r o p e r l s r a l u c i t r a P i , t n e m p u q E d n a t n a P l , s g n d i l i u B , d n a L f o l a t n e R i s n o i t u b i r t n o C e n L e c i v r e S f o n o i t a s i t r o m A s t i d e r C y r d n u S d n a e u n e v e R s u o e n a l l e c s i M ) A ( l a t o T . 5 9 4 4 2 2 , . 4 4 1 0 4 2 , s e l b a w e n e R r e w o P f o e a S l 7 8 7 2 . . 8 8 9 2 s e c i v r e S t n e m e g a n a M n o i t a r e p O / t c e o r P j . 9 6 4 1 2 1 , . 7 0 5 2 4 1 , 7 1 2 . 3 1 6 4 . 6 9 9 3 . l i N l i N l i N l i N l i N 9 9 1 . . 5 3 9 4 . 2 6 8 3 l i N l i N l i N l i N l i N . 7 7 5 7 5 3 , . 5 3 6 4 9 3 , t n e m e e r g A n o i s s e c n o C e c i v r e S m o r f e m o c n I e c n a n F i i e s a e L e c n a n F m o r f e m o c n I d e r e d n e R s e c i v r e S f o t c e p s e r n i e m o c n I s e t a c fi i t r e c C E R f o e a S l s t c u d o r P r a o S f o e a S l l . c t e i , t n e m p u q E d n a t n a P l , s g n d i l i u B , d n a L f o l a t n e R s t i d e r C y r d n u S d n a e u n e v e R s u o e n a l l e c s i M s t n a r G l a t i p a C f o n o i t a s i t r o m A s t i d e r C n o b r a C f o e a S l ) B ( l a t o T 421 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 9 1 0 2 e r o r c ₹ 0 2 0 2 e r o r c ₹ 9 1 0 2 e r o r c ₹ 0 2 0 2 e r o r c ₹ 9 1 0 2 e r o r c ₹ 0 2 0 2 e r o r c ₹ 9 1 0 2 e r o r c ₹ 0 2 0 2 e r o r c ₹ 9 1 0 2 e r o r c ₹ 0 2 0 2 e r o r c ₹ r a e y e h t r o F r a e y e h t r o F r a e y e h t r o F r a e y e h t r o F r a e y e h t r o F r a e y e h t r o F r a e y e h t r o F r a e y e h t r o F r a e y e h t r o F r a e y e h t r o F d e d n e d e d n e d e d n e d e d n e d e d n e d e d n e d e d n e d e d n e d e d n e d e d n e , h c r a M t s 1 3 , h c r a M t s 1 3 , h c r a M t s 1 3 , h c r a M t s 1 3 , h c r a M t s 1 3 , h c r a M t s 1 3 , h c r a M t s 1 3 , h c r a M t s 1 3 , h c r a M t s 1 3 , h c r a M t s 1 3 l a t o T t n e m g e S r e t n I t n e m g e S r e t n I e r o f e B ( ) n o i t a n m i i l E l a t o T s r e m o t s u C h t i w s t c a r t n o C s r e m o t s u C h t i w m o r f e u n e v e R n a h t r e h t O s t c a r t n o C m o r f e u n e v e R . 0 2 2 1 8 3 1 , . 2 3 9 6 8 3 1 , 4 5 3 2 . 0 2 7 9 . 3 8 0 . 8 9 2 . 2 0 0 . 9 8 3 . 4 7 0 . 2 9 2 8 . 7 6 9 1 . . 7 2 3 0 1 5 9 0 . 1 0 1 . 9 0 0 . 3 5 4 . 5 7 0 . 4 6 8 3 . . 4 9 0 5 1 4 0 9 8 . 2 1 6 3 . . ) 9 6 8 8 1 ( . 6 2 7 4 1 4 1 , . 0 7 2 0 0 4 1 , 1 0 2 . 3 2 9 4 . 9 3 5 1 . . 5 1 5 5 1 l i N 8 2 1 . 5 0 2 . 8 6 3 . 1 6 1 . 7 3 4 4 . 2 2 5 1 . . 9 5 5 7 1 l i N l i N 4 8 1 . 4 3 4 . . 9 7 8 2 2 . 7 9 2 4 2 l i N l i N 1 0 0 . 8 6 0 . 9 6 0 . 7 1 4 . 7 7 0 . 8 1 5 . 0 3 0 . 2 4 0 1 . l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N 4 2 5 . 4 2 5 . l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N 4 1 0 . l i N 6 6 7 . l i N 9 9 1 . 7 7 2 . l i N l i N . 0 2 2 1 8 3 1 , . 2 3 9 6 8 3 1 , 4 5 3 2 . 0 2 7 9 . 3 8 0 . 8 9 2 . 2 0 0 . 9 8 3 . 4 7 0 . 2 9 2 8 . 7 6 9 1 . . 7 2 3 0 1 5 9 0 . 1 0 1 . 9 0 0 . 3 5 4 . 5 7 0 . 4 6 8 3 . . 4 9 0 5 1 4 0 9 8 . 2 1 6 3 . . ) 9 6 8 8 1 ( . 6 2 7 4 1 4 1 , . 0 7 2 0 0 4 1 , 1 0 2 . 3 2 9 4 . 9 3 5 1 . . 5 1 5 5 1 8 2 1 . 4 2 5 . 5 0 2 . 8 6 3 . 5 7 1 . 7 3 4 4 . 2 2 5 1 . . 5 2 3 8 1 9 9 1 . 7 7 2 . 4 8 1 . 4 3 4 . l i N l i N l i N l i N l i N l i N 9 8 3 . 4 7 0 . 2 9 2 8 . 7 6 9 1 . . 7 2 3 0 1 . 9 4 0 1 2 l i N l i N l i N l i N 8 2 1 . 4 2 5 . 5 0 2 . 8 6 3 . l i N l i N l i N l i N l i N l i N 3 5 4 . 5 7 0 . 4 0 9 8 . 2 1 6 3 . . ) 9 6 8 8 1 ( ) 5 2 8 5 ( . l i N l i N l i N l i N 9 9 1 . 7 7 2 . 4 8 1 . 4 3 4 . . 0 2 2 1 8 3 1 , . 2 3 9 6 8 3 1 , 4 5 3 2 . 0 2 7 9 . 3 8 0 . 8 9 2 . 2 0 0 . l i N l i N l i N l i N l i N 5 9 0 . 1 0 1 . 9 0 0 . l i N l i N l i N l i N l i N . 4 6 8 3 . 4 9 0 5 1 . 7 7 6 3 9 3 1 , . 5 9 0 6 0 4 1 , 1 0 2 . 3 2 9 4 . 9 3 5 1 . . 5 1 5 5 1 l i N l i N l i N l i N 5 7 1 . . 7 3 4 4 . 2 2 5 1 . 5 2 3 8 1 l i N l i N l i N l i N 6 5 2 1 . . 3 0 4 3 2 . 3 5 5 5 2 5 2 2 1 . 4 9 0 1 . . 8 7 1 2 2 . 9 5 4 4 2 l i N l i N l i N l i N l i N l i N l i N 1 0 0 . 8 6 0 . 9 6 0 . 7 1 4 . 7 7 0 . 8 1 5 . 0 3 0 . 2 4 0 1 . l i N l i N 1 0 0 . 8 6 0 . 9 6 0 . l i N 7 7 0 . l i N 0 3 0 . 7 0 1 . l i N l i N l i N l i N l i N 7 1 4 . l i N 8 1 5 . l i N 5 3 9 . . c t e . 3 3 4 8 9 9 2 , . 8 6 7 4 9 8 2 , . 0 2 3 5 6 3 , . 6 1 1 3 8 3 , . 3 5 7 3 6 3 3 , . 4 8 8 7 7 2 3 , . 7 9 9 7 3 . 8 2 7 1 1 . 6 5 7 5 2 3 3 , . 6 5 1 6 6 2 3 , t n e m e e r g A n o i s s e c n o C e c i v r e S m o r f e m o c n I e c n a n F i r e w o P f o n o i t u b i r t s i D d n a n o i s s i m s n a r T s e c i v r e S t n e m e g a n a M n o i t a r e p O / t c e o r P j d e r e d n e R s e c i v r e S f o t c e p s e r n i e m o c n I r e w o P f o e a S l i g n d a r T - s t c u d o r P f o e a S l s e t a c fi i t r e c C E R f o e a S l s r a l u c i t r a P . c t e . c t e i , t n e m p u q E d n a t n a P l , s g n d i l i u B , d n a L f o l a t n e R s e c n a a B l l a r r e f e D y r o t a u g e R n l i t n e m e v o m t e N i s n o i t u b i r t n o C e n L e c i v r e S f o n o i t a s i t r o m A s t i d e r C y r d n u S d n a e u n e v e R s u o e n a l l e c s i M s t n a r G l a t i p a C f o n o i t a s i t r o m A s e c i v r e S t n e m e g a n a M n o i t a r e p O / t c e o r P j ) C ( l a t o T s r e h t O d e r e d n e R s e c i v r e S f o t c e p s e r n i e m o c n I g n i l l i a n m r e T & e g a r o t S m o r f e m o c n I s t c u d o r P c i n o r t c e E f o e a S l l i , t n e m p u q E d n a t n a P l , s g n d i l i u B , d n a L f o l a t n e R s t i s o p e D e t a r o p r o c - r e t n I n o t s e r e t n I I C O T V F t a d e r u s a e m s t n e m t s e v n I y t i u q E m o r f d n e d v D i i L P T V F t a d e r u s a e m - t n e m t s e v n I t n e r r u C f o e a s n o t fi o r P l e l b a c o l l a n U ) D ( l a t o T i , t n e m p u q E d n a t n a P l , s g n d i l i u B , d n a L f o l a t n e R s e c i v r e S t n e m e g a n a M n o i t a r e p O / t c e o r P j s t i d e r C y r d n u S d n a e u n e v e R s u o e n a l l e c s i M d e r e d n e R s e c i v r e S f o t c e p s e r n i e m o c n I s n o i t a r e p O d e u n i t n o C m o r f e u n e v e R ) E + D + C + B + A ( ) E ( l a t o T . 9 6 3 4 1 . 4 7 3 4 3 l i N l i N . 9 6 3 4 1 . 4 7 3 4 3 l i N l i N . 9 6 3 4 1 . 4 7 3 4 3 ) F ( s n o i t a r e p O d e u n i t n o c s i D m o r f e u n e v e R s t n e m e t a t S l a i c n a n i F d e t a d i l o s n o C e h t o t s e t o N ) . d t n o C ( s n o i t a r e p O m o r f e u n e v e R . 8 2 422 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 28. Revenue from Operations (Contd.) Reconciliation of Revenue Revenue from Continued Operations as per above Net movement in Regulatory Deferral Balances Total Revenue from Operations Contract Balances Contract Assets Recoverable from Consumers Non-Current Current Unbilled Revenue other than passage of time Total Contract Assets Contract Liabilities Deferred Revenue Liability Non-Current Current Advance from Consumers Non-Current Current Liabilities towards Consumers Non-Current Current Total Contract Liabilities Receivables Trade Receivables (Gross) Non-Current Current Recoverable from Consumers Current Unbilled Revenue for passage of time Non-Current Current (Less): Allowances for Doubtful Debts Non-Current Current Net Receivables Total For the year ended 31st March, 2020 K crore For the year ended 31st March, 2019 K crore 28,947.68 188.69 29,136.37 29,984.33 (103.27) 29,881.06 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 960.84 Nil 30.07 990.91 404.79 1,100.54 11.15 1,516.48 683.43 41.62 0.11 501.21 Nil 195.96 1,422.33 34.83 4,859.41 232.17 95.33 799.42 (4.55) (433.51) 5,583.10 7,996.34 555.70 23.52 0.21 330.20 Nil 11.50 921.13 197.54 4,836.73 Nil 81.11 837.85 (4.55) (391.47) 5,557.21 7,994.82 Contract assets A contract asset is the right to consideration in exchange for goods or services transferred to the customer. Contract assets are transferred to receivables when the rights become unconditional. 423 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 28. Revenue from Operations (Contd.) Contract liability A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the performance obligation is satisfied. Significant changes in the contract assets and the contract liabilities balances during the year are as follows: Movement in Recoverable from consumers and Liabilities towards consumers Particulars Opening Balance - Recoverable from consumers - Liabilities towards consumers Income to be adjusted in future tariff determination (Net) Income to be adjusted in future tariff determination (Net) in respect of earlier years Refund to Customers (including Group's Distribution Business) Deferred tax recoverable/(payable) Deferred tax recoverable/(payable) on account of new tax regime Revenue recognised during the year Transfer to receivables Others Closing Balance - Recoverable from consumers - Liabilities towards consumers As at 31st March, 2020 As at 31st March, 2019 ₹ crore ₹ crore 1,505.33 (11.50) 1,493.83 (665.32) 5.49 48.87 31.41 (167.00) 573.67 (600.52) 44.45 (728.95) 960.84 (195.96) 764.88 1,310.63 (402.75) 907.88 226.06 (182.31) 288.71 322.50 Nil 679.60 (736.52) (12.09) 585.95 1,505.33 (11.50) 1,493.83 (A) (B) (A+B) Movement in Unbilled Revenue other than passage of time, Advance from consumers and Deferred Revenue Liabilities Particulars Opening Balance - Unbilled Revenue other than passage of time - Advance from consumers - Deferred Revenue Liabilities Revenue recognised during the year Advance received during the year Interest for the year Transfer to receivables Closing Balance - Unbilled Revenue other than passage of time - Advance from consumers - Deferred Revenue Liabilities 424 As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 11.15 330.41 579.22 920.78 (172.28) 486.41 75.03 (53.50) 335.66 30.07 501.32 725.05 1,256.44 Nil 213.87 458.07 671.94 (158.28) 392.43 45.57 (30.88) 248.84 11.15 330.41 579.22 920.78 (A) (B) (A+B) The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 29. Other Income Accounting Policy Dividend income from investments is recognised when the shareholder's right to receive payment has been established. Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition. Consumers are billed on a monthly basis and are given average credit period of 30 to 45 days for payment. No delayed payment charges ('DPC') is charged for the initial 30 days from the date of receipt of invoice by customer. Thereafter, DPC is charged at the rate prescribed by the Power Purchase Agreement on the outstanding balance once the dues are received. Revenue in respect of delayed payment charges and interest on delayed payments leviable as per the relevant contracts are recognised on actual realisation or accrued based on an assessment of certainty of realization supported by either an acknowledgement from customers or on receipt of favourable order from regulatory authorities. (a) Interest Income (i) Financial Assets held at Amortised Cost Interest on Banks Deposits Interest from Inter-corporate Deposits Interest on Overdue Trade Receivables Interest on Non-current Investment - Contingency Reserve Fund Interest on Non-current Investment - Deferred Tax Liability Fund Interest on Loans to Joint Controlled Entity Interest on Loans and Advances (ii) Interest on Income-Tax Refund (b) Dividend Income From Non-current Investments measured at FVTPL (c) Gain/(Loss) on Investments Gain on Sale of Current Investment measured at FVTPL Gain on Sale of Investment in Associates measured at Cost (d) Other Non-operating Income Discount amortised/accrued on Bonds (Net) Commission earned Gain/(Loss) on Disposal of Property, Plant and Equipment (Net) Delayed Payment Charges Other Income Management Fees For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019 ₹ crore 18.11 Nil 66.41 12.64 7.53 0.63 15.01 120.33 17.71 138.04 85.75 85.75 42.26 11.13 53.39 0.03 8.76 (21.83) 49.45 113.92 135.10 285.43 13.87 0.12 3.16 16.70 20.40 1.24 13.59 69.08 7.18 76.26 5.42 5.42 44.36 0.88 45.24 Nil 9.83 (30.05) 87.48 Nil 191.97 259.23 Total 562.61 386.15 425 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 30. Raw Materials Consumed and Decrease/(Increase) in Work-in-Progress/Finished Goods/ Stock-in-Trade Raw Materials Consumed Opening Stock Add: Purchases Less: Closing Stock Total Decrease/(Increase) in Work-in-Progress/Finished Goods/Stock-in-Trade Work-in-Progress Inventory at the beginning of the year Less: Inventory at the end of the year Finished Goods Inventory at the beginning of the year Less: Inventory at the end of the year Total 31. Employee Benefits Expense Salaries and Wages Contribution to Provident Fund [Refer Note 25(1)] Contribution to Superannuation Fund [Refer Note 25(1)] Gratuity [Refer Note 25 (2.3)] Leave Encashment Scheme Pension Staff Welfare Expenses Less: Employee Cost Capitalised Employee Cost Inventorised Total 426 For the year ended 31st March, 2020 For the year ended 31st March, 2019 ₹ crore ₹ crore 156.89 998.09 1,154.98 197.80 957.18 133.05 943.19 1,076.24 156.89 919.35 2.93 3.99 (1.06) 82.41 96.99 (14.58) (15.64) 6.36 2.93 3.43 103.35 82.41 20.94 24.37 For the year ended 31st March, 2020 For the year ended 31st March, 2019 ₹ crore ₹ crore 1,214.92 1,198.75 89.03 10.75 26.17 35.80 13.35 83.52 10.63 18.78 27.35 15.93 151.03 1,541.05 142.64 1,497.60 90.42 9.99 100.41 149.50 9.05 158.55 1,440.64 1,339.05 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 32. Finance Costs Accounting Policy Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in statement of profit and loss in the period in which they are incurred. (a) Interest Expense: On Borrowings - At Amortised Cost Interest on Debentures Interest on Loans - Banks and Financial Institutions Interest paid to Joint Ventures Others Interest on Consumer Security Deposits (Carried at Amortised Cost) Other Interest and Commitment Charges [Refer Note 37 (d)] Interest on Lease Liability - At Amortised cost Interest on Non-convertible Cumulative Redeemable Preference Shares Less: Interest Capitalised (b) Other Borrowing Cost: Loss/(Gain) arising on Interest Rate Swap derivative contracts designated as hedging instruments in fair value hedges Other Finance Costs Foreign Exchange Loss/(Gain) on Borrowings (Net) (Less): Finance Charges Capitalised Total Note: For the year ended 31st March, 2020 For the year ended 31st March, 2019 ₹ crore ₹ crore 1,076.67 2,786.76 52.42 81.84 57.08 308.73 Nil 4,363.50 42.50 4,321.00 1.54 181.57 (0.88) (9.50) 172.73 906.77 2,658.33 73.60 72.56 125.78 Nil 35.46 3,872.50 47.35 3,825.15 (7.91) 151.96 221.84 (21.04) 344.85 4,493.73 4,170.00 The weighted average capitalisation rate on the Group's general borrowings is in the range of 7.74% to 8.63% p.a. (31st March, 2019 - 8.28% to 8.63% p.a.). 427 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 33. Other Expenses Consumption of Stores, Oil, etc. Rental of Land, Buildings, Plant and Equipment, etc. Repairs and Maintenance - (i) To Buildings and Civil Works (ii) To Machinery and Hydraulic Works (iii) To Furniture, Vehicles, etc. Rates and Taxes Insurance Other Operation Expenses Ash Disposal Expenses Warranty Charges Travelling and Conveyance Expenses Consultants' Fees Compensation Auditors' Remuneration Cost of Services Procured Agency Commission Bad Debts Allowance for Doubtful Debts and Advances (Net) Provision For Contingencies Net Loss on Foreign Exchange Impairment in Carrying Amount of Non-current Investments in Joint Ventures MTM (Profit)/Loss on Investments carried at Fair value through Profit or loss (Profit)/Loss on Sale of Non-current Investments in Joint Ventures accounted using Equity method Donations Legal Charges Corporate Social Responsibility Expenses Transfer to Contingency Reserve Marketing Expenses Miscellaneous Expenses For the year ended 31st March, 2020 For the year ended 31st March, 2019 ₹ crore 150.04 25.57 115.55 653.28 69.54 838.37 108.47 96.88 366.01 53.58 10.45 51.39 38.42 (0.41) 12.87 279.94 1.84 23.62 16.80 Nil 116.21 Nil Nil 0.77 NIl 52.92 34.32 17.00 3.11 44.61 2,342.78 ₹ crore 88.90 113.81 119.41 512.95 73.22 705.58 91.58 65.76 381.06 47.81 15.14 56.09 54.00 2.36 11.34 239.30 Nil 2.09 72.54 0.06 140.81 (2.48) 1.18 Nil 20.00 54.51 39.46 16.00 1.80 41.45 2,260.15 34. Income Taxes 34 a. Current Tax Accounting Policy Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the respective subsidiary companies operates and generates taxable income. Current income tax relating to items recognised outside statement of profit and loss is recognised outside statement of profit and loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. 428 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 34. Income Taxes (Contd.) (i) Income taxes recognised in Statement of Profit and Loss - Continuing Operations Current Tax Deferred Tax (Refer Note 12a. & 12b.) Deferred Tax in respect of earlier years (Refer Note 12a. & 12b.) Remeasurement of Deferred Tax on account of New Tax Regime (Net) Total income tax expense recognised in the current year 31st March, 2020 ₹ crore 31st March, 2019 ₹ crore 494.30 330.95 (24.51) (159.25) 641.49 524.66 544.02 18.91 Nil 1,087.59 (ii) Income taxes recognised in Statement of Profit and Loss - Discontinued Operations Current tax Deferred tax Total income tax expense recognised in the current year 31st March, 2020 ₹ crore 31st March, 2019 ₹ crore Nil (32.41) (32.41) (71.92) 5.94 (65.98) The income tax expense for the year can be reconciled to the accounting profit as follows: Profit/(Loss) before tax for Continuing Operation Profit/(Loss) before tax for Discontinued Operation Profit/(Loss) before tax considered for tax working Income tax expense calculated at 34.944% Add/(Less) tax effect on account of : Share of profit of Associate and Joint venture Deferred tax not recognised on Impairment provision/(reversal) of non current investment Deduction / Reversal during tax holiday period MAT credit and deferred tax asset on losses pertaining to earlier years Exempt Income MAT credit and deferred tax asset on losses not recognised Profit taxable at different tax rates including for certain subsidiaries Non deductible expenses Change in presentation of deferred tax recoverable/payable Tax in respect of earlier years Changes in tax on account of impact of tax ordinance (Refer Note 12) Tax benefit on interest on perpetual securities recognised in equity Income tax expense recognised in Statement of Profit and Loss Tax expense for Continuing Operations Tax expense for Discontinued Operations Income tax expense recognised in Statement of Profit and Loss 31st March, 2020 ₹ crore 31st March, 2019 ₹ crore 2,368.16 (442.64) 1,925.52 672.85 3,819.09 (191.82) 3,627.27 1,267.51 (332.86) (489.86) 45.36 24.36 (92.82) (126.92) 351.68 156.45 94.74 Nil (24.51) (159.25) Nil 609.08 641.49 (32.41) 609.08 26.09 (0.59) (72.75) (16.84) 706.78 (291.81) 106.08 (171.79) 18.91 Nil (60.12) 1,021.61 1,087.59 (65.98) 1,021.61 Note: 1 The tax rate used for the years 2019-20 and 2018-19 reconciliations above is the corporate tax rate of 34.944%, as payable by Parent Company in India on taxable profits under the Indian tax law. 2 The rate used for calculation of Deferred tax has been considered basis the Standalone Ind AS financials statements of Parent Company and its respective subsidiaries, being statutory enacted rates at Balance Sheet date. 429 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 34. Income Taxes (Contd.) (iii) Income tax recognised in Other Comprehensive Income Current Tax Net gain on sale of investment in equity shares at FVTOCI Less : Remeasurement of Defined Benefit Plan Discontinued Operations Deferred Tax Net fair value gain on investments in equity shares at FVTOCI Remeasurements of defined benefit obligation Effective portion of cash flow hedge 31st March, 2020 ₹ crore 31st March, 2019 ₹ crore Nil (13.22) (13.22) Nil Nil (13.73) 32.43 18.70 1.14 (7.95) (6.81) (0.40) 0.02 0.04 Nil 0.06 Total income tax recognised in Other Comprehensive Income 5.48 (7.15) Bifurcation of the income tax recognised in other comprehensive income into: Items that will not be reclassified to Statement of Profit and Loss Items that will be reclassified to Statement of Profit and Loss 35. Commitments: (a) Estimated amount of Contracts remaining to be executed on capital account and not provided for (including consumer funded assets). (i) the Group (ii) Group's share of Joint Ventures (iii) Group's share of Associates (b) Other Commitments (26.95) 32.43 5.48 (7.15) Nil (7.15) 31st March, 2020 ₹ crore 31st March, 2019 ₹ crore 1,995.12 218.46 45.32 1,098.27 214.49 18.04 (i) The Group has given an undertaking for non-disposal of shares to the lenders of Tata Power Delhi Distribution Ltd. in respect of its outstanding borrowings. (ii) Vendor purchase commitments and contracts to provide future post sale services. Nil 1,273.20 137.50 494.50 (iii) In terms of pre-implementation agreement entered into with Government of Himachal Pradesh and the consortium consisting of the Group and SN Power Holding Singapore Pte. Ltd. (Group being the Lead Member of the consortium) for the investigation and implementation of Dugar Hydro Electric Project, the Group has undertaken as Lead Member to undertake/perform various obligations pertaining to Dugar Project. 430 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 36. Contingent Liabilities a) Contingent liabilities 31st March, 2020 31st March, 2019 ₹ crore ₹ crore Claims against the Group not probable and hence not acknowledged as debts consists of (i) (a) Disallowance of carrying cost and other costs by Appellate Tribunal for Electricity (ATE) has been disputed by the Group. Based on legal opinions (the Group has a strong case), the Group has filed Special Leave Petition (SLP) with the Hon'ble Supreme Court. (b) Disallowance of costs recoverable from consumers by Maharashtra Electricity Regulatory Commission in the tariff true up order (ii) Interest and penalty pertaining to Customs Duty claims disputed by the Group relating to applicability and classification of coal (iii) Demand disputed by the Group relating to Service tax (iv) Way Leave fees (including interest) claims disputed by the Group relating to rates charged. (v) (vi) (vii) (viii) (ix) (x) Rates, Cess, Green Cess, Excise and Custom Duty claims disputed by the Group. Octroi claims disputed by the Group, in respect of octroi exemption claimed. Compensation disputed by private land owners in respect of private land acquired under the provisions of Maharashtra Industrial Development Act, 1961. Disputes relating to power purchase agreements Other Claims Demand towards charges for Unscheduled interchanged (UI) of power (Refer Note d below) (xi) Access Charges demand for laying underground cables Claims against the Group's share of Joint Ventures and Group's share of Associates not acknowledged as debts consists of Group's share of Joint Ventures (i) Demand for royalty payment is set-off against recoverable Value Added Tax (VAT) paid on inputs for coal production. (ii) Other claims Group's share of Associates Other claims Notes: 269.00 359.85 110.81 375.29 43.18 587.05 5.03 22.00 161.33 160.19 Nil 30.14 269.00 261.00 110.81 402.45 39.18 523.49 5.03 22.00 199.23 173.75 215.02 Nil 51.70 37.00 29.24 40.79 232.62 237.67 2,445.19 2,528.66 1. Amounts in respect of employee related claims/disputes, regulatory matters is not ascertainable. 2. Future cash flows in respect of above matters are determinable only on receipt of judgements/decisions pending at various forums/authorities. 3. The above Contingent Liabilities include those pertaining to Regulated Business which on unfavourable outcome can be recovered from consumers. 431 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 36. Contingent Liabilities (Contd.) b) Other Contingent Liabilities (not probable): Taxation matters for which liability, relating to issues of deductibility and taxability, is disputed by the Group and provision is not made (computed on the basis of assessments which have been re-opened and assessments remaining to be completed) In case of the Group [including interest demanded ₹ 9.19 crore (31st March, 2019 - ₹ 9.09 crore)]. Group's share of Joint Ventures Group's share of Associates c) Indirect exposures of the Group: The Group has pledged its shares of investments in joint ventures and others with the lenders for borrowings availed Joint Ventures Powerlinks Transmission Ltd. Industrial Energy Ltd. Mandakini Coal Company Ltd. Itezhi Tezhi Power Corporation 31st March, 2020 ₹ crore 31st March, 2019 ₹ crore 188.73 114.30 2.50 640.03 84.17 2.50 31st March, 2020 Nos. 31st March, 2019 Nos. 23,86,80,000 25,13,48,400 2,00,43,000 4,52,500 23,86,80,000 25,13,48,400 2,00,43,000 4,52,500 d) In the previous year, Maharashtra State Electricity Distribution Company Limited (MSEDCL) had raised a demand of ₹ 215.02 crore for determination of fixed charges for unscheduled interchange of power. Group had filed a petition against the said demand. During the year, MERC has turned down methodology adopted by MSEDCL for determination of such charges and ordered MSEDCL to submit certain details to Maharashtra State Load Dispatch Centre (MSLDC) to determine the revised charges based on principles suggested in the Order. Considering the same, currently, the amount of charges payable is not ascertainable and hence, no provision has been recognized during the year. Further, in case of unfavourable outcome, the Group believes that it will be allowed to recover the same from consumers through future adjustment in tariff. e) The proposed Social Security Code, 2019, when promulgated, would subsume labour laws including Employees' Provident Funds and Miscellaneous Provisions Act and amend the definition of wages on which the organisation and its employees are to contribute towards Provident Fund. The Group believes that there will be no significant impact on its contributions to Provident Fund due to the proposed amendments. There were many interpretative issues relating to the Supreme Court (SC) judgement dated 28th February, 2019 on Provident Fund (PF) as regards definition of PF wages and inclusion of certain allowances for the purpose of PF contribution, as well as effective date of its applicability. Having consulted and evaluated impact on its financial statement, the Group has implemented the changes as per clarifications vide the Apex Court judgement dated 28 February 2019, with effect from 1st March 2019 i.e., immediate after pronouncement of the judgement, as part of statutory compliance. The Group will evaluate its position and act, in case there is any other interpretation of the same issued in future either in form of Social Security Code or by authorities concerned under the Employees' Provident Funds and Miscellaneous Provisions Act. The Group, in respect of the above mentioned Contingent Liabilities has assessed that it is only possible but not probable that outflow of economic resources will be required. 432 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 37. Other Disputes and Settlements a) The Group is required to comply with ash disposal requirements in accordance with the requirements of the Environment Clearance (EC) and the relevant notifications issued by the Ministry of Environment & Forests (MOEF) from time to time. On 12th February, 2020, National Green Tribunal (NGT) has passed an order prescribing the formula for determination of Environment Compensation for non-compliance. The order is subject to proceedings pending before the Hon’ble Supreme Court and is listed for further hearing in NGT on 8th July, 2020. The Group has been making concerted efforts in this regard and has achieved 100% utilisation of fly ash generated during the current year. During the year, pending the final order in National Green Tribunal and the results of the proceedings in Supreme Court, the Group has recognised a provision of ₹ 4.74 crore in its financial statements for disposal of past accumulated flyash based on management’s best assessment of the expected costs. b) The Group had obtained 21.65 acres of land through registered lease deed for 33 years for setting up a solar power plant in Bihar. During the financial year 2018-19, the lease was treated by the Collector, Gaya as illegal for entering into lease without order of any competent authority, and was cancelled along with recovery of penal rent. The Group filed Writ Petition before the Patna High Court against the said Order. The Patna High Court stayed the operations of the Collectors Order and provided certain time to file the counter affidavit. The Group is of the view that it has a good case with likelihood of liability or any loss arising out of the said cancellation being remote. Accordingly, pending settlement of the legal dispute, no adjustment has been made in the financial statements for the year ended 31st March, 2020. c) The liability stated in the opening Balance Sheet of one of the subsidiary company as per the Transfer Scheme as on 1st July, 2002 in respect of consumers’ security deposit was ₹ 10.00 crore. The subsidiary company had engaged an independent agency to validate the sample data in digitized form of consumer security deposit received by the erstwhile DVB from its consumers. As per the validation report submitted by this agency the amount of security deposit received from consumers aggregated to ₹ 66.71 crore. The subsidiary company has been advised that as per the Transfer Scheme, the liability in excess of ₹ 10.00 crore towards refund of the opening consumer deposits and interest thereon is not to the account of the Group. Since the GNCTD was of the view that the aforesaid liability is that of the Group, the matter was referred to Delhi Electricity Regulatory Commission (DERC). During the year 2007-08, DERC vide its letter dated 23rd April, 2007 conveyed its decision to the GNCTD upholding the Group’s view. As GNCTD has refused to accept the DERC decision as binding on it, the subsidiary company has filed a writ petition in the Hon’ble Delhi High Court and the matter was made regular on 24th October, 2011. No stay has been granted by the High Court in the matter for refund of consumer security deposits and payment of interest thereon. d) In the earlier years, the Group had received demands in respect of entry tax on imports of fuel for Trombay plant. During the year ended 31st March, 2019, the Group had recognised provision of ₹ 345.00 crore (including interest and provision for contingency of ₹ 78.00 crore and ₹ 45.00 crore respectvely) towards settlement of entry tax demands under the Amnesty scheme notified by the Government of Maharastra. Further during the year, the Group has received final settlement order under the said scheme and pursuant to the said order, the Group has reversed the excess provision related to entry tax under the head ‘Cost of Fuel’ and corresponding recovery from customers under the head ‘Revenue from Operations' amounting to ₹ 68.78 crore. e) With respect to Standby litigation with Adani Electricity Mumbai Limited (Adani Electricity), the Hon'ble Supreme Court during the year ended 31st March, 2020 has upheld Appellat Tribunal for Electricity (APTEL) order dated 20th December, 2006 directing the Group to pay ₹ 354.00 crore along with interest at 10% p.a. from 1st April, 2004 upto the date of payment. In the past, in accordance with the Hon'ble Supreme Court directives the Group has deposited ₹ 227.00 crore with the Registrar General of the Court which was withdrawn by Adani Electricity on furnishing the required undertaking to the Court. Consequently, the Group has recognized an expense of ₹ 276.35 crore net of amount recoverable from customers including adjustment with consumer reserves and security deposit. f) The Group have acquired private land for setting up solar power plants. In certain cases, these acquisitions have been challenged on grounds such as unauthorised encroachment, inadequate compensation, seller not entitled to transact and/or consideration has not been paid to all legal/ beneficial owners. In these cases, the Group has not received any demand for additional payment and these cases are pending at District Court/High Court Level. The Management believes that the Group has a strong case and outflow of economic resources is not probable. 433 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 37. Other Disputes and Settlements (Contd.) g) One of the subsidiary company had introduced a Voluntary Separation Scheme (VSS) for its employees in December 2003, in response to which initially 1,798 employees were separated. The early retirement of these employees led to a dispute between the subsidiary company and the DVB Employees Terminal Benefit Fund, 2002 (‘the Trust’) with respect to payout of retirement benefits that these employees were eligible for. The Trust is of the view that its liability to pay retiral benefits arises only on the employee attaining the age of superannuation or on death, whichever is earlier. The subsidiary company filed a writ petition with the Hon’ble Delhi High Court which pronounced its judgement on 2nd July, 2007 on this issue and provided two options to the Discoms for paying retiral benefits to the Trust. The subsidiary company chose the option whereby the Discoms were required to pay to the Trust an ‘Additional Contribution’ on account of premature payout by the Trust which shall be computed by an Arbitral Tribunal of Actuaries to be appointed within a stipulated period. The matter was further challenged by the Trust before Hon’ble Supreme Court, however, no interim relief has been granted by the Hon’ble Supreme Court. Till date no Arbitral Tribunal of Actuaries has been appointed and therefore, no liability has been recorded based on option chosen by the subsidiary company. While the above referred writ petition was pending, the subsidiary company had already advanced ₹ 77.74 crore to the Special Voluntary Retirement Scheme Retirees Terminal Benefit Fund, 2004 Trust (SVRS Trust) for payment of retiral dues to separated employees. In addition to the payment of retiral benefits/residual pension to the SVRS Trust, in pursuant to the order of the Hon’ble Delhi High Court dated 2nd July, 2007 the subsidiary company also paid interest @ 8% per annum, ₹ 8.01 crore in the financial year 2008-09 thereby increasing the total contribution to the SVRS Trust to ₹ 85.76 crore recognised as recoverable from SVRS Trust. As the subsidiary company was entitled to get reimbursement against advanced retiral benefit amount on superannuation age, the subsidiary company had recovered/adjusted ₹ 84.88 crore as at 31st March, 2020 (as at 31st March, 2019 ₹ 84.73 crore), leaving a balance recoverable ₹ 0.88 crore as at 31st March, 2020 (as at 31st March, 2019 ₹ 1.03 crore) from the SVRS Trust which includes current portion of ₹ 0.33 crore (as at 31st March, 2019 ₹ 0.13 crore). 38. Earnings Per Share (EPS) Accounting Policy Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Group by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Group by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors. Particulars 31st March, 2020 ₹ crore# 31st March, 2019 ₹ crore#* A. EPS - Continuing operations (before net movement in Regulatory Deferral Balances) Total Profit from Continuing Operations attributable to the owners of the Parent Company Add/(Less):(Profit)/Loss for the Year from Discontinued Operations attributable to the owners of the Parent Company Net Profit from Continuing Operations Net movement in Regulatory Deferral Balances Remeasurement of Deferred Tax Recoverable on account of New Tax Regime (Net) (Refer Note 12) Income-tax attributable to Regulatory Deferral Balances A B C D 1,017.38 2,356.19 410.23 1,427.61 (188.69) (98.00) 100.19 125.84 2,482.03 103.27 Nil (36.09) 434 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 38. Earnings Per Share (EPS) (Contd.) Particulars Net movement in Regulatory Deferral Balances (Net of tax) Net Profit (before net movement in Regulatory Deferral Balances) (Less): Distribution on Perpetual Securities Profit/(Loss) from Continuing Operations attributable to equity shareholders (before net movement in Regulatory Deferral Balances) Weighted average number of equity shares for Basic and Diluted EPS EPS - Continuing Operations (before net movement in Regulatory Deferral Balances) - Basic and Diluted (In ₹) 31st March, 2020 ₹ crore# 31st March, 2019 ₹ crore#* E=(B+C+D) F=(A-E) G (186.50) 1,614.11 (171.00) 67.18 2,414.85 (171.00) H=(F+G) 1443.11 2,243.85 270,76,05,570 270,76,05,570 B. EPS - Continuing Operations (after net movement in Regulatory Deferral Balances) Net Profit from Continuing Operations (Less): Distribution on Perpetual Securities Profit/(Loss) attributable to equity shareholders (after net movement in Regulatory Deferral Balances) Weighted average number of equity shares for Basic and Diluted EPS EPS - Continuing operations (after net movement in Regulatory Deferral Balances) - Basic and Diluted (In ₹) C. EPS - Discontinued Operations Profit/(Loss) from Discontinued Operations Weighted average number of equity shares for Basic and Diluted EPS EPS - Discontinued Operations - Basic and Diluted (In ₹) D. EPS - Total Operations (after net movement in Regulatory Deferral Balances) Net Profit/(Loss) From Total Operations (after net movement in Regulatory Deferral Balances) Less: Distribution on Perpetual Securities Net Profit/(Loss) from total operations attributable to equity shareholders of parent (after net movement in Regulatory Deferral Balances) Weighted average number of equity shares for Basic and Diluted EPS EPS - Total Operations (after net movement in Regulatory Deferral Balances) - Basic and Diluted (In ₹) 5.33 8.29 1,427.61 (171.00) 2,482.03 (171.00) 1,256.61 2,311.03 270,76,05,570 270,76,05,570 4.64 8.54 (410.23) (125.84) 270,76,05,570 270,76,05,570 (1.52) (0.46) 1,017.38 (171.00) 2,356.19 (171.00) 846.38 2,185.19 270,76,05,570 270,76,05,570 3.12 8.08 # All numbers are in ₹ crore except weighted average number of equity shares and Basic and Diluted EPS * Restated (Refer Note 44) 435 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 39. Related Party Disclosures: The Group’s related parties primarily consists of its associates, joint ventures and Tata Sons Pvt. Ltd. including its subsidiaries and joint ventures. The Group routinely enters into transactions with these related parties in the ordinary course of business at market rates and terms. Transactions and balances between the Company, its subsidiaries and fellow subsidiaries are eliminated on consolidation. Disclosure as required by Ind AS 24 - “Related Party Disclosures” are as follows: Names of the related parties and description of relationship: (a) Related parties where control exists: Employment Benefit Funds 1) Tata Power Superannuation Fund 2) Tata Power Gratuity Fund 3) Tata Power Consolidated Provident Fund 4) M/s Maithon Power Gratuity Fund (Fund) 5) North Delhi Power Ltd. Employees Group Gratuity Assurance Scheme (Gratuity Fund) 6) Special Voluntary Retirement Scheme Retirees Terminal Benefit Fund, 2004 (SVRS RTBF - 2004) (b) Other related parties (where transactions have taken place during the year and previous year / balances outstanding) : (i) Associates 1) Tata Projects Ltd. 3) Dagacchu Hydro Power Corporation Ltd. 5) Brihat Trading Private Ltd. 2) 4) 6) Yashmun Engineers Ltd. The Associated Building Co. Ltd. Tata Communication Ltd. (ceased to be an Associate w.e.f. 28th May, 2018) 7) Panatone Finvest Ltd (Ceased to be an Associate w.e.f. 28th May, 2018) 8) Nelito Systems Ltd (ceased to be an Associate w.e.f. 6th June, 2019) (ii) Joint Venture Companies 1) 3) Tubed Coal Mines Limited Industrial Energy Limited 5) Dugar Hydro Power Limited PT Mitratama Perkasa 7) 9) 2) Mandakini Coal Company Ltd. 4) 6) 8) Powerlinks Transmission Limited Itezhi Tezhi Power Corporation Limited PT Kaltim Prima Coal IndoCoal Resources (Cayman) Limited 10) PT Indocoal Kaltim Resources 11) PT Nusa Tambang Pratama 13) PT Dwikarya Prima Abadi 15) PT Baramulti Sukessarana Tbk 17) Koromkheti Netherlands B.V 12) PT Marvel Capital Indonesia 14) PT Kalimantan Prima Power 16) Adjaristsqali Netherlands B.V 18) IndoCoal KPC Resources (Cayman) Limited 19) Resurgent Power Ventures Pte Ltd. 20) Renascent Power Ventures Private Ltd. 21) Prayagraj Power Generation Co Ltd. 22) PT Arutmin Indonesia (w.e.f. 12th December, 2019) 23) PT Indocoal Kalsel Resources 25) LTH Milcom Pvt. Ltd. 27) PT Mitratama Usaha 29) PT Guruh Agung 31) Koromkheti Georgia LLC 33) PT Antang Gunung Meratus 436 24) Candice Investments Pte. Ltd. 26) Solace Land Holding Ltd 28) PT Citra Prima Power 30) PT Citra Kusuma Perdana 32) Adjaristsqali Georgia LLC 34) Cennergi Pty. Ltd. (Ceased to be Joint Venture w.e.f. 31st March, 2020) The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 39. Related Party Disclosures: (Contd.) (c) (i) Promoters holding more than 20% - Promoter Tata Sons Pvt. Ltd. (ii) Subsidiaries and Jointly Controlled Entities of Promoters - Promoter Group (where transactions have taken place during the year and previous year / balances outstanding) : 1) Tata Business Support Services Ltd. 2) Ewart Investments Ltd. Tata AG, Zug Tata AIG General Insurance Company Ltd. Tata Capital Ltd. 3) 5) 7) 9) 11) Tata Consultancy Services Ltd. 13) Tata Consulting Engineers Ltd. 15) Tata Housing Development Company Ltd. 17) Tata Industries Ltd. (ceased to be Subsidiary and became a Joint Venture w.e.f. 27th March, 2019) 19) Tata Interactive Systems AG 21) Tata Investment Corporation Ltd. 23) Tata Realty and Infrastructure Ltd. 25) Tata Teleservices (Maharashtra) Ltd. 27) Tata Teleservices Ltd. 29) TC Travel and Services Ltd. 31) THDC Management Services Ltd. (formerly THDC Facility Management Ltd.) 33) Tata Cleantech Capital Ltd. 35) Tata Sky Ltd. 37) Tata Capital Financial Services Ltd. 39) Tata International Ltd. 41) Tata Capital Forex Ltd. (formerly TT Holdings & Services Ltd.) 43) Tata Asset Management Ltd. 45) Infiniti Retail Ltd. 47) Tata SIA Airlines Limited (d) Key Management Personnel Tata Advanced Material Ltd (ceased to be Subsidiary w.e.f. 27th March, 2019) TRIL Infopark Ltd. 4) 6) World-One Development Company Pvt. Ltd. 8) J R D Tata Trust 10) Sir Dorabji Tata Trust 12) Sir Ratan Tata Trust 14) Niskalp Infrastructure Services Ltd. (Formerly Niskalp Energy Ltd.) 16) Taj Air Ltd. 18) Tata Unistore Ltd. (Formerly Tata Industrial Services Ltd.) (ceased to be an Associate and became a Subsidiary w.e.f. 29th March,2018) 20) Ecofirst Services Ltd. 22) Progressive Electoral Trust 24) Tata Ltd. 26) Tata Communications Ltd. (ceased to be an Associate and became a Subsidiary w.e.f. 28th May,2018) 28) Tata Housing Development Co. Ltd.. Employees Provident Fund 30) Tata Consultancy Services Employees Provident Fund 32) Tata Technologies (India) Ltd. Employees Provident Fund 34) Tata Projects Provident Fund Trust 36) STT Global Data Centres India Private Ltd. (Formerly Tata Communications Data Centers Private Ltd.) (w.e.f. 28th May,2018) 38) Tata AIA Life Insurance Company Ltd. 40) Tata Advanced System Ltd. 42) Tata Communications Payment Solutions Ltd. (w.e.f. 28th May, 2018) 44) Tata International Singapore Pte. Ltd. 46) Panatone Finvest Ltd. 48) Tata Autocomp Systems Limited 1) Praveer Sinha CEO and Managing Director (w.e.f. 1st May, 2018) 2) N. Chandrasekaran 3) Ashok Sethi (ceased to be COO & Executive Director 4) Pravin H. Kutumbe w.e.f. 30th April, 2019) 5) Ramesh N. Subramanyam - Chief Financial Officer 6) Banmali Agarwala 7) Hanoz Minoo Mistry - Company Secretary 9) Anjali Bansal Kesava Menon Chandrasekhar 8) 10) Hemant Bhargava 437 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 39. Related Party Disclosures: (Contd.) 11) Nawshir H. Mirza (ceased to be Director w.e.f. 12) Vibha U. Padalkar 12th August, 2019) 13) Deepak M. Satwalekar (ceased to be Director w.e.f. 14) Sanjay V. Bhandarkar 12th August, 2019) 15) Saurabh Agrawal 17) Anil Sardana - CEO and Managing Director (ceased to be Director w.e.f. 30th April, 2018) 16) Ashok Sinha (w.e.f. 2nd May, 2019) (e) f) Relative of Key Managerial Personnel (where transactions have taken place during the year and previous year / balances outstanding) : Neville Minoo Mistry (Brother of Hanoz Minoo Mistry) Details of Transactions Particulars Associates Joint Ventures Key Management Personnel Employee Benefit Funds Promoter Group Sr. No. 1 2 3 4 5 6 7 8 9 Purchase of goods/power (Net of Discount) Sale of goods/power (Net of Discount) Purchase of property, plant & equipments Sale of property, plant & equipments Rendering of services Receiving of services Brand equity contribution Contribution to Employee Benefit Plans Remuneration paid- short term employee benefits 10 Long term employee benefits paid 11 Short term employee benefits paid 12 Interest income 13 Interest paid 14 Dividend received 15 Dividend paid 16 Guarantee commission earned 17 Loans given 438 155.19 2,954.11 125.88 2,935.59 17.55 0.15 12.84 9.69 0.05 0.08 7.25 0.16 22.22 10.94 - - - - - - 175.69 206.88 0.83 0.08 - - - - - - - - - - - - - - - - - - - - - - - - 0.63 1.24 52.29 73.75 9.68 1,861.27 9.74 210.79 - - - - - 1.00 - - - 1.18 14.57 7.05 - - - - - - - - - - - - - - - - 10.92 * 23.91 * - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 39.01 48.10 - - 2.80 # 1.15 # 0.68 # 0.55 # - - - - - - - - - - - - 8.36 0.02 54.18 72.93 0.22 3.02 - 0.05 45.81 237.45 92.37 86.49 0.07 - - - - - - - - - 0.01 0.01 35.23 26.70 1.94 1.97 1.77 1.77 - - - - ₹ crore Promoters - - - - - - 0.22 - 1.32 1.09 5.96 0.43 1.76 11.96 - - - - - - - - - - - - 6.67 5.34 109.17 109.17 - - - - The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 39. Related Party Disclosures: (Contd.) ₹ crore Associates Promoters Particulars Joint Ventures Key Management Personnel Employee Benefit Funds Promoter Group Sr. No. 18 Impairment of Investments- Reversal 19 Sale of Investments 20 Loans repaid (including loan converted into equity) 21 Loans provided for as doubtful advances (including interest) 22 Deposits taken 23 Deposits refunded 24 Loan taken 25 Loan adjusted against liability 26 Liability written back 27 Donation given Balances outstanding 1 Perpetual Securities Outstanding (including interest thereon) 2 Redeemable Non-Convertible Debentures 3 Other receivables 4 Loans given (including interest thereon) 5 Loans provided for as doubtful advances (including interest thereon) 6 Deposits taken outstanding 7 Dividend receivable 8 Letter of comfort outstanding 9 Other payables 10 Loans taken (including interest thereon) 11 Brand Equity Payable - 2.48 - - - 1.00 - - - 0.01 - - - - - - - - - - - - 7.65 1.26 1.27 1.27 1.27 1.27 - - - - - - 10.89 7.70 - - - - - - - - 14.43 116.83 0.14 - - 50.00 - 50.00 - 665.77 - 830.34 - - - - - - - - 96.44 @ 165.60 @ 75.62 @ 75.26 @ 54.39 54.26 12.80 - - 16.71 0.05 0.05 2071.63 1,428.15 2,203.86 2,873.82 - - - - - - - - - - - - - - - - - - - 2.03 - - - - - - - - - - - - - - - - - - 8.05 12.93 - - - - - - - - - - - - - - - - - - - - - - - - - - - - 36.32 21.49 0.01 - - - - - - - - - 43.63 13.56 - - - - - - - 619.46 - - - - - 1,542.61 - - - - 0.19 0.41 - 1.55 - - - - - - - 20.00 198.20 199.00 36.50 36.50 17.15 12.38 - - - - 0.21 0.02 - - - - 17.80 2.93 - - - - - - - - - - - - - - - 0.64 - - - - - - 7.66 0.08 - - - - 2.00 2.00 - - - - 0.17 31.11 - - 0.70 - 439 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 39. Related Party Disclosures: (Contd.) Notes: 1. All outstanding balances are unsecured. 2. All transactions with the related parties have been done at arms length. 3. The Group's principal related parties consist of Tata Sons Private Ltd., its subsidiaries and joint ventures, affiliates and key managerial personnel. The Group's material related party transactions and outstanding balances are with related parties with whom the Group routinely enters into transactions in the ordinary course of business. # On payment basis @ Includes loan classified as held for sale * Key Managerial Personnel are entitled to post-employment benefits and other long term employee benefits recognised as per Ind AS 19 - ‘Employee Benefits’ in the financial statements. As these employee benefits are lump sum amounts provided on the basis of actuarial valuation, the same is included above on payment basis. 40. Financial Instruments 40.1 Fair values Set out below, is a comparison by class of the carrying amount and fair value of the financial instruments: Financial assets Cash and Cash Equivalents Other Balances with Banks Trade Receivables Unbilled Revenues Loans Finance Lease Receivables FVTPL Financial Investments # FVTOCI Financial Investments # Amortised Cost Financial Investments # Derivative Instruments not in hedging relationship Other Financial Assets Asset Classified as Held For Sale (Refer Note 17) - Strategic Engineering Division (SED) - FVTOCI Financial Investments # (Refer Note below) - Loans (including accrued interest) Total Financial liabilities Trade Payables Fixed rate Borrowings (including Current Maturities) Floating rate Borrowings (including Current Maturities) Lease Liability Derivative Instruments not in hedging relationship Other Financial Liabilities # other than investments accounted for Equity Method Carrying value Fair Value 31st March, 2020 31st March, 2019 31st March, 2020 31st March, 2019 ₹ crore 1,861.50 232.68 4,456.18 799.42 113.88 622.12 702.53 461.79 167.87 301.64 1,689.58 667.35 22.81 22.83 645.45 142.00 4,638.25 837.85 177.74 603.52 126.32 485.67 416.40 24.76 533.58 265.62 38.65 18.59 1,861.50 232.68 4,456.18 799.42 113.88 622.12 702.53 461.79 176.79 301.64 1,689.58 667.35 22.81 22.83 645.45 142.00 4,638.25 837.85 177.74 603.52 126.32 485.67 423.27 24.76 533.58 265.62 38.65 18.59 12,122.18 8,954.40 12,131.10 8,961.27 5,095.44 18,891.49 29,484.45 3,560.22 64.03 4,323.96 5,504.24 16,115.06 32,390.98 Nil 113.35 3,563.32 5,095.44 20,116.49 29,492.81 3,560.22 64.03 4,323.96 5,504.24 16,149.65 32,390.98 Nil 113.35 3,563.32 61,419.59 57,686.95 62,652.95 57,721.54 440 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 40. Financial Instruments (Contd.) The management assessed that the fair value of cash and cash equivalents, other balances with bank, trade receivables, loans, finance lease receivables, unbilled revenues, trade payables, other financial assets and liabilities approximate their carrying amounts largely due to the short term maturities of these instruments. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties. The following methods and assumptions were used to estimate the fair values. - Fair value of the quoted bonds, mutual funds, government securities are based on the price quotations near the reporting date. Fair value of the unquoted equity shares have been estimated using a Discounted Cash Flow (DCF) model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in management's estimate of fair value for those unquoted equity investments. - The fair value of the FVTOCI financial assets are derived from quoted market price in active markets and unobservable inputs. - The Group enters into derivative financial instruments with various counterparties, principally banks and financial institutions with investment grade credit ratings. Interest rate swaps, foreign exchange forward and option contracts are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques include forward pricing and swap models using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates, yield curves of the respective currencies, currency basis spreads between the respective currencies, interest rate curves and forward rate curves of the underlying currency. All derivative contracts are fully collateralized, thereby, eliminating both counterparty and the Group's own non-performance risk. As at 31st March, 2020, the marked- to-market value of derivative asset positions is net of a credit valuation adjustment attributable to derivative counterparty default risk. - The fair value of unquoted instruments, loans from banks and other financial liabilities, as well as other non-current financial liabilities is estimated by discounting future cash flow using rates currently available for debt on similar terms, credit risk and remaining maturities. - The cost of certain unquoted investments approximate their fair value because there is a wide range of possible fair value measurements and the cost represents the best estimate of fair value within that range. Reconciliation of Level 3 fair value measurement of unquoted equity shares. (Refer Note below) Opening balance Total Gain or (Loss) Closing balance Unlisted shares irrevocably designated as at FVTOCI ₹ crore Unlisted shares carried at FVTPL Year ended 31st March, 2020 Year ended 31st March, 2019 Year ended 31st March, 2020 Year ended 31st March, 2019 397.71 Nil 397.71 397.08 0.63 397.71 0.16 Nil 0.16 0.15 0.01 0.16 Note: Certain unquoted investments are not held for trading, instead they are held for medium or long term strategic purpose. Upon the application of Ind AS 109, the Group has chosen to designate these investments in equity instruments as at FVTOCI as the directors believe this provides a more meaningful presentation for medium and long- term strategic investments, then reflecting changes in fair value immediately in profit or loss. All gains and losses included in other comprehensive income relate to unlisted shares held at the end of the reporting period and are reported under "Equity Instruments through Other Comprehensive Income". The significant unobservable input used in the fair value measurement categorized within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at 31st March, 2020 and 31st March, 2019 are as shown below: 441 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 40. Financial Instruments (Contd.) Description of significant unobservable inputs to valuation: Valuation techniques Investments in unquoted equity shares Price of recent transaction (PORT) Significant unobservable inputs Transaction price Sensitivity of the input to fair value 5% (31st March, 2019: 5%) increase (decrease) in the transaction price would result in increase (decrease) in fair value by ₹ 3.43 crore (31st March, 2019: ₹ 3.43 crore) The discount for lack of marketability represents the amount that the Group has determined that market participants would take into account when pricing the investments. 40.2 Fair value hierarchy The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels: Quoted prices in an active market (Level 1): Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. This includes quoted equity instruments, government securities, quoted borrowings (fixed rate) and mutual funds that have quoted price. Valuation techniques with observable inputs (Level 2): Inputs are 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). This includes derivative financial instruments and unquoted borrowings (fixed and floating rate). Valuation techniques with significant unobservable inputs (Level 3): Inputs are not based on observable market data (unobservable inputs). Fair values are 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 includes unquoted equity shares. The following table summarizes financial assets and liabilities measured at fair value on a recurring basis and financial assets that are not measured at fair value on a recurring basis (but fair value disclosures are required) : Date of valuation Fair value hierarchy as at 31st March, 2020 Quoted prices in active markets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Total ₹ crore ₹ crore ₹ crore ₹ crore Asset measured at fair value FVTPL Financial Investments FVTOCI Financial Investments: - Quoted Equity Shares - Unquoted Equity Shares Derivative instruments not in hedging relationship 31st March, 2020 Assets Classified as Held For Sale Asset for which fair values are disclosed Investment in Government Securities 31st March, 2020 31st March, 2020 31st March, 2020 702.37 31st March, 2020 31st March, 2020 Nil Nil Nil 301.64 Nil Nil 0.16 702.53 Nil 397.71 Nil Nil 64.08 397.71 301.64 22.81 Nil 176.79 301.64 397.87 1,665.56 64.08 Nil Nil 22.81 176.79 966.05 Liabilities measured at fair value Derivative Financial Liabilities Liabilities for which fair values are disclosed Fixed rate Borrowings Floating rate Borrowings Total 31st March, 2020 Nil 64.03 31st March, 2020 11,119.13 8,997.36 31st March, 2020 1,191.78 28,301.02 Nil Nil Nil 64.03 20,116.49 29,492.80 12,310.91 37,362.41 Nil 49,673.32 442 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 40. Financial Instruments (Contd.) Asset measured at fair value FVTPL Financial Investments FVTOCI Financial Investments: - Quoted Equity Shares - Unquoted Equity Shares Assets Classified as Held For Sale Asset for which fair values are disclosed Investment in Government Securities Liabilities measured at fair value Derivative Financial Liabilities Liabilities for which fair values are disclosed Fixed rate Borrowings Floating rate Borrowings Total Date of valuation Fair value hierarchy as at 31st March, 2019 Quoted prices in active markets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Total ₹ crore ₹ crore ₹ crore ₹ crore 31st March, 2019 126.16 31st March, 2019 31st March, 2019 87.96 Nil Nil 31st March, 2019 38.65 31st March, 2019 423.27 676.04 Nil Nil Nil 24.76 Nil Nil 0.16 126.32 Nil 397.71 Nil Nil Nil 87.96 397.71 24.76 38.65 423.27 24.76 397.87 1,098.67 31st March, 2019 Nil 113.35 31st March, 2019 8,890.13 7,259.52 31st March, 2019 1,069.94 31,321.04 Nil Nil Nil 113.35 16,149.65 32,390.98 9,960.07 38,693.91 Nil 48,653.98 Derivative instruments not in hedging relationship 31st March, 2019 Note: There has been no transfer between level 1 and level 2 during the period. 40.3 Capital Management & Gearing Ratio For the purpose of the Group's capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Group. The primary objective of the Group's capital management is to maximize the shareholder value. The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. From time to time, the Group reviews its policy related to dividend payment to shareholders, return capital to shareholders or fresh issue of shares. The Group monitors capital using gearing ratio, which is net debt divided by total capital plus net debt. The Group’s policy is to keep the gearing ratio between 60% and 80% at consolidated level. The Group includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents, excluding discontinued operations as detailed in the notes below. The Group's capital management is intended to create value for shareholders by facilitating the meeting of its long-term and short-term goals. Its Capital structure consists of net debt (borrowings as detailed in notes below) and total equity. Gearing ratio The gearing ratio at the end of the reporting period was as follows: Debt (i) Less: Cash and Bank balances Net debt Capital (ii) Capital and net debt Net debt to Total Capital plus net debt ratio (%) 31st March, 2020 ₹ crore 31st March, 2019 ₹ crore 49,214.78 2,075.73 47,139.05 19,566.02 66,705.07 70.67 49,131.63 769.57 48,362.06 18,305.51 66,667.57 72.54 443 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 40. Financial Instruments (Contd.) (i) Debt is defined as Non-current borrowings (including current maturities) and Current borrowings (excluding derivative, financial guarantee contracts and contingent considerations) and interest accrued on Non-current and Current borrowings. (ii) Capital is defined as Equity share capital, Unsecured perpetual securities and other equity including reserves and surplus. In order to achieve this overall objective, the Group’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. No changes were made in the objectives, policies or processes for managing capital during the years ended 31st March, 2020 and 31st March, 2019. 40.4 Financial risk management objectives and policies The Group’s principal financial liabilities, other than derivatives, comprise borrowings, trade and other payables, financial guarantee contracts and other financial liabilities. The main purpose of these financial liabilities is to finance the Group’s operations and to provide guarantees to support its operations. The Group’s principal financial assets include loans, trade and other receivables, cash and cash equivalents, other bank balances, unbilled receivables, finance lease receivables and other financial assets that derive directly from its operations. The Group also holds FVTOCI/FVTPL investments and enters into derivative transactions. The Group is exposed to market risk, credit risk and liquidity risk. The Group’s senior management oversees the management of these risks. The Group’s senior management is supported by a risk committee that reviews the financial risks and the appropriate financial risk governance framework for the Group. The Group’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Group’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams that have the appropriate skills, experience and supervision. It is the Group’s policy that no trading in derivatives for speculative purposes may be undertaken. The risk management policy is approved by the Board of Directors, which is summarized below. 40.4.1 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 of three types of risk: currency risk, interest rate risk and equity price risk. The impact of equity price risk is not material. Financial instruments affected by market risk include loans and borrowings, derivative financial instruments and FVTOCI investments. The sensitivity analysis in the following sections relate to the position as at 31st March, 2020 and 31st March, 2019. The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant and on the basis of hedge designations in place at 31st March, 2020. The analysis exclude the impact of movements in market variables on the carrying values of gratuity and other post retirement obligations, provisions, and the non-financial assets and liabilities of foreign operations. a. Foreign currency risk management Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Group is exposed to foreign exchange risk through its operations in international projects and purchase of coal from Indonesia and elsewhere and overseas borrowings. The results of the Group's operations can be affected as the rupee appreciates/depreciates against these currencies. The Group enters into derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. When a derivative is entered into for the purpose of being a hedge, the Group negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency. 444 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 40. Financial Instruments (Contd.) The following table analyzes foreign currency assets and liabilities on balance sheet dates: Foreign Currency Liabilities In USD In EURO In GBP In JPY In VND Foreign Currency Assets In USD In EURO In ZAR In VND In TAKA 31st March, 2020 Foreign Currency (In Millions) ₹ crore 31st March, 2019 Foreign Currency (In Millions) ₹ crore 207.01 1,563.81 412.07 2,849.95 2.55 0.06 328.72 790.21 21.09 0.59 22.86 0.25 0.42 * 157.84 Nil 3.27 0.03 9.86 Nil 31st March, 2020 Foreign Currency (In Millions) ₹ crore 31st March, 2019 Foreign Currency (In Millions) ₹ crore 4.58 Nil 0.03 35.88 0.21 34.59 Nil 0.01 0.01 0.02 8.85 0.06 0.01 Nil 0.20 61.19 0.46 0.01 Nil 0.02 * Denotes figures below 50,000/- (i) Foreign currency sensitivity analysis The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange rates, with all other variables held constant. The impact on the Group’s profit before tax and impact on equity is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency forward and option contracts given as under. As of 31st March, 2020 Rupee depreciate by ₹ 1 against USD Rupee appreciate by ₹ 1 against USD As of 31st March, 2019 Rupee depreciate by ₹ 1 against USD Rupee appreciate by ₹ 1 against USD (+) ₹ 43.02 (-) ₹ 43.02 Nil Nil (-) ₹ 2.91 (+) ₹2.91 (-) ₹ 1.09 (+) ₹ 0.61 Effect on Equity (before tax) Effect on Profit (before tax) ₹ crore Notes: 1) +/- Gain/Loss 2) The impact of depreciation/ appreciation on foreign currency other than U.S.Dollar on profit before tax of the Group is not significant. (ii) Derivative financial instruments The Group holds derivative financial instruments such as foreign currency forward and option contracts to mitigate the risk of changes in exchange rate on foreign currency exposure. The counterparty for these contracts is generally a Bank or a Financial Institution. These derivative financial instrument are valued based on quoted prices for similar asset and liabilities in active markets or inputs that is directly or indirectly observable in the market place. 445 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 40. Financial Instruments (Contd.) The following table gives details in respect of outstanding foreign exchange forward and option contracts: Outstanding Contracts Other Derivatives Forward contracts In USD In ZAR In GBP In YEN Option contracts In USD Other Derivatives Forward contracts In USD In EURO In GBP In YEN Option contracts In USD Buy/ Sell Foreign Currency (In Millions) 31st March, 2020 Nominal Value in ₹ crore Fair Value in ₹ crore Buy Sell Buy Buy Buy 596.95 1,300.00 Nil 2.94 4,509.49 548.96 Nil 0.20 174.18 52.49 Nil * 286.57 2,164.82 74.15 Buy/ Sell Foreign Currency (In Millions) 31st March, 2019 Nominal Value in ₹ crore Fair Value in ₹ crore Buy Buy Buy Buy Buy 336.26 2,325.60 (84.12) 0.08 Nil 5.16 0.62 Nil 0.32 * Nil * 119.82 828.69 (14.14) Note: Fair Value in brackets denotes liability. * Denotes figures below 50,000/- Interest rate risk management 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 Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term debt obligations with floating interest rates. The Group manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Group’s policy is to keep upto 50% of its borrowings at fixed rates of interest. To manage this, the Group enters into fixed rate loan, Bonds and interest rate swaps, in which it agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed upon notional principal amount. Interest rate sensitivity The sensitivity analysis below have been determined based on exposure to interest rates for term loans and debentures at the end of the reporting period and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in case of term loans and debentures that have floating rates. b. (i) 446 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 40. Financial Instruments (Contd.) If the interest rates had been 50 basis points higher or lower and all the other variables were held constant, the effect on Interest expense for the respective financial years and consequent effect on Group's profit in that financial year would have been as below: Interest expense on loan Effect on Equity/Profit before tax As of 31st March, 2020 As of 31st March, 2019 50 bps increase 50 bps decrease 50 bps increase 50 bps decrease (+) ₹ 147.46 (-) ₹ 147.46 (+) ₹ 168.39 (-) ₹ 168.39 (-) ₹ 147.46 (+) ₹ 147.46 (-) ₹ 168.39 (+) ₹ 168.39 ₹ crore (ii) Interest rate swap contracts An interest rate swap is an agreement between two counterparties in which one stream of future interest payments is exchanged for another based on a specified principal amount. Interest rate swaps usually involve the exchange of a fixed interest rate for a floating rate, or vice versa, to reduce or increase exposure to fluctuations in interest rates or to obtain a marginally lower interest rate than would have been possible without the swap. Interest rate swaps are the exchange of one set of cash flows for another. The following table gives details in respect of outstanding receive floating pay fixed contracts: 31st March 2020 Nominal amounts Fair value assets (liabilities) 31st March 2019 Nominal amounts Fair value assets (liabilities) 40.4.2 Credit risk management Less than 1 year 1 to 5 years 1,473.08 (14.38) 276.64 1.38 923.16 (36.05) 2,593.55 8.29 ₹ crore 5 years + 128.18 (13.16) Nil Nil Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities including loans, foreign exchange transactions and other financial instruments. Trade Receivables Loans Finance Lease Receivables Other Financial Assets (including derivatives contracts) Held for Sale Financial Assets Unbilled Revenue Total 31st March, 2020 31st March, 2019 ₹ crore 4,456.18 113.88 622.12 1,991.22 712.99 799.42 4,638.25 177.74 603.52 558.34 322.86 837.85 8,695.81 7,138.56 Refer Note 7 for credit risk and other information in respect of trade receivables. Other receivables as stated above are due from the parties under normal course of the business and as such the Group believes exposure to credit risk to be minimal. The Group has not acquired any credit impaired asset. 40.4.3 Liquidity risk management The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Group has access to a sufficient variety of sources of funding. Having regards to the nature of the business wherein the Group is able to generate fixed cash flows over a period of time and to optimize the cost of funding, the Group, from time to time, funds its long -term investment from short-term sources. The short-term borrowings can be roll forward or, if required, can be refinanced from long term borrowings. 447 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 40. Financial Instruments (Contd.) The table below summarizes the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments. Up to 1 year 1 to 5 years 5+ years Total Carrying Amount ₹ crore 31st March, 2020 Non-Derivatives Borrowings # Trade Payables Lease Liabilities Other Financial Liabilities Total Non-Derivative Liabilities Derivatives Other Financial Liabilities Total Derivative Liabilities 31st March, 2019 Non-Derivatives Borrowings # Trade Payables Other Financial Liabilities Total Non-Derivative Liabilities Derivatives Other Financial Liabilities Total Derivative Liabilities 18,472.76 27,607.27 25,413.87 71,493.89 5,095.44 404.98 2,763.60 Nil 1,856.24 43.77 Nil 7,535.36 677.75 5,095.44 9,796.59 3,485.12 49,218.43 5,095.44 3,560.22 3,485.12 26,736.78 29,507.28 33,626.98 89,871.04 61,359.21 64.03 64.03 Nil Nil Nil Nil 64.03 64.03 64.03 64.03 20,515.40 23,357.51 24,175.16 68,048.07 5,481.49 2,250.42 22.75 61.93 Nil 625.38 5,504.24 2,937.73 49,131.63 5,504.24 2,937.73 28,247.31 23,442.19 24,800.54 76,490.04 57,573.60 113.35 113.35 Nil Nil Nil Nil 113.35 113.35 113.35 113.35 # The table has been drawn up based on the undiscounted contractual maturities of the financial liabilities including interest that will be paid on those liabilities upto the maturity of the instruments, ignoring the call and refinancing options available with the Group. The amounts included above for variable interest rate instruments for non-derivative liabilities is subject to change if changes in variable interest rates differ to those estimates of interest rates determined at the end of the reporting period. 41. Segment Reporting From the current year, the Group has changed its organization structure into various operating verticals for efficient monitoring and pursuing growth. Consequently, reporting to Chief Operating Decision Maker (CODM) has been changed which has resulted into change in the composition of reportable segments. Accordingly, corresponding information for comparative year has been restated in the segment reporting. Information reported to the CODM for the purpose of resource allocation and assessment of segment performance focuses on business segment which comprises of Generation, Renewables, Transmission and Distribution and Others. Specifically, the Group's reportable segments under Ind AS are as follows: Generation: Comprises of generation of power from hydroelectric sources and thermal sources (coal, gas and oil) from plants owned and operated under lease arrangement and related ancillary services. Renewables: Comprises of generation of power from renewable energy sources i.e. wind and solar and related ancillary services Transmission and Distribution: Comprises of transmission and distribution network, sale of power to retail customers through distribution network and related ancillary services. Others: Comprises of project management contracts/infrastructure management services, property development and lease rent of oil tanks. 448 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 41. Segment Reporting (Contd.) Revenue and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reporting segment have been allocated on the basis of associated revenue of the segment and manpower efforts. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. (a) Segment Information: Particulars Segment Revenue (Refer Note 3.15 and 28) Generation Renewables Transmission and Distribution Others (Less): Inter Segment Revenue - Generation (Less): Inter Segment Revenue - Renewables Inter Segment Revenue - Others (Less): Total Segment Revenue Discontinued Operations- Others # Revenue / Income from Operations (including Net Movement in Regulatory Deferral Balances) Segment Results Generation Renewables Transmission and Distribution Others Total Segment Results (Less): Finance Costs Add/(Less): Exceptional Item - Generation (Refer Note 12 and 37e) Add/(Less): Exceptional Item - Transmission and Distribution (Refer Note 12) Add/(Less): Exceptional Item - Unallocable Income/(Expense) (Refer Note 6b (i) b, (ii) & (iii) Add/(Less): Unallocable Income/(Expense) (Net) Profit/(Loss) Before Tax from Continuing Operations Profit/(Loss) Before Tax from Discontinued Operations Impairment Loss on Remeasurement to Fair Value (Refer Note 17c) Profit/(Loss) Before Tax from Discontinued Operations Segment Assets Generation Renewables Transmission and Distribution Others Unallocable* Assets classified as held for sale # (Refer Note 17c) Total Assets For the year ended 31st March, 2020 For the year ended 31st March, 2019 ₹ crore 14,532.74 3,977.45 14,002.70 255.53 32,768.42 (3,582.99) (235.61) (12.56) 15,645.16 3,610.39 14,147.26 234.03 33,636.84 (3,417.53) (230.43) (5.24) 28,937.26 29,983.64 343.74 143.59 29,281.00 30,127.23 2,765.46 1,499.66 1,922.14 193.12 2,486.61 1,426.85 2,126.99 168.76 6,380.38 6,209.21 (4,493.73) (4,170.00) (351.35) (190.00) 767.51 255.35 2,368.16 (81.64) (361.00) (442.64) 40,076.13 19,533.81 17,859.37 1,361.59 9,037.18 1,880.07 (45.00) (106.41) 1,897.24 34.05 3,819.09 (191.82) Nil (191.82) 39,842.59 18,315.93 17,338.05 1,001.24 5,600.82 2,064.30 89,748.15 84,162.93 449 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 41. Segment Reporting (Contd.) Particulars Segment Liabilities Generation Renewables Transmission and Distribution Others Unallocable* Liabilities classified as held for sale # (Refer Note 17c) Total Liabilities Capital Expenditure (to the extent allocable to the segment) Generation Renewables Transmission and Distribution Others Discontinued Operations# Depreciation/Amortisation (to the extent allocable to the segment) Generation Renewables Transmission and Distribution Others RECONCILIATION OF REVENUE Particulars Revenue from Operations Add/(Less): Net Movement in Regulatory Deferral Balances Add/(Less): Net Movement in Regulatory Deferral Balances in respect of earlier years Add/(Less): Deferred Tax Recoverable/(Payable) (Refer Note 3.15) Add/(Less): Unallocable Revenue Total Segment Revenue Discontinued Operations- Others # Total Segment Revenue as reported above # Pertains to Strategic Engineering Division being classified as Discontinued Operations. * Includes amount classified as held for sale other than Strategic Engineering Division. Notes: For the year ended 31st March, 2020 For the year ended 31st March, 2019 ₹ crore 3,685.28 1,596.45 5,294.05 128.71 56,113.53 1,032.07 4,149.69 1,588.46 4,846.36 138.16 52,001.82 966.27 67,850.09 63,690.76 292.04 692.51 1,120.75 45.06 45.74 283.84 2,144.19 963.96 48.96 87.29 2,196.10 3,528.24 1,079.30 837.22 634.92 22.31 939.60 816.79 565.50 13.68 2,573.75 2,335.57 For the year ended 31st March, 2020 For the year ended 31st March, 2019 ₹ crore 29,136.37 (451.68) (21.32) 284.31 (10.42) 29,881.06 (340.19) 274.26 169.20 (0.69) 28,937.26 29,983.64 343.74 143.59 29,281.00 30,127.23 1. Comparative figures for Statement of Profit and Loss items are for the year ended 31st March, 2019 and Balance Sheet items are as at 31st March, 2019. 2. Revenue from power distribution companies on sale of electricity with which Group has entered into a Power Purchase Agreement accounts for more than 10% of Total Revenue. 3. Transfer prices between operating segments are on an arm's length basis in a manner similar to transactions with third parties. 450 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 41. Segment Reporting (Contd.) (b) Geographic Information: The Group operates in two principal geographical areas - Domestic and Overseas The Group's revenue from continuing operations from external customers by location of operations and information about its non-current assets by location of assets are detailed below: Geographical Segment Particulars Revenue from External Customers Domestic Overseas Segment Assets: Non Current Assets Domestic Overseas Current Assets Domestic Overseas Regulatory Deferral Account - Assets Domestic Unallocable Assets Total Assets Capital Expenditure (to the extent allocable to the segment) Domestic Overseas For the year ended 31st March, 2020 For the year ended 31st March, 2019 ₹ crore 28,911.24 369.76 29,281.00 29,523.45 603.78 30,127.23 52,470.93 11,971.70 64,442.63 52,261.58 8,844.60 61,106.18 8,616.26 291.84 8,908.10 9,298.13 335.37 9,633.50 5,480.17 5,480.17 5,758.13 5,758.13 10,917.25 7,665.12 89,748.15 84,162.93 2,196.09 0.01 2,196.10 3,528.02 0.22 3,528.24 42 Significant Events after the Reporting Period There were no significant adjusting events that occurred subsequent to the reporting period other than the events disclosed in the relevant notes. 451 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm t n u o m A ) e r o r c ₹ ( 6 3 5 9 . 7 0 4 1 . ) 2 7 1 1 ( . 5 5 0 4 . . 2 8 7 3 3 2 5 2 . e m o c n i 7 3 0 . ) 1 3 0 ( . 8 0 1 . 6 9 8 . . 7 2 0 1 4 8 8 0 1 . . ) 8 7 2 9 8 ( ) 7 6 3 2 ( . ) 1 0 0 ( . ) 5 0 3 ( . ) 4 8 7 4 ( . ) 8 6 0 ( . ) 0 2 0 ( . . 7 9 7 1 2 1 7 2 . ) 1 0 0 ( . 1 2 5 . - - - ) 8 0 0 ( . ) 7 2 1 ( . ) 2 0 0 ( . ) 1 0 0 ( . 8 7 5 . 7 0 0 . - 4 1 0 . - - ) 2 8 0 ( . ) 2 0 0 ( . - 9 9 0 . 0 8 8 . ) 8 4 8 ( . . 1 5 1 8 1 7 7 4 2 . . 2 6 7 5 4 . 2 3 1 1 3 7 1 7 5 . . 9 5 1 0 5 1 , - ) 2 2 0 ( . 3 0 0 . 3 2 0 . 1 8 4 . 1 8 9 3 . 6 6 0 . 3 1 2 1 . 5 2 8 . 2 5 1 . ) 6 7 2 5 ( . ) 1 3 0 ( . ) 0 2 2 2 ( . ) 6 1 0 ( . - - ) 4 2 2 ( . ) 7 8 3 ( . 6 0 0 . ) 6 6 0 ( . - - e m o c n i ) 3 4 6 ( . ) 4 0 0 ( . ) 1 7 2 ( . ) 2 0 0 ( . - ) 7 2 0 ( . ) 7 4 0 ( . - 1 0 0 . ) 8 0 0 ( . - - - - - - - - - - - ) 3 0 0 ( . - - - - - - - - - - 9 2 5 9 . 1 6 1 1 . ) 5 2 1 ( . ) 5 1 0 ( . . 6 7 2 8 1 . 2 7 8 3 1 1 9 6 1 . 5 8 9 7 . 6 5 2 6 . 7 1 7 5 . . 7 4 6 2 1 3 7 9 . 2 6 7 . 7 9 6 . 1 4 5 1 . . 7 8 2 6 3 1 , - ) 8 0 5 5 ( . . 6 0 5 9 3 . 5 8 4 8 1 . 2 1 8 4 1 1 0 5 . 8 3 4 1 . 8 4 0 1 . 1 7 0 4 . 9 4 0 . 6 3 0 . 8 3 1 . . 2 8 7 3 3 5 4 1 1 . . ) 4 5 0 9 8 ( ) 7 1 0 3 ( . . 4 1 4 1 4 3 0 4 1 . ) 1 0 0 ( . ) 1 1 3 ( . ) 8 1 7 4 ( . ) 8 6 0 ( . ) 0 2 0 ( . . 8 6 2 2 1 1 7 2 . ) 1 0 0 ( . 1 2 5 . - - - ) 1 1 0 ( . ) 0 6 1 ( . ) 2 0 0 ( . ) 1 0 0 ( . 6 1 4 . 9 0 0 . - 8 1 0 . - - ) 2 8 0 ( . ) 3 0 0 ( . - - ) 8 4 8 ( . ) 9 2 0 ( . 2 0 1 . 0 8 8 . 3 0 0 . 0 3 0 . 9 1 6 . 8 1 6 4 . ) 7 8 1 ( . 9 3 3 1 . 6 2 6 . - . 9 3 6 3 7 7 , . 7 6 6 2 2 2 3 2 1 . . 8 8 1 5 2 . 0 5 9 6 7 2 , . 6 8 6 3 0 7 , - - . 8 9 5 5 4 8 , 8 0 2 2 . 5 6 0 . 4 0 0 . 2 7 0 . 1 9 7 . 0 1 0 2 . 5 1 4 2 . - - . 7 9 1 6 2 5 1 , 9 8 5 6 . . 1 6 3 6 2 . 1 5 2 3 2 . 3 4 8 6 0 2 , . 3 1 2 3 0 4 , ) 2 3 1 ( . ) 5 0 3 ( . . 2 1 3 7 4 3 , . 1 0 4 5 9 2 7 2 . . 7 6 0 3 0 5 , - - . 0 1 6 6 1 2 , - - - - - 1 3 6 . 3 0 8 3 . 1 0 0 2 . . 4 5 6 0 4 4 0 7 5 . . 7 4 4 2 2 1 , . 5 7 4 8 6 1 , - - . 6 2 6 0 5 . 4 4 0 9 0 1 , - - 9 1 6 . 2 0 0 . - 1 1 0 . - - - - 6 0 0 . 6 1 1 . 6 1 0 . 0 5 3 . 1 8 4 . - - 5 4 1 . 1 1 3 . ) 3 6 0 ( . ) 5 1 0 ( . . 9 7 1 9 6 5 9 3 2 . ) 6 0 0 ( . 0 8 4 6 . - ) 1 0 0 ( . 8 3 6 7 . ) 1 0 0 ( . 5 4 7 . 2 4 1 . ) 9 7 1 2 ( . . 9 2 0 0 3 2 , . 7 4 4 3 0 2 , . 3 4 9 2 9 . 9 2 4 5 8 . 8 6 3 5 8 . 2 4 0 5 5 1 , 6 5 2 3 . 4 1 0 . 6 5 0 . 0 5 0 . 1 4 4 . 9 5 8 . 0 4 7 . - ) 1 0 0 ( . 2 7 0 1 . - - 7 4 1 . 5 0 0 . - 4 1 0 . - - - 6 1 0 . 2 0 0 . ) 5 0 0 ( . - 0 9 4 . 4 3 4 . 8 9 1 . 2 8 1 . 0 3 3 . 2 8 1 . s c i m a r e C a t a T s a n w o n k y l r e m r o f ( d t L s c i m a r e C L C T . ) d t L . d t L h t a J l s e b a w e n e R a m a R o d n I . d t L y g r e n E n e e r G r e w o P a t a T . d t L s l m e t s y S r a o S r e w o P a t a T . d t L a r f n I L P D N . d t L n o i t u b i r t s i D r u p d e h s m a J r e w o P a t a T . d t L n o i t u b i r t s i D i l h e D r e w o P a t a T . d t L r e w o P t a r a j u G l a t s a o C . d t L r e w o P n o h t i a M . d t L d i r g o r c i M e b a w e n e R P T l . l d t L y g r e n E e b a w e n e R r e w o P a t a T . d t L i l a n r i K P T . d t L r u p a o S P T l . d t L m r a f d n W a p u S i a r i h B s a n w o n k y l r e m r o F ( . d t L . e t P s t n e m t s e v n I a r i h B s e i r a i d i s b u S n g i e r o F 3 ) d e t a d i l o s n o C ( . k b T n a a d n A l i g r e n E r e b m u S T P . d t L . e t P s e c r u o s e R y g r e n E t s u r T . d t L s t n e m t s e v n I i r u p v h B i . d t L s t n e m t s e v n I i l o p o h K ) . d t L t n e m t s e v n I 2 ) d e t a d i l o s n o C ( . l d t L y g r e n E e b a w e n e R n a h w a W l . d t L n o i t u b i r t s i D j r e m A P T . d t L a y r u a S e e y a a h t s a r i h C . d t L m r a f d n W a r a g a V i i . i d t L m r a f d n W d a v a o o P l i . d t L m r a f d n W e d a v N i i # . d t L y n a p m o C r e w o P a t a T e h T 1 ) d e t a d i l o s n o C ( . d t L o c l e N . d t L . o C t n e m t s e v n I b a a T - f A s e i r a i d i s b u S n a i d n I . d t L . i o C g n d a r T r e w o P a t a T l a t o T f o % s A d e t a d i l o s n o c e v i s n e h e r p m o c t n u o m A ) e r o r c ₹ ( r e h t O f o % s A d e t a d i l o s n o c e v i s n e h e r p m o c t fi o r p t n u o m A ) e r o r c ₹ ( f o % s A d e t a d i l o s n o c t n u o m A ) e r o r c ₹ ( f o % s A d e t a d i l o s n o c e m o c n i l a t o t t n u o m A ) e r o r c ₹ ( f o % s A s t e s s a t e n d e t a d i l o s n o c l a t o T n i e r a h S r e h t O n i e r a h S e m o c n I e v i s n e h e r p m o C e m o c n I e v i s n e h e r p m o C r o t fi o r P f o e r a h S ) s s o L ( . e . i e m o c n I l a t o T e m o c n I l r e h t O s u P e u n e v e R s t e s s a l a t o t . e . i s t e s s A t e N s e i t i l i b a i l l a t o t s u n m i s t s e r e t n I g n i l l o r t n o C n o N d n a s r e n w O o t e l b a t u b i r t t a s s o L d n a t fi o r P d n a s t e s s A t e N f o t n e m e t a t S . 3 4 452 s t n e m e t a t S l a i c n a n i F d e t a d i l o s n o C e h t o t s e t o N The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements l a t o T f o % s A d e t a d i l o s n o c e v i s n e h e r p m o c t n u o m A ) e r o r c ₹ ( e m o c n i r e h t O f o % s A d e t a d i l o s n o c e v i s n e h e r p m o c t fi o r p t n u o m A ) e r o r c ₹ ( f o % s A d e t a d i l o s n o c t n u o m A ) e r o r c ₹ ( f o % s A d e t a d i l o s n o c e m o c n i l a t o t t n u o m A ) e r o r c ₹ ( f o % s A s t e s s a t e n d e t a d i l o s n o c 3 6 5 5 . 8 8 1 . ) 3 6 3 1 ( . ) 6 4 0 ( . 9 8 2 1 . . 8 7 6 5 3 2 0 1 . 4 0 0 . l a t o T n i e r a h S r e h t O n i e r a h S e m o c n I e v i s n e h e r p m o C e m o c n I e v i s n e h e r p m o C r o t fi o r P f o e r a h S ) s s o L ( . e . i e m o c n I l a t o T e m o c n I l r e h t O s u P e u n e v e R s t e s s a l a t o t . e . i s t e s s A t e N s e i t i l i b a i l l a t o t s u n m i ) . d t n o C ( s t s e r e t n I g n i l l o r t n o C n o N d n a s r e n w O o t e l b a t u b i r t t a s s o L d n a t fi o r P d n a s t e s s A t e N f o t n e m e t a t S . 3 4 s t n e m e t a t S l a i c n a n i F d e t a d i l o s n o C e h t o t s e t o N t n u o m A ) e r o r c ₹ ( 8 0 1 6 . ) 8 3 1 1 ( . 3 1 3 . ) 3 0 1 ( . 6 9 4 3 . e m o c n i 2 6 1 . ) 0 3 0 ( . 8 0 0 . ) 3 0 0 ( . 3 9 0 . ) 7 0 1 1 ( . ) 9 2 0 ( . - - - 8 7 1 6 . . 3 6 9 0 1 ) 1 1 0 ( . 0 0 3 4 . . 4 8 0 7 3 2 0 0 . 7 2 7 5 . - 8 9 9 . . 8 5 5 1 3 ) 2 0 0 ( . 4 0 1 3 . 6 5 2 2 . 8 6 6 8 . ) 2 7 1 ( . 0 3 3 5 . 2 0 0 . ) 7 0 4 2 ( . . ) 8 7 1 4 1 ( - - - - 4 6 1 . 1 9 2 . 4 1 1 . 3 8 9 . 2 5 1 . - - - 6 2 0 . 7 3 8 . 2 8 0 . 0 6 0 . 0 3 2 . - ) 6 7 3 ( . ) 5 0 0 ( . 1 4 1 . ) 4 6 0 ( . 5 4 5 . 5 2 2 . - - 6 6 0 . 7 2 0 . - - ) 5 9 6 1 ( . ) 7 0 2 ( . - - - - ) 7 2 0 ( . ) 3 0 0 ( . - - - - 0 0 3 4 . 8 0 9 . 5 2 4 4 . 2 0 0 . 2 0 0 . 5 2 2 . . 7 8 3 2 1 - 8 8 3 2 . 7 6 6 1 . 6 6 4 1 . 4 5 8 2 . ) 2 7 1 ( . 0 3 3 5 . ) 6 4 4 ( . 8 0 0 . - - - - 4 2 5 . 1 1 1 . 9 3 5 . - - 7 2 0 . 0 1 5 1 . - 1 9 2 . 3 0 2 . 9 7 1 . 8 4 3 . ) 1 2 0 ( . 0 5 6 . ) 4 5 0 ( . 1 0 0 . 3 1 3 . ) 3 0 1 ( . 1 9 1 5 . 1 1 0 . ) 3 0 0 ( . 6 7 1 . ) 7 0 1 1 ( . ) 8 3 0 ( . - - - - 8 7 1 6 . . 0 9 9 0 1 ) 1 1 0 ( . - - - - - 9 0 2 . 2 7 3 . 2 0 3 1 . 4 4 0 . . 6 7 1 6 3 6 2 2 1 . - 3 7 7 . ) 2 0 0 ( . . 1 7 1 9 1 ) 2 0 0 ( . 6 1 7 . 9 8 5 . 2 0 2 7 . - - - 6 2 0 . 0 5 6 . 4 2 0 . 0 2 0 . 4 4 2 . . ) 2 3 0 7 1 ( ) 7 7 5 ( . - - - - ) 6 0 0 ( . - ) 1 6 9 1 ( . ) 6 6 0 ( . - - - - - - - - - - - - - - - - - - - - - - - - - - . 2 8 1 7 7 3 , . 0 0 0 0 1 . 6 5 0 2 8 . 0 0 0 0 1 . 6 2 1 5 9 2 , . 0 0 0 0 1 . 3 2 3 1 0 5 3 , - - - - - - - - - - - - - - - - - - - - - - - - - - . 0 0 0 0 1 0 7 9 7 . ) 7 3 8 1 ( . 3 1 3 . 9 2 2 . . 0 9 8 1 6 7 1 0 . ) 4 0 0 ( . 1 0 0 . - 2 3 1 . . d t L y n a p m o C g n d i s e t a i c o s s A n a i d n I l i u B d e t a i c o s s A e h T . d t L . e t P l a n o i t a n r e t n I r e w o P a t a T C L L s e c r u o s e R l a r u t a N n r e t s a E r a F . i d t L s r e e n g n E n u m h s a Y . j d t L s t c e o r P a t a T 1 5 0 8 . 7 1 0 . . d t L n o i t a r o p r o C r e w o P o r d y H u h h c a g a D s e t a i c o s s A n g i e r o F . 5 4 4 8 4 . 4 5 7 1 6 6 6 3 2 . ) 7 0 0 ( . 6 7 0 . ) 9 1 7 5 ( . . 6 8 0 7 7 . 9 1 4 6 2 . 6 9 9 7 7 ) 4 0 0 ( . 2 0 0 . 6 8 8 2 . . 2 5 2 2 5 1 , 9 1 0 . . 3 1 5 8 2 . 8 0 6 2 2 . 0 5 5 5 3 . 2 7 8 9 2 ) 7 8 7 2 ( . . 6 8 0 3 4 . 4 7 1 5 3 0 9 0 . . 2 6 2 1 9 6 4 , 3 0 1 . 2 3 1 . 5 0 0 . - - ) 2 1 0 ( . 4 6 1 . 6 5 0 . 6 6 1 . - - - 6 0 0 . 5 2 3 . 1 6 0 . 8 4 0 . 6 7 0 . 4 6 0 . - 2 9 0 . 5 7 0 . ) 6 0 0 ( . . 0 0 0 0 1 5 ) d e t a d i l o s n o C ( k b T a n a r a s s e k u S i t l u m a r a B T P 4 ) d e t a d i l o s n o C ( r e w o P a m i r P n a t n a m i l a K T P 6 7 ) d e t a d i l o s n o C ( V B s d n a l r e h t e N i l a q s t s i r a j d A ) d e t a d i l o s n o C ( V B s d n a l r e h t e N i t e h k m o r o K n o i t a r o p r o C r e w o P i h z e T i h z e t I ) d e t a d i l o s n o C ( . d t L . e t P s e r u t n e V r e w o P t n e g r u s e R s e c r u o s e R l e s l a K l a o c o d n I T P s e c r u o s e R m i t l a K l a o c o d n I T P . d t L . e t P s t n e m t s e v n I e c i d n a C a m a t a r P g n a b m a T a s u N T P a i s e n o d n I l a t i p a C l e v r a M T P i d a b A a m i r P a y r a k w D T P i s e i t i t n E l o r t n o C y l t n o J n a i d n i I . d t L n o i s s i m s n a r T s k n i l r e w o P . d t L r e w o P o r d y H r a g u D . d t L y g r e n E l a i r t s u d n I . d t L y n a p m o C l a o C i i n k a d n a M . d t L s e n M i l a o C d e b u T . i l d t L g n d o H d n a L e c a o S l s e i t i t n E l o r t n o C y l t n o J n g i e r o F i a i s e n o d n I i n m t u r A T P l a o C a m i r P m i t l a K T P . d t L ) n a m y a C ( s e c r u o s e R l a o c o d n I . d t L ) n a m y a C ( s e c r u o s e R C P K l a o c o d n I 453 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm . ) 8 1 9 1 6 1 ( , - ) 3 8 6 ( . ) 3 8 7 8 ( . ) 3 3 1 ( . . ) 2 0 1 0 2 ( - - . ) 1 0 7 9 2 ( . 3 6 5 5 8 1 , - - - - - - - - - - t n u o m A ) e r o r c ₹ ( l a t o T f o % s A d e t a d i l o s n o c e m o c n i e v i s n e h e r p m o c t n u o m A ) e r o r c ₹ ( - 4 6 5 1 . - 5 1 0 . 0 9 1 . - - - - 5 0 2 . . 5 2 8 3 8 r e h t O f o % s A d e t a d i l o s n o c e m o c n i e v i s n e h e r p m o c t fi o r p t n u o m A ) e r o r c ₹ ( f o % s A d e t a d i l o s n o c t n u o m A ) e r o r c ₹ ( f o % s A d e t a d i l o s n o c e m o c n i l a t o t t n u o m A ) e r o r c ₹ ( f o % s A s t e s s a t e n d e t a d i l o s n o c - - - - - - - - - - . ) 2 8 4 3 6 1 ( , - ) 8 9 6 ( . ) 3 8 7 8 ( . ) 3 3 1 ( . . ) 2 9 2 0 2 ( - - . ) 6 0 9 9 2 ( . 8 3 7 1 0 1 , - - - - - - - - - - . ) 7 1 4 2 4 5 ( , - - - - - - - - . 6 0 9 8 5 9 2 , - - - - - - - - - - . ) 6 5 4 1 0 5 2 ( , - ) 1 3 2 3 ( . . ) 7 3 7 3 5 ( . ) 2 8 1 0 7 1 ( , ) 6 7 1 1 ( . ) 6 8 9 1 ( . ) 2 9 8 2 ( . . ) 4 0 2 3 3 2 ( , . 2 0 6 6 5 9 1 , - - - - - - - - - - 3 ) d e t a d i l o s n o C ( . k b T n a a d n A l i g r e n E r e b m u S T P s e i r a i d i s b u S n g i e r o F l a t o T x a t r e t f a t fi o r P / s t e s s A t e N d e t a d i l o s n o C . d t L n o i t u b i r t s i D i l h e D r e w o P a t a T . d t L r e w o P n o h t i a M . d t L a r f n I L P D N . i d t L m r a f d n W d a v a o o P l i 1 ) d e t a d i l o s n o C ( . d t L o c l e N s e i r a i d i s b u S n a i d n I n o i t a d i l o s n o c f o t u o g n i s i r a s t n e m t s u d A j t s e r e t n I g n i l l o r t n o C - n o N ) a ) b e m o c n I e v i s n e h e r p m o C e m o c n I e v i s n e h e r p m o C ) s s o L ( e m o c n I l r e h t O s u P e u n e v e R s e i t i l i b a i l l a t o t s u n m i l a t o T n i e r a h S r e h t O n i e r a h S r o t fi o r P f o e r a h S . e . i e m o c n I l a t o T s t e s s a l a t o t . e . i s t e s s A t e N ) . d t n o C ( s t s e r e t n I g n i l l o r t n o C n o N d n a s r e n w O o t e l b a t u b i r t t a s s o L d n a t fi o r P d n a s t e s s A t e N f o t n e m e t a t S . 3 4 454 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 43. Statement of Net Assets and Profit and Loss attributable to Owners and Non Controlling Interests (Contd.) Reconciliation of Total Income (i.e. Revenue plus other income) Total Income as per Statement of Profit & Loss Net Movement in Regulatory Deferral Balances (Net) Remeasurement of Deferred Tax Recoverable on account of New Tax Regime (Net) Add: Revenue from Discontinued Operations Total Income as per the above statement Note: ₹ crore 29,698.98 (188.69) (265.00) 29,245.29 343.77 29,589.06 1. Accounts of Tatanet Services Ltd. have been consolidated with Nelco Ltd. 2. Accounts of all subsidiaries of Walwhan Renewable Energy Ltd. (Refer Note 2.6) have been consolidated with Walwhan Renewable Energy Ltd. 3. Accounts of PT Mitratama Perkasa have been consolidated with PT Sumber Energi Andalan Tbk. 4. Accounts of PT Citra Prima Buana, PT Guruh Agung and PT Citra Kusuma Perdana have been consolidated with PT Kalimantan Prima Power. 5. Accounts of PT Antang Gunung Meratus have been consolidated with PT Baramulti Sukessarana Tbk. 6. Accounts of Adjaristsqali Georgia LLC have been consolidated with Adjaristsqali Netherlands BV. 7. Accounts of Koromkheti Georgia LLC have been consolidated with Koromkheti Netherlands BV. # Includes Discontinued Operations 43.1 Summarised Financial Information of Material Non Controlling Interests Financial Information of Subsidiaries that have material non-controlling interest is provided below: Proportion of equity interest held by non-controlling interests: Name Maithon Power Ltd. Tata Power Delhi Distribution Ltd. Country of Incorporation 31st March, 2020 31st March, 2019 India India 26% 49% 26% 49% A Maithon Power Ltd. (i) Summarised Balance Sheet: Non-current Assets Current Assets Non-current Liabilities Current Liabilities Attributable to: Equity holders of parent Non-controlling interest As at 31st March, 2020 ₹ crore As at 31st March, 2019 ₹ crore 3,741.21 860.24 (1,337.24) (1,195.78) 2,068.43 3,812.79 1,047.49 (1,805.34) (974.33) 2,080.61 1,531.08 537.35 1,540.09 540.52 455 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 43. Summarised Financial Information of Material Non Controlling Interests (Contd.) (ii) Summarised Statement of Profit and Loss: Revenue Other Income Cost of Power Purchased Cost of Fuel Employee Benefits Expenses Finance Cost Depreciation and Amortisation Expenses Other Expenses Profit before tax Tax Expenses Profit for the year Other Comprehensive Income/(Expense) for the year Total Comprehensive Income for the year Attributable to: Equity holders of parent Non-controlling interest Dividend including Dividend Distribution Tax Attributable to: Equity holders of parent Non-controlling interest (iii) Summarised Cash Flow information: Operating Activities Investing Activities Financing Activities Net (Decrease) / Increase in Cash and Cash Equivalents B Tata Power Delhi Distribution Ltd. (i) Summarised Balance Sheet: Non-current Assets Current Assets Assets classified as held for sale Regulatory Deferral Account Debit Balances Non-current Liabilities Current Liabilities Attributable to: Equity holders of parent Non-controlling interest 456 For the year ended 31st March, 2020 ₹ crore 2,741.17 28.33 (1.78) (1,575.51) (40.80) (193.11) (243.81) (257.83) 456.66 (118.84) 337.82 Nil 337.82 For the year ended 31st March, 2019 ₹ crore 2,776.05 65.05 (1.40) (1,769.85) (41.18) (204.85) (238.24) (226.86) 358.72 (85.82) 272.90 (0.32) 272.58 249.99 87.83 259.00 91.00 201.71 70.87 129.50 45.50 For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019 ₹ crore 1,355.86 (295.63) (975.68) 84.55 (2.74) (23.97) (23.28) (49.99) As at 31st March, 2020 ₹ crore 4,408.09 1,090.56 20.04 5,221.85 (4,946.65) (2,320.76) 3473.13 As at 31st March, 2019 ₹ crore 4,162.00 945.88 20.04 4,759.14 (4,172.86) (2,531.56) 3,182.64 1,771.32 1701.81 1,623.17 1,559.47 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 43. Summarised Financial Information of Material Non Controlling Interests (Contd.) (ii) Summarised Statement of Profit and Loss: Revenue including Regulatory income/(expense) Other Income Cost of Power Purchased Employee Benefits Expenses Finance Cost Depreciation and Amortisation Expenses Other Expenses Exceptional Items Profit before tax Tax Expenses Profit for the year Other Comprehensive Income/(Expense) for the year Total Comprehensive Income for the year Attributable to: Equity holders of parent Non-controlling interest Dividend including Dividend Distribution Tax Attributable to: Equity holders of parent Non-controlling interest (iii) Summarised Cash Flow information: Operating Activities investing Activities Financing Activities Net (Decrease) / Increase in Cash and Cash Equivalents For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019 ₹ crore 8,350.66 105.32 (6,299.63) (504.90) (344.90) (333.16) (327.33) Nil 646.06 (231.92) 414.14 (3.87) 410.27 209.24 201.03 7,849.84 108.02 (5,896.86) (469.70) (348.88) (309.64) (318.94) (106.40) 507.44 (171.57) 335.87 (0.40) 335.47 171.10 164.37 61.09 58.69 54.30 52.17 For the year ended 31st March, 2020 ₹ crore For the year ended 31st March, 2019 ₹ crore 671.99 (625.09) (32.62) 14.28 1,055.05 (597.21) (535.56) (77.72) 457 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 44. Restated Consolidated Financial Statements for the year ended 31st March, 2019 and as at 1st April, 2018 Consolidated Balance Sheet as at 31st March, 2019 Reported Amount Restatements Restated Amount Note ₹ crore ₹ crore ₹ crore 1 2 2 1 41,101.50 2,575.70 1,641.57 1,561.82 11,989.69 861.41 192.99 144.73 565.62 316.75 238.01 89.49 1,358.07 62,637.35 Nil Nil Nil Nil 523.79 Nil Nil (54.17) Nil Nil Nil Nil Nil 469.62 41,101.50 2,575.70 1,641.57 1,561.82 12,513.48 861.41 192.99 90.56 565.62 316.75 238.01 89.49 1,358.07 63,106.97 1,706.42 Nil 1,706.42 166.98 4,445.26 837.85 645.45 142.00 116.46 37.90 241.59 2.67 1,881.85 10,224.43 5,542.12 78,403.90 5,758.13 84,162.03 Nil Nil Nil Nil Nil (29.28) Nil Nil Nil Nil (29.28) (439.44) 0.90 Nil 0.90 166.98 4,445.26 837.85 645.45 142.00 87.18 37.90 241.59 2.67 1,881.85 10,195.15 5,102.68 78,404.80 5,758.13 84,162.93 ASSETS Non-current Assets (a) Property, Plant and Equipment (b) Capital Work-in-Progress (c) Goodwill (d) Other Intangible Assets (e) (f ) Financial Assets Investments accounted for using the Equity Method (i) Other Investments (ii) Trade Receivables (iii) Loans (iv) Finance Lease Receivables (v) Other Financial Assets (g) Non-current Tax Assets (Net) (h) Deferred Tax Assets (Net) (i) Other Non-current Assets Total Non-current Assets Current Assets Inventories (a) (b) Financial Assets (i) Investments (ii) Trade Receivables (iii) Unbilled Revenue (iv) Cash and Cash Equivalents (v) Bank Balances other than (iv) above (vi) Loans (vii) Finance Lease Receivables (viii) Other Financial Assets (c) Current Tax Assets (Net) (d) Other Current Assets Total Current Assets Assets Classified as Held For Sale Total Assets before Regulatory Deferral Account Regulatory Deferral Account - Assets TOTAL ASSETS 458 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 44. Restated Consolidated Financial Statements for the year ended 31st March, 2019 and as at 1st April, 2018 (contd.) Reported Amount Restatements Restated Amount Note ₹ crore ₹ crore ₹ crore EQUITY AND LIABILITIES Equity (a) Equity Share Capital (b) Unsecured Perpetual Securities (c) Other Equity Equity attributable to Shareholders of the Company Non-controlling Interests Total Equity LIABILITIES Non-current Liabilities (a) Financial Liabilities (i) Borrowings (ii) Lease Liabilities (iii) Trade Payables (iv) Other Financial Liabilities (b) Non-current Tax Liabilities (Net) (c) Deferred Tax Liabilities (Net) (d) Provisions (e) Other Non-current Liabilities Total Non-current Liabilities Current Liabilities (a) Financial Liabilities (i) Borrowings (ii) Lease Liabilities (iii) Trade Payables (iv) Other Financial Liabilities (b) Current Tax Liabilities (Net) (c) Provisions (d) Other Current Liabilities Total Current Liabilities Liabilities directly associated with Assets Classified as Held For Sale Total Liabilities before Regulatory Deferral Account Regulatory Deferral Account - Liability TOTAL EQUITY AND LIABILITIES 1 2 270.50 1,500.00 16,450.66 18,221.16 2,166.66 20,387.82 31,139.23 Nil 22.75 687.31 3.74 1,056.81 333.60 1,873.75 35,117.19 13,875.38 Nil 5,481.49 6,480.79 150.22 177.00 1,499.64 27,664.52 992.50 63,774.21 Nil 84,162.03 Nil Nil 84.35 84.35 Nil 84.35 270.50 1,500.00 16,535.01 18,305.51 2,166.66 20,472.17 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil (83.45) Nil (83.45) Nil (83.45) Nil 0.90 31,139.23 Nil 22.75 687.31 3.74 1,056.81 333.60 1,873.75 35,117.19 13,875.38 Nil 5,481.49 6,480.79 150.22 93.55 1,499.64 27,581.07 992.50 63,690.76 Nil 84,162.93 459 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 44. Restated Consolidated Financial Statements for the year ended 31st March, 2019 and as at 1st April, 2018 (Contd.) Consolidated Balance Sheet as at 1st April, 2018 Reported Amount Restatements Restated Amount Note ₹ crore ₹ crore ₹ crore 1 2 2 1 41,431.61 1,652.60 1,641.57 1,583.08 11,111.66 881.11 190.05 131.73 574.76 273.68 167.59 118.17 1,577.31 61,334.92 Nil Nil Nil Nil 418.61 Nil Nil (54.17) Nil Nil Nil Nil Nil 364.44 41,431.61 1,652.60 1,641.57 1,583.08 11,530.27 881.11 190.05 77.56 574.76 273.68 167.59 118.17 1,577.31 61,699.36 1,623.08 Nil 1,623.08 436.16 2,788.93 810.09 1,061.16 124.62 784.80 34.27 401.59 14.77 1,512.32 9,591.79 4,778.70 75,705.41 6,304.56 82,009.97 Nil Nil Nil Nil Nil (30.33) Nil Nil Nil Nil (30.33) (439.44) (105.33) Nil (105.33) 436.16 2,788.93 810.09 1,061.16 124.62 754.47 34.27 401.59 14.77 1,512.32 9,561.46 4,339.26 75,600.08 6,304.56 81,904.64 ASSETS Non-current Assets (a) Property, Plant and Equipment (b) Capital Work-in-Progress (c) Goodwill (d) Other Intangible Assets (e) (f ) Financial Assets Investments accounted for using the Equity Method (i) Other Investments (ii) Trade Receivables (iii) Loans (iv) Finance Lease Receivables (v) Other Financial Assets (g) Non-current Tax Assets (Net) (h) Deferred Tax Assets (Net) (i) Other Non-current Assets Total Non-current Assets Current Assets Inventories (a) (b) Financial Assets (i) Investments (ii) Trade Receivables (iii) Unbilled Revenue (iv) Cash and Cash Equivalents (v) Bank Balances other than (iv) above (vi) Loans (vii) Finance Lease Receivables (viii) Other Financial Assets (c) Current Tax Assets (Net) (d) Other Current Assets Total Current Assets Assets Classified as Held For Sale Total Assets before Regulatory Deferral Account Regulatory Deferral Account - Assets TOTAL ASSETS 460 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 44. Restated Consolidated Financial Statements for the year ended 31st March, 2019 and as at 1st April, 2018 (contd.) Reported Amount Restatements Restated Amount Note ₹ crore ₹ crore ₹ crore EQUITY AND LIABILITIES Equity (a) Equity Share Capital (b) Unsecured Perpetual Securities (c) Other Equity Equity attributable to Shareholders of the Company Non-controlling Interests Total Equity LIABILITIES Non-current Liabilities (a) Financial Liabilities (i) Borrowings (ii) Lease Liabilities (iii) Trade Payables (iv) Other Financial Liabilities (b) Non-current Tax Liabilities (Net) (c) Deferred Tax Liabilities (Net) (d) Provisions (e) Other Non-current Liabilities Total Non-current Liabilities Current Liabilities (a) Financial Liabilities (i) Borrowings (ii) Lease Liabilities (iii) Trade Payables (iv) Other Financial Liabilities (b) Current Tax Liabilities (Net) (c) Provisions (d) Other Current Liabilities Total Current Liabilities Liabilities directly associated with Assets Classified as Held For Sale Total Liabilities before Regulatory Deferral Account Regulatory Deferral Account - Liability TOTAL EQUITY AND LIABILITIES 1 2 270.50 1,500.00 14,629.38 16,399.88 2,015.29 18,415.17 22,356.31 Nil 21.00 647.31 3.74 516.56 300.00 1,841.48 25,686.40 18,827.28 Nil 5,609.82 9,942.98 160.38 193.44 1,785.72 36,519.62 903.78 63,109.80 485.00 82,009.97 Nil Nil (20.83) (20.83) Nil (20.83) 270.50 1,500.00 14,608.55 16,379.05 2,015.29 18,394.34 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil (84.50) Nil (84.50) Nil (84.50) Nil (105.33) 22,356.31 Nil 21.00 647.31 3.74 516.56 300.00 1,841.48 25,686.40 18,827.28 Nil 5,609.82 9,942.98 160.38 108.94 1,785.72 36,435.12 903.78 63,025.30 485.00 81,904.64 461 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 44. Restated Consolidated Financial Statements for the year ended 31st March, 2019 and as at 1st April, 2018 (Contd.) Statement of Profit and Loss for the year ended 31st March, 2019 Reported Amount Restatements Restated Amount I II III IV Revenue from Operations Other Income Total Income Expenses Cost of Power Purchased Cost of Fuel Raw Material Consumed Purchase of Finished Goods, Spares and Shares Transmission Charges (Increase)/Decrease in Stock-in-Trade and Work in Progress Employee Benefits Expense Finance Costs Depreciation and Amortisation Expenses Other Expenses Total Expenses V Profit/(Loss) Before Movement in Regulatory Deferral Balances, Exceptional Items, Tax and Share of Net Profit of Associates and Joint Ventures accounted for using the Equity Method Add/(Less): Net movement in Regulatory Deferral Balances Add/(Less): Net movement in Regulatory Deferral Balances in respect of earlier years Add/(Less): Deferred Tax Recoverable/(Payable) VI Profit/(Loss) Before Exceptional Items, Tax and Share of Net Profit of Associates and Joint Ventures accounted for using the Equity Method Share of Net Profit of Associates and Joint Ventures accounted for using the Equity Method VII Profit/(Loss) Before Exceptional Items and Tax Less : Exceptional Items Impairment in respect of Property, Plant and Equipment Provision for Contingencies Gain on Sale of Investments in Associates VIII Profit/(Loss) Before Tax IX Tax Expense/(Credit) Current Tax Deferred Tax Deferred Tax relating to earlier years Deferred Tax Recoverable/(Payable) X XI Profit/(Loss) for the Year from Continuing Operations Profit/(Loss) before tax from Discontinued Operations Note 3 1 3 1 2 4 1 ₹ crore 29,558.64 395.83 29,954.47 6,359.53 11,640.02 919.35 345.22 248.23 24.37 1,339.05 4,170.00 2,393.13 2,260.15 29,699.05 255.42 (340.19) 274.26 Nil (65.93) ₹ crore 322.42 (9.68) 312.74 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil 312.74 Nil Nil 169.20 169.20 ₹ crore 29,881.06 386.15 30,267.21 6,359.53 11,640.02 919.35 345.22 248.23 24.37 1,339.05 4,170.00 2,393.13 2,260.15 29,699.05 568.16 (340.19) 274.26 169.20 103.27 189.49 481.94 671.43 1,287.02 1,476.51 (106.41) (45.00) 1,897.24 1,745.83 3,222.34 584.78 544.02 18.91 (491.62) 656.09 2,566.25 (191.82) 114.81 596.75 Nil Nil Nil Nil 596.75 (60.12) Nil Nil 491.62 431.50 165.25 Nil 1,401.83 2,073.26 (106.41) (45.00) 1,897.24 1,745.83 3,819.09 524.66 544.02 18.91 Nil 1,087.59 2,731.50 (191.82) 462 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 44. Restated Consolidated Financial Statements for the year ended 31st March, 2019 and as at 1st April, 2018 (contd.) Statement of Profit and Loss for the year ended 31st March, 2019 Reported Amount Restatements Restated Amount Note ₹ crore ₹ crore ₹ crore XII Tax Expense/(Credit) of Discontinued Operations Current Tax Deferred Tax Tax Expense/(Credit) of Discontinued Operations XIII Profit/(Loss) for the Year from Discontinued Operations XIV Profit/(Loss) for the Year XV Other Comprehensive Income/(Expenses) - Continuing Operations A (i) Items that will not be reclassified to Profit or Loss (a) Remeasurement of the Defined Benefit Plans (b) Equity Instruments classified FVTOCI (c) Gain on sale of Investment classified at FVTOCI (d) Assets Classified as Held For Sale - Equity Instruments classified at FVTOCI (ii) Tax relating to items that will not be reclassified to Profit or Loss (a) Current Tax (b) Deferred Tax (iii) Share of Other Comprehensive Income/(Loss) of Associates and Joint B (i) Ventures accounted for using the Equity Method (net of tax) Items that will be reclassified to Profit or Loss (a) Exchange differences in translating the financial statements of foreign operations (ii) Share of Other Comprehensive Income/(Loss) of Associates and Joint Ventures accounted for using the Equity Method (net of tax) 1 1 Other Comprehensive Income/(Expense) XVI Other Comprehensive Income - Discontinued Operations A (i) (ii) Items that will not be reclassified to Profit or Loss Income tax relating to items that will not be reclassified to Profit or Loss XVII Total Other Comprehensive Income for the year (XV + XVI) XVIII Total Comprehensive Income for the year (XIV + XVII) Profit for the year attributable to: - Owners of the Company - Non-controlling interest Other comprehensive Income for the year attributable to: - Owners of the Company - Non-controlling interest Total Comprehensive Income for the year attributable to: - Owners of the Company - Non-controlling interest XIX Basic and Diluted Earnings Per Equity Share (of ₹ 1/- each) (₹) (i) From Continuing Operations before net movement in regulatory deferral balances (ii) From Continuing Operations after net movement in regulatory deferral balances (iii) From Discontinued Operations (iv) Total Operations after net movement in regulatory deferral balances (71.92) 5.94 (65.98) (125.84) 2,440.41 Nil Nil Nil Nil 165.25 (71.92) 5.94 (65.98) (125.84) 2,605.66 (23.91) 2.68 1.66 (31.05) 6.81 (0.06) Nil Nil Nil Nil Nil Nil (1.37) (0.06) 187.18 23.24 165.18 (1.14) 0.40 (0.74) 164.44 Nil 0.11 0.05 Nil Nil Nil 0.05 (23.91) 2.68 1.66 (31.05) 6.81 (0.06) (1.43) 187.18 23.35 165.23 (1.14) 0.40 (0.74) 164.49 2,604.85 165.30 2,770.15 2,190.94 249.47 2,440.41 164.87 (0.43) 164.44 2,355.81 249.04 2,604.85 8.30 8.15 (0.46) 7.69 165.25 Nil 165.25 0.05 Nil 0.05 165.30 Nil 165.30 (0.01) 0.39 Nil 0.39 2,356.19 249.47 2,605.66 164.92 (0.43) 164.49 2,521.11 249.04 2,770.15 8.29 8.54 (0.46) 8.08 463 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 44. Restated Consolidated Financial Statements for the year ended 31st March, 2019 and as at 1st April, 2018 (Contd.) Reconciliation of Total Equity as at 31st March, 2019 and 1st April, 2018 Equity as per Reported Financial Statements Equity Share Capital Unsecured Perpetual Securities Other Equity Recognition of Share of Profit of Associate Equity as per Restated Financial Statements As at 31st March, 2019 ₹ crore As at 1st April, 2018 ₹ crore 270.50 1,500.00 16,450.66 18,221.16 270.50 1,500.00 14,629.38 16,399.88 84.35 (20.83) 18,305.51 16,379.05 Reconciliation of Total Comprehensive Income for the year ended 31st March, 2019 Total Comprehensive Income as per Reported Financial Statements Other Income Share of Net Profit of Associates and Joint Ventures accounted for using the Equity Method Tax Expense Share of other comprehensive income that will not be reclassified to profit or loss of associates and joint ventures accounted for using the equity method Share of other comprehensive income that will be reclassified to profit or loss of associates and joint ventures accounted for using the equity method Total Comprehensive Income as per Restated Financial Statements For the year ended 31st March, 2019 ₹ crore 2,604.85 (9.68) 114.81 60.12 (0.06) 0.11 2,770.15 Notes: 1. In the earlier years, the Group had intended to sell its investment in Tata Projects Ltd. (Associate company of the Group) and had initiated the process to identify the suitable buyer. Accordingly, the Group had classified the investment as assets held for sale. During the year, the Group has reassessed its plan to sell its investment in Tata Projects Ltd. and accordingly, has reclassified its investment in Tata Projects Ltd from ‘Asset held for sale’ to ‘Investments in Associate accounted under equity method’. As per Ind AS 28 - 'Investments in Associates and Joint Ventures', the said reclassification is required from the date of classification to ‘Assets held for sale’ and hence, comparative figures have been restated. The Group has recognized its share of profit from date of classification to 1st April, 2018 in Other Equity and profit from 1st April, 2018 to 31st March, 2019 in Statement of profit or loss and other comprehensive income for the year ended 31st March, 2019. Dividend received from Tata Projects Ltd. in the previous year has been reversed and adjusted in the carrying value of investment. 2. The Group hitherto followed a practice of presenting loans given to joint venture and Group’s share of provision for losses of such joint venture separately in the balance sheet. During the year, the Group has reassessed its policy for such presentation and has now netted off the provision of losses with the loan given to joint venture. There is no impact in the Other Equity and Profit/ (Loss) on account of such change in presentation. 3. Refer Note 3.15 4. Refer Note 3.14 5. There is no significant impact on the Cash flows of the Group for the year ended 31st March, 2019. 6. As required by Ind AS 1 – Presentation of Financial Statements, the Group has presented Balance Sheet as at 1st April, 2018 for retrospective application of changes in accounting policies. The Group has given a detailed note for changes in accounting policies and has disclosed the impact on the financial statements in the above notes and accordingly, accompanying notes to Balance Sheet as at 1st April, 2018 has not been disclosed in the Consolidated Ind AS financial statements. 464 The Tata Power Company Limited Integrated Annual Report 2019-20Notes to the Consolidated Financial Statements 45. Impact of COVID-19 India and other global markets experienced significant disruption in operations resulting from uncertainty caused by the worldwide coronavirus pandemic. Majority of Group’s business includes generation, transmission and distribution of power. The Group also has investments in joint ventures and associates involved in coal mining and providing Engineering, Procurement & Construction services (‘EPC’). Considering power supply being an essential service, management believes that there is not much of an impact likely due to this pandemic except that there exists some uncertainty over impact of COVID-19 on future business performance of its coal mining companies and its EPC operations. Management believes that the said uncertainty is not likely to impact the recoverability of the carrying value its investment in such joint ventures and associate. The Group is also closely monitoring developments, its operations, liquidity and capital resources and is actively working to minimize the impact of this unprecedented situation. Further, some generating units of the Group has received notices primarily from state distribution companies (together referred to as Discoms) invoking the provisions of Force Majeure provided in the Power Purchase Agreement (PPA) and notifying the event of lockdown as a force majeure event. Discoms have claimed that no cause of action for breach or liability should arise on account of impossible performance of PPA as a consequence of Force Majeure and also claimed that no Late Payment Surcharge for payments which become delayed beyond due date of bill shall be payable. The Group has replied to these notices rejecting the claims made by Discoms relying upon the order of Central Electricity Regulatory Commission dated 3rd April, 2020 clarification issued by Ministry of Power dated 6th April, 2020 and Ministry of New and Renewable Energy circular dated 4th April, 2020. The Group has not received any response to its replies from Discoms. Management believes there is no merit to the claims made by Discoms and accordingly no impact has been given in the financial statements. 46. Approval of Consolidated Financial Statements The Consolidated financial statements were approved for issue by the Board of Directors on 19th May, 2020. As per our report of even date For S R B C & CO LLP Chartered Accountants ICAI Firm Registration No.324982E/E300003 per ABHISHEK AGARWAL Partner Membership No. 112773 Mumbai, 19th May, 2020 For and on behalf of the Board, PRAVEER SINHA CEO & Managing Director DIN 01785164 BANMALI AGRAWALA Director DIN 00120029 RAMESH SUBRAMANYAM Chief Financial Officer H. M. MISTRY Company Secretary Mumbai, 19th May, 2020 465 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm 4 0 0 5 . l i N . 0 0 0 0 1 l i N . 0 0 0 0 1 l i N 0 0 4 7 . l i N . 0 0 0 0 1 l i N . 0 0 0 0 1 l i N . 0 0 0 0 1 l i N . 0 0 0 0 1 l i N . 0 0 0 0 1 l i N 0 0 1 5 . l i N . 0 0 0 0 1 l i N . 0 0 0 0 1 l i N . 0 0 0 0 1 l i N . 0 0 0 0 1 l i N . 0 0 0 0 1 l i N . 0 0 0 0 1 l i N . 0 0 0 0 1 l i N 0 0 1 5 . l i N . 0 0 0 0 1 l i N 0 5 . 2 9 l i N . 0 0 0 0 1 l i N . 0 0 0 0 1 l i N 0 0 4 7 . l i N 7 0 7 5 . l i N . 0 0 0 0 1 l i N . 0 0 0 0 1 l i N 0 0 2 7 . l i N . 0 0 0 0 1 l i N . 0 0 0 0 1 l i N . 0 0 0 0 1 l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N ) e r o r c ₹ ( f o % d e s o p o r P d e s o p o r P / t fi o r P n o i s i v o r P / t fi o r P g n i d l o h n o y t i u q E s e r a h S n o y t i u q E s e r a h S - - e r a h s d n e d i v i D d n e d i v i D ) % ( n o i t a x a t . l c n i ( ) s s o L ( r e t f a r o f n o i t a x a t ) s s o L ( e r o f e b n o i t a x a t ) x a t d e r r e f e D l a t o T e m o c n I r e h t O e m o c n I - n r u T 4 1 r e v o - t s e v n I s t n e m t e N s t e s s A l a t o T s e i t i l i b a i L . h S . l c x E ( & l a t i p a C ) s e v r e s e R l a t o T s t e s s A r e h t O y t i u q E ) t s e r e t n I - n o N . l c n I ( g n i l l o r t n o c e r a h S l a t i p a c . f e r P . l c n I ( d n a s e r a h s l a u t e p r e P ) s e i t i r u c e S s e i r a i d i s b u S : " A " t r a P 8 3 . 4 1 8 8 5 . 6 2 . 0 2 . 9 6 3 2 2 6 7 3 . . 3 9 9 1 2 6 1 0 . 9 8 5 6 . . 8 1 4 1 2 . 7 0 0 8 2 7 0 3 4 . 2 8 . 2 2 7 4 0 1 . 1 2 1 . 8 6 1 1 . 2 3 . 2 1 1 3 . 0 1 0 2 1 . . 5 7 2 6 2 . 1 6 3 6 2 8 3 . 2 . 9 9 5 6 2 8 8 . 2 5 2 3 7 0 1 . . 1 7 0 4 9 4 9 . . 9 1 0 5 . 8 8 1 5 2 4 9 3 . . 4 9 7 4 2 l i N . 1 2 9 6 2 . 2 0 1 4 4 3 2 . 0 1 7 1 5 . 6 1 2 0 0 6 1 . . 2 8 7 3 3 4 8 . 8 1 1 . 6 6 6 5 4 . 0 5 9 6 7 2 , 3 3 . 8 2 . 7 1 1 4 7 2 , 3 3 . 6 6 1 . 3 4 8 6 0 2 , . 2 0 3 3 5 2 , . 5 4 1 0 6 4 , . 1 5 9 5 5 . 2 9 8 0 5 1 , e t a R t a s a t s 1 3 0 2 0 2 , h c r a M 0 0 1 . 0 0 1 . 0 0 1 . 0 0 1 . y c n e r r u c d o i r e p e h t r o f y r a i d i s b u s d e n r e c n o c g n i r i u q c a y r a i d i s b u s e e p u R i n a d n I 0 2 - r a M - 1 3 5 0 - c e D - 1 3 1 ) d e t a d i l o s n o C ( . d t L O C L E N e e p u R n a d n i I 0 2 - r a M - 1 3 0 0 - v o N - 7 2 . d t L . o C t n e m t s e v n I b a a T - f A e e p u R n a d n i I 0 2 - r a M - 1 3 3 0 - c e D - 1 3 . d t L . i o C g n d a r T r e w o P a t a T e e p u R n a d n i I 0 2 - r a M - 1 3 5 0 - p e S - 2 0 . d t L r e w o P n o h t i a M e g n a h c x E g n i t r o p e R g n i t r o p e R f o e t a D y r a i d i s b u S e h t f o e m a N N S ) 4 5 . 0 9 8 ( l i N ) 4 5 . 0 9 8 ( 6 8 . 6 3 0 7 , 9 9 9 1 . 7 8 . 6 1 0 7 , l i N . 3 1 2 3 0 4 , , . 8 3 9 7 4 4 1 1 5 1 1 5 . , 8 1 . ) 7 1 4 0 0 1 1 ( , 0 3 . 6 3 0 5 1 , 0 0 1 . e e p u R n a d n i I 0 2 - r a M - 1 3 7 0 - r p A - 2 2 . d t L r e w o P t a r a j u G l a t s a o C i s e r u t n e V t n o J / s e i n a p m o C e t a i c o s s A / s e i r a i d i s b u S f o t n e m e t a t s l a i c n a n fi e h t f o s e r u t a e f i t n e i l a s g n n i a t n o c t n e m e t a t S I - C O A M R O F 466 1 2 3 4 5 6 7 8 9 7 8 . 2 6 3 1 , . 9 2 3 7 1 . 6 1 6 3 5 1 , . 6 7 4 8 6 1 , . 1 0 4 8 6 1 5 7 0 . , . 1 7 6 8 2 4 , . 7 4 4 3 0 2 , . 3 9 9 8 6 3 , ) 8 0 5 5 ( . l i N ) 8 0 5 5 ( . l i N l i N l i N . 6 8 5 6 2 3 , . 2 4 9 2 9 . 8 4 6 3 3 2 , . 6 0 5 9 3 4 0 0 1 . . 0 1 5 0 4 6 2 . 6 0 5 6 2 . 6 0 5 l i N l i N 9 2 . 4 5 8 9 5 . 6 1 7 1 , . 0 4 4 2 7 5 , . 0 9 5 6 2 3 , . 8 8 0 7 5 2 , ) 1 0 0 ( . l i N ) 1 0 0 ( . ) 1 1 3 ( . ) 3 0 0 ( . ) 4 1 3 ( . l i N l i N . 5 8 4 8 1 3 4 1 1 . 9 2 . 6 9 1 . 4 1 4 1 4 . 2 9 1 3 2 . 7 0 6 4 6 . 4 4 0 9 0 1 , . 6 2 3 9 9 7 , l i N l i N 3 3 . 4 . 1 3 5 0 1 . 1 1 6 8 0 1 , l i N l i N . 5 9 7 8 8 7 , 6 0 3 3 . 5 0 5 8 . l i N l i N ) 8 1 7 4 ( . 4 2 9 4 . 6 0 2 . . 1 0 4 5 9 5 5 . 6 3 . 6 4 7 1 9 . 1 1 2 2 9 3 , . 2 4 0 5 5 1 , . 6 3 5 0 0 2 , . 8 7 5 5 5 3 , ) 2 3 1 ( . 7 5 . 2 ) 6 0 3 ( . 9 7 1 1 . 5 2 1 . 3 7 8 . . 7 6 0 3 0 5 , 5 2 . 4 1 4 6 , . 2 9 4 4 4 1 1 , ) 8 6 0 ( . ) 0 2 . 0 ( l i N l i N ) 8 6 0 ( . ) 0 2 . 0 ( l i N l i N . 8 6 2 2 1 7 2 . 4 3 . 5 9 6 5 1 . 0 1 6 6 1 2 , l i N l i N 0 4 5 2 . l i N l i N l i N l i N ) 3 6 0 ( . 8 6 0 . ) 5 1 0 ( . 0 2 . 0 5 0 0 . 5 0 0 . . 0 7 0 4 1 2 , 1 2 7 3 . . 9 7 1 9 6 . 3 6 7 0 3 1 , . 2 4 9 9 9 1 , 3 6 5 5 . 9 1 4 . 2 8 9 5 . . 8 7 6 5 3 . 8 1 3 6 2 0 6 3 9 . . 7 5 5 7 1 1 , 1 5 . 0 8 . 3 9 8 3 2 1 , . 4 4 9 1 3 1 , 7 3 . 0 3 0 2 , 0 1 4 . 4 5 5 7 . r a l l o D S U 0 2 - r a M - 1 3 7 0 - n u J - 2 2 3 1 . d t L s t n e m t s e v n I a r i h B . 5 3 5 2 9 8 0 4 . 4 5 5 7 . r a l l o D S U 0 2 - r a M - 1 3 7 0 - n u J - 2 2 3 1 . d t L s t n e m t s e v n I i r u p v h B i . 9 0 9 9 5 . 0 2 5 5 2 4 5 5 7 . r a l l o D S U 0 2 - r a M - 1 3 7 0 - y a M - 7 1 3 1 . d t L s t n e m t s e v n I i l o p o h K . 5 9 5 4 9 . 7 4 4 0 6 4 5 5 7 . r a l l o D S U 0 2 - r a M - 1 3 8 0 - r a M - 1 1 3 1 . d t L . e t P s e c r u o s e R y g r e n E t s u r T ) 7 3 9 ( . ) 7 1 3 ( . 6 5 . 0 9 l i N l i N l i N l i N 5 0 8 . 1 1 0 . . 1 1 0 4 9 4 , 0 0 1 . 0 0 1 . 0 0 1 . 0 0 1 . 0 0 1 . e e p u R n a d n i I 0 2 - r a M - 1 3 2 1 - v o N - 6 0 . d t L n o i t u b i r t s i D r u p d e h s m a J r e w o P a t a T 1 1 e e p u R n a d n i I 0 2 - r a M - 1 3 7 0 - r a M - 8 2 d t L d i r g o r c i M e b a w e n e R P T l 2 1 e e p u R n a d n i I 0 2 - r a M - 1 3 7 0 - r a M - 8 2 . l d t L y g r e n E e b a w e n e R r e w o P a t a T 3 1 e e p u R n a d n i I 0 2 - r a M - 1 3 0 2 - b e F - 9 1 e e p u R n a d n i I 0 2 - r a M - 1 3 0 2 - b e F - 6 2 . d t L i l a n r i K P T 4 1 . d t L r u p a o S P T l 5 1 . 2 0 2 6 4 . 8 7 9 2 2 0 0 1 . e e p u R n a d n i I 0 2 - r a M - 1 3 2 1 - n u J - 8 2 . d t L s l m e t s y S r a o S r e w o P a t a T 6 1 . ) 5 0 9 7 4 ( . 7 5 9 5 5 4 5 5 7 . r a l l o D S U 0 2 - r a M - 1 3 3 1 - r p A - 5 0 3 1 . d t L . e t P l a n o i t a n r e t n I r e w o P a t a T 7 1 . 2 1 3 7 4 3 , . 2 4 7 6 2 7 , 4 5 . 0 4 7 0 1 , . 2 1 1 2 9 2 , . 0 0 2 5 5 0 0 1 . e e p u R n a d n i I 0 2 - r a M - 1 3 8 0 - n a J - 2 2 . d t L n o i t u b i r t s i D i l h e D r e w o P a t a T 0 1 0 7 2 . 9 8 0 . 9 5 3 . 1 3 . 6 0 5 1 . 1 8 4 . 7 8 9 . . 5 9 3 2 6 5 . 0 1 5 . 4 2 0 9 3 2 . ) 1 0 0 ( . l i N ) 1 0 0 ( . l i N l i N l i N l i N ) 6 0 0 ( . 7 0 0 . 1 0 0 . ) 1 1 0 ( . 5 0 0 . 5 0 0 . 0 0 1 . 0 0 1 . e e p u R n a d n i I 0 2 - r a M - 1 3 1 1 - g u A - 3 2 . d t L a r f n I L P D N 8 1 e e p u R n a d n i I 0 2 - r a M - 1 3 1 1 - n a J - 5 0 . d t L y g r e n E n e e r G r e w o P a t a T 9 1 . 1 6 0 1 8 0 2 . 9 6 2 1 . ) 6 7 5 1 ( . 7 3 . 6 2 4 5 5 7 . r a l l o D S U 7 1 - r a M - 1 3 9 0 - g u A - 6 2 7 1 0 2 , h c r a M t s 1 3 o t p u d e t a d i l o s n o c ( $ & 3 1 , 2 1 l ) e a s l r o f d e h r e t f a e r e h t k b T n a a d n A l i g r e n E r e b m u S T P 0 2 * * l i N ) 2 8 0 ( . l i N l i N l i N l i N * * l i N ) 2 8 0 ( . l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N l i N ) 1 0 0 ( . 4 0 0 . ) 1 0 0 ( . 4 0 0 . 3 0 0 . 3 0 0 . ) 6 0 0 ( . ) 6 0 0 ( . 5 0 0 . 5 0 0 . 8 3 . 6 7 1 5 . 8 8 1 . 9 8 4 6 2 ) 4 8 0 ( . 1 2 7 7 . l i N l i N l i N l i N l i N l i N 7 0 0 . ) 4 8 . 2 1 ( 7 0 9 3 . 3 2 . 6 2 ) 6 3 . 2 3 ( 2 5 9 1 . 1 2 5 . 3 7 4 . 4 9 9 . . 3 0 8 3 3 2 . 0 0 8 7 3 . 4 0 0 . . 9 7 4 6 . 2 1 9 7 . 1 9 3 4 1 0 5 . 4 0 3 . 0 6 . 6 7 2 8 1 . 3 5 7 6 1 9 2 . 0 5 3 . 7 4 4 2 2 1 , 1 8 1 2 . . 6 6 2 0 2 1 , . 5 0 3 7 1 9 2 . 0 0 3 2 , . 2 4 3 2 5 5 , . 1 7 3 2 8 7 , . 3 9 8 8 6 1 , . 6 3 1 1 6 ) 8 4 8 ( . 1 0 1 . 0 8 . 8 l i N l i N 1 2 . 0 ) 8 4 8 ( . . 2 0 0 2 1 3 . 0 1 7 9 1 . 1 0 1 . 1 0 9 . 4 5 . 6 0 4 0 1 5 . . 4 4 1 0 4 3 0 7 5 . 9 0 0 . . 4 9 6 5 ) 3 6 3 1 ( . ) 1 5 . 2 ( . ) 4 1 6 1 ( 9 8 . 2 1 9 8 . 2 1 l i N l i N l i N l i N l i N ) 9 7 1 2 ( . . 5 0 7 2 1 . 6 2 5 0 1 ) 1 3 . 2 2 ( 3 5 . 0 5 4 7 . 2 4 1 . . 5 4 2 9 1 . 0 9 9 9 1 ) 5 5 . 2 ( 0 0 0 1 . . 0 5 3 5 3 . 2 9 4 5 3 2 4 0 . 0 0 1 . 0 0 1 . 0 0 1 . 0 0 1 . 0 0 1 . 0 0 1 . 0 0 1 . 0 0 1 . 0 0 1 . 0 0 1 . e e p u R n a d n i I 0 2 - r a M - 1 3 5 1 - c e D - 0 1 . d t L m r a f d n W a p u S i 1 2 e e p u R n a d n i I 0 2 - r a M - 1 3 5 1 - c e D - 7 1 . d t L m r a f d n W e d a v N i i 2 2 e e p u R n a d n i I 0 2 - r a M - 1 3 6 1 - n a J - 9 0 . d t L m r a f d n W i i d a w a o o P l 3 2 e e p u R n a d n i I 7 1 - c e D - 1 3 5 1 - y a M - 8 2 2 1 ) e l a s l r o f d e h r e t f a e r e h t 7 1 0 2 , r e b m e c e D t s 1 3 o t p u d e t a d i l o s n o c ( . d t L s c i m a r e C L C T 4 2 e e p u R n a d n i I 0 2 - r a M - 1 3 6 1 - y a M - 9 1 . d t L h t a J l s e b a w e n e R a m a R o d n I 5 2 e e p u R n a d n i I 0 2 - r a M - 1 3 6 1 - p e S - 4 1 . d t L l y g r e n E e b a w e n e R l n a h w a W 6 2 2 ) d e t a d i l o s n o C ( e e p u R n a d n i I 0 2 - r a M - 1 3 7 1 - b e F - 7 2 . d t L m r a f d n W i i a r a g a V 7 2 e e p u R n a d n i I 0 2 - r a M - 1 3 7 1 - l u J - 1 0 . d t L n o i t u b i r t s i D j r e m A P T 8 2 e e p u R n a d n i I 0 2 - r a M - 1 3 6 1 - n u J - 4 1 . d t L a y r u a S e e y a a h t s a r i h C 9 2 ) 7 3 . 8 1 ( 9 3 . 8 6 . 2 0 0 5 ) 8 3 . 8 1 ( * 6 9 0 . l e b u R n a i s s u R 0 2 - r a M - 1 3 7 1 - g u A - 7 1 3 1 , 2 1 . d t L s e c r u o s e R l a r u t a N n r e t s a E r a F 0 3 The Tata Power Company Limited Integrated Annual Report 2019-20 i s e r u t n e V t n o J / s e i n a p m o C e t a i c o s s A / s e i r a i d i s b u S f o t n e m e t a t s l a i c n a n fi e h t f o s e r u t a e f i t n e i l a s g n n i a t n o c t n e m e t a t S i s e r u t n e V t n o J d n a s e t a i c o s s A : " B " t r a P ) e r o r c ₹ ( n i n o i t a d - i l o s n o C n o i t a d - i l o s n o C x a t r e t f a o t y n a p m o c g n i d l o h e r a h S | t o n s i r e p s a d e t i d u a t s e t a l t e e h S e c n a l a B d e r e d i s n o c t o N d e r e d i s n o C / t fi o r P d e r e d i s n o c n i ) s s o L ( h t r o w t e N e l b a t u b i r t t a y h w n o s a e R e r u t n e V t n i o J / e t a i c o s s A w o h f o s i e r e h t e c n e u fl n i t n a c fi i n g i s % / e t a i c o s s A n i e r u t n e V t n i o J t s 1 3 t a s a s e i n a p m o c e h t n o y n a p m o c t n i o J e r u t n e V e h t y b 0 2 0 2 d l e h y n a p m o c , h c r a M ) . o N ( d n e r a e y n o i t p i r c s e D f o t n e t x E f o t n u o m A f o s e r a h S g n i d l o H t n e m t s e v n I / e t a i c o s s A e t a R y c n e r r u c e g n a h c x E g n i t r o p e R e t a D t e e h S t n i o J t s e t a L d e t i d u a e c n a l a B f o e t a D g n i r i u q c a / e t a i c o s s A e r u t n e V y n a p m o C e r u t n e V t n i o J / e t a i c o s s A e h t f o e m a N N S - - - - - - - - - - - - - - - - - - - - - - - * l i N l i N ) 9 5 . 8 ( p u o r g e h t o t l a i r e t a m t o N 0 1 e t o N % 0 4 l i N l i N . 2 8 7 0 4 ) 1 7 7 1 ( . . ) 0 1 8 6 ( . 9 7 3 5 3 - - 0 1 e t o N % 0 5 l i N l i N l i N l i N . 2 5 9 8 8 . 7 8 0 7 7 . 6 7 1 6 3 . 5 8 5 0 2 1 . 9 1 4 6 2 2 0 3 1 . . 1 4 3 4 . 6 9 9 7 7 l i N l i N ) 3 0 0 ( . ) 1 0 0 ( . ) 5 0 0 ( . 2 0 0 . 8 7 1 6 . . 4 1 1 2 1 . 5 4 4 8 4 . 0 9 9 0 1 2 5 . 8 4 1 . 4 5 7 1 6 ) 1 1 0 ( . ) 2 2 . 0 ( 7 8 3 2 . l i N l i N l i N l i N l i N l i N l i N . 2 6 2 2 l i N 3 7 7 . . 6 7 5 2 . 4 7 9 5 . 1 7 1 9 1 . 4 0 9 3 6 2 5 . 2 2 5 1 ) 2 0 0 ( . ) 7 0 0 ( . 8 1 0 . 7 0 8 . 9 8 5 . . 1 9 6 2 3 6 9 1 . . 3 1 5 8 2 . 8 0 6 2 2 0 0 1 7 . . 9 0 3 7 2 . 0 5 5 5 3 ) 2 3 . 0 7 1 ( . ) 1 8 5 2 4 ( . 2 7 8 9 2 ) 6 0 0 ( . ) 1 2 . 0 ( 0 9 0 . - - - - - - - - - - - - - - - - - p u o r g e h t o t l a i r e t a m t o N 0 1 e t o N % 0 4 0 2 . 0 1 p u o r g e h t o t l a i r e t a m t o N 0 1 e t o N % 3 3 . 3 3 0 3 9 3 . , 0 0 8 7 9 1 0 1 , , 0 0 0 0 0 3 9 3 , p u o r g e h t o t l a i r e t a m t o N 0 1 e t o N % 3 3 . 3 3 7 7 0 . 7 6 6 6 6 7 , e e p u R n a d n i I 0 2 - r a M - 1 3 8 0 - l u J - 8 1 2 1 . d t L y n a p m o C l a o C i n i k a d n a M 1 1 e e p u R n a d n i I 0 2 - r a M - 1 3 2 1 - p e S - 2 1 2 1 . i l d t L g n d o H d n a L e c a o S l 2 1 0 0 1 . 0 0 1 . 0 0 1 . 0 0 1 . 0 0 1 . 0 1 e t o N % 8 3 . 8 2 0 9 1 . 0 0 5 7 , 4 5 5 7 . r a l l o D S U 6 1 - p e S - 0 3 2 1 - g u A - 6 1 ) e l a s l r o f d e h r e t f a e r e h t 6 1 0 2 , r e b m e t p e S h t 0 3 o t p u ( d e t a d i l o s n o c a s a k r e P a m a t a r t i M T P 1 $ & 3 1 , 4 ) d e t a d i l o s n o C ( d e t a d i l o s n o c ( a i s e n o d n I i n m t u r A T P 2 s e r u t n e V t n i o J 0 1 e t o N % 0 3 . 5 1 2 5 6 0 0 0 3 , 4 5 5 7 . r a l l o D S U 4 1 - r a M - 1 3 7 0 - n u J - 6 2 $ & 3 1 ) e l a s l r o f d e h r e t f a e r e h t 4 1 0 2 , h c r a M t s 1 3 o t p u 0 1 e t o N % 0 3 . 1 2 7 5 3 4 , 0 4 5 3 2 1 , 4 5 5 7 . r a l l o D S U 0 2 - r a M - 1 3 7 0 - n u J - 6 2 3 1 l a o C a m i r P m i t l a K T P 0 1 e t o N % 0 3 1 3 . 4 9 7 3 , 0 0 3 4 5 5 7 . r a l l o D S U 0 2 - r a M - 1 3 7 0 - n u J - 6 2 3 1 & 2 1 . d t L ) n a m y a C ( s e c r u o s e R l a o c o d n I 0 1 e t o N % 0 3 0 2 . 0 0 1 e t o N % 0 3 2 3 . 0 0 0 0 0 6 , 0 8 3 2 8 , 5 0 0 0 . a y i a p u R R D I 4 1 - r a M - 1 3 7 0 - n u J - 6 2 t s 1 3 o t p u d e t a d i l o s n o c ( s e c r u o s e R l e s l a K l a o c o d n I T P $ & 3 1 , 2 1 ) e l a s l r o f d e h r e t f a e r e h t 4 1 0 2 , h c r a M 5 0 0 0 . a y i a p u R R D I 0 2 - r a M - 1 3 7 0 - n u J - 6 2 3 1 & 2 1 s e c r u o s e R m i t l a K l a o c o d n I T P 0 1 e t o N % 1 5 . 3 4 4 8 4 0 0 0 0 8 , , 6 8 3 2 , 0 0 1 . e e p u R n a d n i I 0 2 - r a M - 1 3 3 0 - l u J - 7 0 . d t L n o i s s i m s n a r T s k n i l r e w o P 0 1 e t o N % 4 7 . 4 5 7 1 6 0 1 e t o N % 0 5 5 5 3 2 . , 0 0 0 0 4 8 2 9 4 , , 2 0 0 0 5 2 3 4 , e e p u R n a d n i I 0 2 - r a M - 1 3 7 0 - b e F - 3 2 e e p u R n a d n i I 0 2 - r a M - 1 3 1 1 - r p A - 1 2 e e p u R n a d n i I 0 2 - r a M - 1 3 7 0 - v o N - 0 2 . d t L r e w o P o r d y H r a g u D . d t L y g r e n E l a i r t s u d n I 2 1 . d t L s e n M i l a o C d e b u T 0 1 3 4 5 6 7 8 9 0 1 e t o N % 0 3 6 8 . 8 2 3 4 5 5 7 . r a l l o D S U 0 2 - r a M - 1 3 0 1 - t c O - 8 2 0 1 e t o N % 0 3 . 7 4 1 2 5 1 , 0 0 0 8 1 , 4 5 5 7 . r a l l o D S U 0 2 - r a M - 1 3 0 1 - t c O - 8 2 0 1 e t o N % 0 3 * 9 5 4 7 0 1 , 4 5 5 7 . r a l l o D S U 0 2 - r a M - 1 3 0 1 - t c O - 8 2 0 1 e t o N % 0 3 . 9 8 4 8 2 9 6 7 0 1 , 4 5 5 7 . r a l l o D S U 0 2 - r a M - 1 3 0 1 - t c O - 8 2 3 1 . d t L . e t P s t n e m t s e v n I e c i d n a C 3 1 3 1 a m a t a r P g n a b m a T a s u N T P 4 1 3 1 & 2 1 a i s e n o d n I l a t i p a C l e v r a M T P 5 1 3 1 & 2 1 i d a b A a m i r P a y r a k w D T P i 6 1 0 1 e t o N % 0 3 . 1 9 4 0 2 0 0 5 7 , 4 5 5 7 . r a l l o D S U 0 2 - r a M - 1 3 1 1 - n a J - 1 0 3 1 & 5 ) d e t a d i l o s n o C ( r e w o P a m i r P n a t n a m i l a K T P 7 1 0 1 e t o N % 6 2 . 4 7 6 4 3 1 , , 0 0 0 0 9 2 0 8 6 , 4 5 5 7 . r a l l o D S U 0 2 - r a M - 1 3 2 1 - v o N - 9 0 3 1 & 6 ) d e t a d i l o s n o C ( k b T a n a r a s s e k u S i t l u m a r a B T P 8 1 0 1 e t o N % 0 4 . 8 8 5 6 2 9 5 4 6 1 , . 8 7 2 8 o r u E 0 2 - r a M - 1 3 3 1 - y a M - 9 0 3 1 & 7 ) d e t a d i l o s n o C ( V B s d n a l r e h t e N i l a q s t s i r a j d A 9 1 0 1 e t o N % 0 3 0 9 0 . * * 0 0 3 0 0 5 4 5 5 7 . r a l l o D S U 0 2 - r a M - 1 3 4 1 - l u J - 2 0 3 1 & 2 1 d t L ) n a m y a C ( s e c r u o s e R C P K l a o c o d n I 0 2 . 8 7 2 8 o r u E 0 2 - r a M - 1 3 4 1 - y a M - 9 0 3 1 & 2 1 , 8 ) d e t a d i l o s n o C ( V B s d n a l r e h t e N i t e h k m o r o K 1 2 0 0 5 2 5 4 , 4 5 5 7 . r a l l o D S U 0 2 - r a M - 1 3 5 1 - r p A - 9 2 l d e h r e t f a e r e h t 0 2 0 2 , h c r a M t s 1 3 o t p u d e t a d i l o s n o C ( . d t L n o i t a r o p r o C r e w o P i h z e T i h z e t I 2 2 $ & 3 1 ) e l a s r o f 0 1 e t o N % 6 2 . 0 0 3 5 3 6 3 7 4 1 , 4 5 5 7 . r a l l o D S U 0 2 - r a M - 1 3 6 1 - y a M - 9 1 2 1 . d t L . e t P s e r u t n e V r e w o P t n e g r u s e R 3 2 * * * p u o r g e h t o t l a i r e t a m t o N 0 1 e t o N % 3 3 . 3 3 7 0 0 . 0 6 6 6 6 , 0 0 1 . e e p u R n a d n i I 7 1 - r a M - 1 3 5 1 - g u A - 7 1 $ & 2 1 . d t L e t a v i r P m o c l i M H T L 4 2 467 Statutory ReportsFinancial StatementsFuture ready for smart choicesOverviewOur Emphasis on ValueOur Value-creation Paradigm ) e r o r c ₹ ( n i n o i t a d - i l o s n o C n o i t a d - i l o s n o C x a t r e t f a o t y n a p m o c g n i d l o h e r a h S | t o n s i r e p s a d e t i d u a t s e t a l t e e h S e c n a l a B d e r e d i s n o c t o N d e r e d i s n o C / t fi o r P d e r e d i s n o c n i ) s s o L ( h t r o w t e N e l b a t u b i r t t a y h w n o s a e R e r u t n e V t n i o J / e t a i c o s s A w o h f o s i e r e h t e c n e u fl n i t n a c fi i n g i s % / e t a i c o s s A n i e r u t n e V t n i o J t s 1 3 t a s a s e i n a p m o c e h t n o y n a p m o c t n i o J e r u t n e V e h t y b 0 2 0 2 d l e h y n a p m o c , h c r a M ) . o N ( d n e r a e y n o i t p i r c s e D f o t n e t x E f o t n u o m A f o s e r a h S g n i d l o H t n e m t s e v n I / e t a i c o s s A e t a R y c n e r r u c e g n a h c x E g n i t r o p e R e t a D t e e h S t n i o J t s e t a L d e t i d u a e c n a l a B f o e t a D g n i r i u q c a / e t a i c o s s A e r u t n e V y n a p m o C e r u t n e V t n i o J / e t a i c o s s A e h t f o e m a N N S - - - - - 4 8 1 5 . 0 5 . 8 0 1 . 1 1 5 2 6 ) 3 0 1 ( . ) 8 7 3 ( . 3 2 . 2 ) 7 0 1 1 ( . ) 8 5 . 2 4 ( 0 5 . 0 8 3 1 3 . 5 4 9 . 0 3 . 3 - - - - 1 1 e t o N % 8 7 7 4 . 0 2 . 2 4 6 0 0 5 7 6 9 , 0 0 1 . e e p u R n a d n i I 0 2 - r a M - 1 3 0 0 - v o N - 7 2 . d t L s t c e j o r P a t a T s e t a i c o s s A 1 1 e t o N % 7 2 7 2 . 8 2 . 4 0 0 2 9 1 , 0 0 1 . e e p u R n a d n i I 0 2 - r a M - 1 3 0 0 - v o N - 7 2 2 1 . i d t L s r e e n g n E n u m h s a Y 1 1 e t o N % 0 0 6 2 . . 7 4 0 8 , 0 2 3 4 7 0 1 , 0 0 1 . u N n a t u h B 0 2 - r a M - 1 3 9 0 - n a J - 9 1 . d t L n o i t a r o p r o c r e w o P o r d y H u h h c a g a D 1 1 e t o N % 4 1 3 3 . 0 3 . 3 5 2 8 1 , 0 0 1 . e e p u R n a d n i I 0 2 - r a M - 1 3 0 0 - v o N - 7 2 2 1 . d t L . o C g n d i l i u B d e t a i c o s s A e h T l i N l i N ) 1 0 0 ( . p u o r g e h t o t l a i r e t a m t o N 1 1 e t o N % 1 2 3 3 . 1 0 0 . 0 5 3 3 , 0 0 1 . e e p u R n a d n i I 0 2 - r a M - 1 3 5 0 - b e F - 2 2 2 1 . d t L i . t v P g n d a r T t a h i r B 1 2 3 4 5 , d r a o B e h t f o f l a h e b n o d n a r o F A L A W A R G A I L A M N A B 9 2 0 0 2 1 0 0 : I N D r o t c e r i D y r a t e r c e S y n a p m o C Y R T S I M . M . H r o t c e r i D g n i g a n a M & O E C A H N I S R E E V A R P 4 6 1 5 8 7 1 0 : I N D M A Y N A M A R B U S H S E M A R r e c ffi O l a i c n a n i F f e i h C . 0 2 0 2 , y a M h t 9 1 , i a b m u M . d t L . y t P i g r e n n e C h t i w d e t a d i l o s n o c n e e b e v a h . d t L ) y t P ( i m r a F d n W y t i n u m m o C a m m a k i s t i s T d n a . d t L ) y t P ( 1 t c e o r P E R j i n e y o m E a l a h k a m A f o s t n u o c c A . r e w o P a m i r P n a t n a m i l a K T P h t i w d e t a d i l o s n o c n e e b e v a h a n a d r e P a m u s u K a r t i C T P d n a g n u g A h u r u G T P , a n a u B a m i r P a r t i C T P f o s t n u o c c A . a s a k r e P a m a t a r t i M T P h t i w d e t a d i l o s n o c n e e b e v a h a h a s U a m a t a r t i M T P f o s t n u o c c A d t L . t v P s e r u t n e V r e w o P t n e c s a n e R h t i w d e t a d i l o s n o c n e e b e v a h . d t L . e t P s e r u t n e V r e w o P t n e g r u s e R f o s t n u o c c A . k b T a n a r a s s e k u S i t l u m a r a B T P h t i w d e t a d i l o s n o c n e e b e v a h s u t a r e M g n u n u G g n a t n A T P f o s t n u o c c A . V B s d n a l r e h t e N i l a q s t s i r a j d A h t i w d e t a d i l o s n o c n e e b e v a h C L L a g r o e G i i l a q s t s i r a j d A f o s t n u o c c A . V B s d n a l r e h t e N i t e h k m o r o K h t i w d e t a d i l o s n o c n e e b e v a h C L L a g r o e G i i t e h k m o r o K f o s t n u o c c A . l d t L y g r e n E e b a w e n e R n a h w a W h t i l w d e t a d i l o s n o c n e e b e v a h . l d t L y g r e n E e b a w e n e R n a h w a W l f o s e i i r a d i s b u s l l a f o s t n u o c c A . d t L o c l e N h t i w d e t a d i l o s n o c n e e b e v a h . d t L s e c i v r e S t e n a t a T f o s t n u o c c A . s e i t i v i t c a c i m o n o c e e h t r e v o l o r t n o c t n o i j i l d n a g n d o h e r a h s o t e u d e c n e u fl n . i l g n d o h e r a h s o t e u d e c n e u fl n i i t n a c fi n g i s i s i e r e h T t n a c fi n g i s i s i e r e h T . 0 2 - 9 1 0 2 Y F r o f s t n u o c c A t n e m e g a n a M n o d e s a B . S A d n I o t d e t r e v n o c , P A A G e v i t c e p s e r e h t r e d n u d e r a p e r p s t n u o c c a r i e h t r e p s a e r a s e r u t n e v t n o i j d n a s e i i r a d i s b u s n g e r o f i f o s e r u g F i . ) e s n e p x e ( / e m o c n i l y r o t a u g e r e t a r s e d u l c n i r e v o n r u T . e l l a S r o f d e h s e t o n e D 1 2 3 4 5 6 7 8 9 0 1 1 1 2 1 3 1 4 1 $ : s e t o N . " * " y b d e t o n e d e r a 0 0 0 0 5 ₹ w o e b s e r u g F l i , i s e r u t n e V t n o J / s e i n a p m o C e t a i c o s s A / s e i r a i d i s b u S f o t n e m e t a t s l a i c n a n fi e h t f o s e r u t a e f i t n e i l a s g n n i a t n o c t n e m e t a t S ) . d t n o C ( s e r u t n e V t n o J d n a s e t a i c o s s A i : " B " t r a P 468 The Tata Power Company Limited Integrated Annual Report 2019-20 Notice NOTICE IS HEREBY GIVEN THAT THE ONE HUNDRED AND FIRST ANNUAL GENERAL MEETING OF THE TATA POWER COMPANY LIMITED will be held on Thursday, the 30th day of July 2020 at 3 p.m. (IST) through Video Conferencing (“VC”)/Other Audio Visual Means (“OAVM”), to transact the following business:- Ordinary Business: 1. To receive, consider and adopt the Audited Financial Statements of the Company for the financial year ended 31st March 2020, together with the Reports of the Board of Directors and the Auditors thereon. 2. 3. 4. To receive, consider and adopt the Audited Consolidated Financial Statements of the Company for the financial year ended 31st March 2020, together with the Report of the Auditors thereon. To declare a dividend on Equity Shares for the financial year ended 31st March 2020. To appoint a Director in place of Mr. Hemant Bhargava (DIN:01922717), who retires by rotation and, being eligible, offers himself for re-appointment. Special Business: 5. Issuance of Equity Shares to Tata Sons Private Limited, Promoter of the Company, on a Preferential Basis To consider and, if thought fit, to pass the following resolution as a Special Resolution:- “RESOLVED that pursuant to the provisions of Sections 23(1)(b), 42, 62(1)(c) and other applicable provisions, if any, of the Companies Act, 2013 (the “Act”), the Companies (Prospectus and Allotment of Securities) Rules, 2014, the Companies (Share Capital and Debentures) Rules, 2014 and other applicable rules made thereunder (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) and in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (the “SEBI ICDR Regulations”) and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “SEBI Listing Regulations”), as amended from time to time, the listing agreements entered into by the Company with BSE Limited and National Stock Exchange of India Limited (together, the “Stock Exchanges”) on which the equity shares of the Company having face value of ₹ 1 each (“Equity Shares”) are listed, and subject to any other rules, regulations, guidelines, notifications, circulars and clarifications issued thereunder from time to time by the Ministry of Corporate Affairs, the Securities and Exchange Board of India (“SEBI”) and/or any other competent authorities (hereinafter referred to as “Applicable Regulatory Authorities”) from time to time to the extent applicable and the enabling provisions of the Memorandum of Association and Articles of Association of the Company, and subject to such approvals, consents and permissions as may be necessary or required and subject to such conditions as may be imposed or prescribed while granting such approvals, consents and permissions, which the Board of Directors of the Company (hereinafter referred to as the “Board”, which term shall be deemed to mean and include one or more committee(s) constituted by the Board to exercise its powers including the powers conferred by this Resolution), is hereby authorised to accept, the consent and approval of the Members of the Company (“Members”) be and is hereby accorded to the Board to create, issue, offer and allot upto 49,05,66,037 Equity Shares at a price of ₹ 53/- per Equity Share, aggregating to ₹ 2,600 crore (Rupees Two thousand six hundred crore only), to Tata Sons Private Limited (“Tata Sons”), the Promoter of the Company, for cash consideration on a preferential basis (“Preferential Issue”), and on such terms and conditions as may be determined by the Board in accordance with the SEBI ICDR Regulations and other applicable laws. RESOLVED FURTHER that in terms of the provisions of Chapter V of the SEBI ICDR Regulations, the relevant date for determining the floor price for the Preferential Issue of the Equity Shares is 30th June 2020, being the date 30 days prior to the date of this Annual General Meeting (“Relevant Date”). RESOLVED FURTHER that without prejudice to the generality of the above Resolution, the issue of the Equity Shares to Tata Sons under the Preferential Issue shall be subject to the following terms and conditions apart from others as prescribed under applicable laws: a) b) c) The Equity Shares to be issued and allotted shall be fully paid up and rank pari passu with the existing Equity Shares of the Company in all respects (including with respect to dividend and voting powers) from the date of allotment thereof, be subject to the requirements of all applicable laws and shall be subject to the provisions of the Memorandum of Association and Articles of Association of the Company. The Equity Shares to be allotted shall be locked- in for such period as specified in the provisions of Chapter V of the SEBI ICDR Regulations and will be listed on the Stock Exchanges subject to receipt of necessary regulatory permissions and approvals. The Equity Shares shall be allotted in dematerialised form within a period of fifteen (15) days from the date of passing of the special resolution by the Members, provided that where the allotment of 469 Future ready for smart choicesNotice Equity Shares is subject to receipt of any approval or permission from Applicable Regulatory Authorities, the allotment shall be completed within a period of fifteen (15) days from the date of receipt of last of such approvals or permissions. RESOLVED FURTHER that the Board be and is hereby authorized to accept any modification(s) in the terms of issue of Equity Shares, subject to the provisions of the Act and the SEBI ICDR Regulations, without being required to seek any further consent or approval of the Members. limitation, arrangements, including without RESOLVED FURTHER that for the purpose of giving effect to this Resolution, the Board be and is hereby authorised to do all such acts, deeds, matters and things as it may, in its absolute discretion, deem necessary, desirable or expedient, issuing clarifications, resolving all questions of doubt, effecting any modifications or changes to the foregoing (including modification to the terms of the issue), entering into contracts, agreements, documents (including for appointment of agencies, intermediaries and advisors for the Preferential Issue) and to authorize all such persons as may be necessary, in connection therewith and incidental thereto as the Board in its absolute discretion shall deem fit without being required to seek any fresh approval of the Members and to settle all questions, difficulties or doubts that may arise in regard to the offer, issue and allotment of the Equity Shares and listing thereof with the Stock Exchanges as appropriate and utilisation of proceeds of the Preferential Issue, take all other steps which may be incidental, consequential, relevant or ancillary in this connection and to effect any modification to the foregoing and the decision of the Board shall be final and conclusive. RESOLVED FURTHER that the Board be and is hereby authorized to delegate all or any of the powers herein conferred, as it may deem fit in its absolute direction, to any committee of the Board or any one or more Director(s)/ Company Secretary/any Officer(s) of the Company to give effect to the aforesaid resolution.” 6. Appointment of Branch Auditors To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:- “RESOLVED that pursuant to the provisions of Section 143(8) and other applicable provisions, if any, of the Companies Act, 2013 (the “Act’’) (including any statutory modification or re-enactment thereof for the time being in force) and the Companies (Audit and Auditors) Rules, 2014, as amended from time to time, the Board of Directors (which term shall be deemed to include any Committee of the Board constituted to exercise its powers, including 470 the powers conferred by this Resolution) be and is hereby authorised to appoint as Branch Auditor(s) of any Branch Office of the Company, whether existing or which may be opened/acquired hereafter, outside India, in consultation with the Company’s Auditors, any persons, qualified to act as Branch Auditors within the provisions of Section 143(8) of the Act and to fix their remuneration. RESOLVED FURTHER that the Board of Directors of the Company be and is hereby authorised to do all acts, matters, deeds and things and take all such steps as may be necessary, proper or expedient to give effect to this Resolution”. 7. Ratification of Cost Auditor’s Remuneration To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:- “RESOLVED that pursuant to the provisions of Section 148(3) and other applicable provisions, if any, of the Companies Act, 2013 (including any statutory modification or re-enactment thereof for the time being in force) and the Companies (Audit and Auditors) Rules, 2014, as amended from time to time, the Company hereby ratifies the remuneration of ₹ 6,50,000 (Rupees Six lakh fifty thousand) plus applicable taxes, travel and actual out-of-pocket expenses incurred in connection with the audit, payable to M/s. Sanjay Gupta and Associates, (Firm Registration No. 000212), who are appointed as Cost Auditors to conduct the audit of cost records maintained by the Company for the financial year 2020-21. RESOLVED FURTHER that the Board of Directors of the Company be and is hereby authorised to do all acts, matters, deeds and things and take all such steps as may be necessary, proper or expedient to give effect to this Resolution.” NOTES: 1. In view of the global outbreak of COVID-19, the Ministry of Corporate Affairs (MCA), Government of India, has vide its General Circular No. 14/ 2020 dated 8th April 2020, General Circular No. 17/ 2020 dated 13th April 2020, in relation to “Clarification on passing of ordinary and special resolutions by companies under the Companies Act, 2013 and the rules made thereunder on account of the threat posed by Covid-19” and General Circular No. 20/ 2020 dated 5th May 2020, in relation to “Clarification on holding of annual general meeting (AGM) through video conferencing (VC) or other audio visual means (OAVM)” (collectively referred to as “MCA Circulars”) and Securities and Exchange Board of India vide Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated 12th May 2020, in relation to “Additional relaxation in relation to compliance with certain provisions of SEBI (Listing Obligations and Disclosure Requirements) NoticeThe Tata Power Company Limited Integrated Annual Report 2019-20 Regulations 2015 - Covid-19 pandemic” (“SEBI Circular”) have permitted the holding of the Annual General Meeting (“AGM”) through Video Conferencing (“VC”)/Other Audio Visual Means (“OAVM”), without the physical presence of the Members at a common venue. In compliance with the applicable provisions of the Companies Act, 2013 (the “Act”) (including any statutory modification or re-enactment thereof for the time being in force) read with Rule 20 of the Companies (Management and Administration) Rules, 2014 (the “Rules”), as amended from time to time, read with the MCA Circulars, SEBI Circular and pursuant to Regulation 44 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) the Annual General Meeting (“AGM”) of the Company is scheduled to be held on Thursday, 30th July 2020, at 3 p.m. (IST) through VC/OAVM and the voting for items to be transacted in the Notice to this AGM only through remote electronic voting process (“e-Voting”). As per the provisions of Clause 3.A.II. of the General Circular No. 20/ 2020 dated 5th May 2020, the matters of Special Business as appearing at Item Nos. 5 to 7 of the accompanying Notice, are considered to be unavoidable by the Board and hence, form part of this Notice. The relative Explanatory Statement pursuant to Section 102 of the Act, in regard to the business as set out in Item Nos. 5 to 7 above and the relevant details of the Director seeking re-appointment as set out in Item No.4 above as required under Regulation 26(4) and 36(3) of the Listing Regulations and under Secretarial Standard - 2 on General Meetings issued by The Institute of Company Secretaries of India, is annexed hereto as Annexure - A . PURSUANT TO THE PROVISIONS OF THE ACT, A MEMBER ENTITLED TO ATTEND AND VOTE AT THE AGM IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE ON HIS/HER BEHALF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. SINCE THIS AGM IS BEING HELD PURSUANT TO THE MCA CIRCULARS THROUGH VC/OAVM, THE REQUIREMENT OF PHYSICAL ATTENDANCE OF MEMBERS HAS BEEN DISPENSED WITH. ACCORDINGLY, IN TERMS OF THE MCA CIRCULARS AND THE SEBI CIRCULAR, THE FACILITY FOR APPOINTMENT OF PROXIES BY THE MEMBERS WILL NOT BE AVAILABLE FOR THIS AGM AND HENCE, THE PROXY FORM, ATTENDANCE SLIP AND ROUTE MAP OF AGM ARE NOT ANNEXED TO THIS NOTICE. 2. 3. 4. 5. Investors, who are Members of Institutional the Company, are encouraged to attend and vote at the AGM through VC/OAVM facility. Corporate Members intending to appoint their authorized representatives to attend the AGM through VC or OAVM and to vote thereat through remote e-Voting are requested to send a certified copy of the Board Resolution to the Scrutinizer with by and a investorcomplaints@tatapower.com. cs@parikhassociates.com evoting@nsdl.co.in copy marked e-mail to at 6. 7. 8. 9. In case of joint holders attending the AGM, only such joint holder who is higher in the order of names will be entitled to vote. The attendance of the Members attending the AGM through VC/OAVM will be counted for the purpose of reckoning the quorum under Section 103 of the Act. The Members can join the AGM in the VC/OAVM mode 30 minutes before and 15 minutes after the scheduled time of the commencement of the AGM by following the procedure mentioned in the Notice. The Members will be able to view the proceedings on National Securities Depository Limited’s (“NSDL”) e-Voting website at www.evoting.nsdl.com. The facility of participation at the AGM through VC/OAVM will be made available to atleast 1,000 Members on a first come first served basis as per the MCA Circulars. Further, due to non-availability of postal and courier services, on account of the threat posed by COVID-19 and in terms of the MCA Circulars and the SEBI Circular, the Company is sending this AGM Notice along with the Annual Report for FY20 in electronic form only to those Members whose e-mail addresses are registered with the Company/Depositories. The Notice convening the AGM and the Annual Report for FY20 has been uploaded on the website of the Company at www.tatapower.com and may also be accessed from the relevant section of the websites of the Stock Exchanges i.e. BSE Limited (“BSE”) and National Stock Exchange of India Limited (“NSE”) at www.bseindia.com and www.nseindia. com, respectively. The AGM Notice is also available on the website of NSDL at www.evoting.nsdl.com. 10. The Register of Members and Share Transfer Books of the Company will remain closed from Thursday, 16th July 2020 to Thursday, 30th July 2020, both days inclusive. If the dividend, as recommended by the Board of Directors, is approved at the AGM, payment of such dividend, subject to deduction of tax at source (“TDS”), will be made on or after Monday, 3rd August 2020, as under: i) To all Beneficial Owners in respect of shares held in electronic form as per the data as may be made available by NSDL and Central Depository Services (India) Limited (“CDSL”) (both collectively referred to as “Depositories”) as of the close of business hours on Wednesday, 15th July 2020; 471 Future ready for smart choicesNotice ii) To all Members in respect of shares held in physical form after giving effect to valid transmission and transposition requests lodged with the Company on or before the close of business hours on Wednesday, 15th July 2020. Pursuant to the Finance Act, 2020, dividend income will be taxable in the hands of the Shareholders w.e.f. 1st April 2020 and the Company is required to deduct TDS from dividend paid to the Members at rates prescribed in the Income-tax Act, 1961 (the “IT Act”). In general, to enable compliance with TDS requirements, Members were requested, vide the Company’s e-mail communication dated 11th June 2020, to complete and/or update their Residential Status, Permanent Account Number (“PAN”), Category as per the IT Act with their Depository Participants (“DPs”) or in case shares are held in physical form, with the Company by sending documents through e-mail by 25th June 2020. Further, in order to receive the dividend in a timely manner, Members holding shares in physical form, who have not updated their mandate for receiving the dividends directly in their bank accounts through Electronic Clearing Service (“ECS”) or any other means, are requested to send hard copies of the following details/documents to the Company’s Registrar and Share Transfer Agent (“RTA”), viz. TSR Darashaw Consultants Private Limited (“TSR”), (formerly known as TSR Darashaw Limited) at 6-10, Haji Moosa Patrawala Industrial Estate (Near Famous Studio), 20, Dr. E. Moses Road, Mahalaxmi, Mumbai 400 011, latest by 15th July 2020: a) a signed request letter mentioning your Name, Folio Number, complete address and following details relating to Bank Account in which the dividend is to be received: 13. Members holding shares in electronic form may please note that their bank details as furnished by the respective Depositories to the Company will be considered for remittance of dividend as per the applicable regulations of the Depositories and the Company will not entertain any direct request from such Members for change/ deletion in such bank details. Further, instructions, if any, already given by them in respect of shares held in physical form, will not be automatically applicable to the dividend paid on shares held in electronic form. Members may, therefore, give instructions to their DP regarding bank accounts in which they wish to receive dividend. 14. For Members who are unable to receive the dividend directly in their bank accounts through ECS or any other means, due to non-registration of the Electronic Bank Mandate, the Company shall dispatch the dividend warrant/Bankers’ cheque/demand draft to such Members upon normalisation of the postal services. 15. As per Regulation 40 of the Listing Regulations, as amended, securities of listed companies can be transferred only in dematerialised form with effect from 1st April 2019, except in case of request received for transmission or transposition of securities. In view of this and to eliminate all risks associated with physical shares and for ease of portfolio management, Members holding shares in physical form are requested to consider converting their holdings to dematerialised form. to 16. Members are requested to intimate changes, if any, pertaining their name, postal address, e-mail address, telephone/mobile numbers, PAN, registering of nomination and power of attorney, Bank Mandate details such as name of the bank and branch details, bank account number, MICR code, IFSC code, etc., to their DP in case the shares are held in electronic form and to the RTA in case the shares are held in physical form. i) ii) Name Bank Account type; and Branch of Bank and 17. Bank Account Number and type allotted by your bank after implementation of Core Banking Solutions; and iii) 11 digit IFSC Code. To prevent fraudulent transactions, Members are advised to exercise due diligence and notify the Company of any change in address or demise of any Member as soon as possible. Members are also advised to not leave their demat account(s) dormant for long. Periodic statement of holdings should be obtained from the concerned DP and holdings should be verified from time to time. b) c) d) Self-attested copy of cancelled cheque bearing the name of the Member or first holder, in case shares are held jointly; Self-attested copy of the PAN Card; and Self-attested copy of any document (such as Aadhaar Card, Driving License, Election Identity Card, Passport) in support of the address of the Member as registered with the Company. 18. As per the provisions of Section 72 of the Act, the facility for making nomination is available for the Members in respect of the shares held by them. Members, who have not yet registered their nomination, are requested to register the same by submitting Form No. SH-13. The said form can be downloaded from the Company’s website www.tatapower.com (under 'Investor Relations' section). Members are requested to submit the said form to their DP in case the shares are held in electronic form and to the RTA in case the shares are held in physical form. 11. 12. 472 NoticeThe Tata Power Company Limited Integrated Annual Report 2019-20 19. 25. form The format of the Register of Members prescribed by the MCA under the Act, requires the Company/RTA to record additional details of Members, including their PAN details, e-mail address, bank details for payment of dividend etc. A for capturing additional details is available on the Company’s website www.tatapower.com (under 'Investor Relations' section). Members holding shares in physical form are requested to submit the filled in form to the Company or RTA in physical mode, after restoration of normalcy or in electronic mode to csg-unit@tsrdarashaw.com, as per instructions mentioned in the form. Members holding shares in electronic form are requested to submit the details to their respective DP only and not to the Company or RTA. 20. Members holding shares in physical form, in identical order of names, in more than one folio, are requested to send to the Company or RTA, the details of such folios together with the share certificates for consolidating their holdings in one folio. A consolidated share certificate will be issued to such Members after making requisite changes. 21. Members are requested to note that dividends, if not encashed for a consecutive period of 7 years from the date of transfer to Unpaid Dividend Account of the Company, are liable to be transferred to the Investor Education and Protection Fund (“IEPF”). Further, the shares in respect of such unclaimed dividends are also liable to be transferred to the demat account of the IEPF Authority. In view of this, Members/Claimants are requested to claim their dividends from the Company within the stipulated timeline. Members, whose unclaimed dividends/shares have been transferred to IEPF, may claim the same by making an application to the IEPF Authority in e-Form/ web form No. IEPF-5 available on www.iepf.gov.in. Members/Claimants can file only one consolidated claim in a financial year as per the IEPF Rules. For details, please refer to Report on Corporate Governance, which is a part of this Annual Report. 22. Members desiring inspection of statutory registers during the AGM may send their request in writing to the Company at investorcomplaints@tatapower.com. 23. Members who wish to inspect the relevant documents referred to in the Notice can send an e-mail to investorcomplaints@tatapower.com up to the date of the AGM. 24. This AGM Notice is being sent by e-mail only to those eligible Members who have already registered their e-mail address with the Depositories/the DP/the Company’s RTA/the Company or who will register their e-mail address with TSR, on or before 5:00 p.m. (IST) on Wednesday, 22nd July 2020. To facilitate Members to receive this Notice electronically and cast their vote electronically, the Company has made special arrangement with TSR for registration of e-mail addresses in terms of the MCA Circulars. Eligible Members who have not submitted their e-mail address to TSR, are required to provide their e-mail address to the RTA, on or before 5:00 p.m. (IST) on Wednesday, 22nd July 2020 pursuant to which, any Member may receive on the e-mail address provided by the Member the Annual Report for FY20 and the procedure for remote e-Voting along with the login ID and password for remote e-Voting. The process for registration of e-mail address is as under: I. For Members who hold shares in Electronic form: Visit the link https://green.tsrdarashaw.com/ a) green/events/login/po b) Enter the DP ID & Client ID, PAN details and captcha code. c) System will verify the Client ID and PAN details. d) e) f) successful verification, system will On allow you to enter your e-mail address and mobile number. Enter your e-mail address and mobile number. The system will then confirm the e-mail address for the limited purpose of service of the Annual Report for FY20. II. For Members who hold shares in Physical form: Visit the link https://green.tsrdarashaw.com/ a) green/events/login/po b) c) d) e) Enter the physical Folio Number, PAN details and captcha code. In the event the PAN details are not available on record, Member to enter one of the share certificate’s number. System will verify the Folio Number and PAN details or the share certificate number. successful verification, On system will allow you to enter your e-mail address and mobile number. f) Enter your e-mail address and mobile number. g) If PAN details are not available, the system will prompt the Member to upload a self-attested copy of the PAN card. 473 Future ready for smart choicesNotice h) The system will then confirm the e-mail address for the limited purpose of service of the Annual Report for FY20. 26. After successful submission of the e-mail address, NSDL will e-mail a copy of the Annual Report for FY20 along with the remote e-Voting user ID and password, within 48 hours of successful registration of the e-mail address by the Member. In case of any queries, Members may write to csg-unit@tsrdarashaw.com or evoting@nsdl.co.in. IV. Members of the Company holding shares either in physical form or electronic form as on the cut-off date of Thursday, 23rd July 2020, may cast their vote by remote e-Voting. The remote e-Voting period commences on Monday, 27th July 2020 at 9:00 a.m. (IST) and ends on Wednesday, 29th July 2020 at 5:00 p.m. (IST). The remote e-Voting module shall be disabled by NSDL for voting thereafter. Once the vote on a resolution is cast by the Member, the Member shall not be allowed to change it subsequently. For permanent registration of their e-mail address, Members are requested to register their e-mail address, in respect of electronic holdings, with their concerned DP and in respect of physical holdings, with the RTA. V. Those Members who have already registered their e-mail addresses are requested to keep their e-mail addresses validated with their DP/TSR to enable servicing of notices/ documents/Annual Reports and other communications electronically to their e-mail address in future. Process and manner e-Voting is, as under:- I. for Members opting for In compliance with the provisions of Sections 108 and other applicable provisions of the Act, read with Rule 20 of the Rules and Regulation 44 of the Listing Regulations, the Company is offering only e-Voting facility to all the Members of the Company and the business will be transacted only through the electronic voting system. The Company has engaged the services of NSDL for facilitating e-Voting to enable the Members to cast their votes electronically as well as for e-Voting during the AGM. Resolution(s) passed by Members through e-Voting is/are deemed to have been passed as if it/ they have been passed at the AGM. II. Members are provided with the facility for voting through Voting system during the VC/OAVM proceedings at the AGM and Members participating at the AGM, who have not already cast their vote by remote e-Voting, are eligible to exercise their right to vote at the AGM. III. Members who have already cast their vote by remote e-Voting prior to the AGM will also be eligible to participate at the AGM but shall not be entitled to cast their vote again on such resolution(s) for which the Member has already cast the vote through remote e-Voting. The instructions for Members attending the AGM through VC/OAVM are as under: A. through The Members will be provided with facility to attend the AGM through a VC/OAVM the NSDL e-Voting system and they may access the same at https://www.evoting.nsdl.com under the Shareholders/Members login by using the remote e-Voting credentials, where the EVEN of the Company will be displayed. On clicking this link, the Members will be able to attend and participate in the proceedings of the AGM through a live webcast of the meeting and submit votes on announcement by the Chairman. Please note that the Members who do not have the User ID and Password for e-Voting or have forgotten the User ID and Password may retrieve the same by following the remote e-Voting instructions mentioned in the Notice to avoid last minute rush. Further, Members may also use the OTP based login for logging into the e-Voting system of NSDL. B. Members may join the AGM through laptops, smartphones, tablets and iPads for better experience. Further, Members will be required to use Internet with a good speed to avoid any disturbance during the Meeting. Members will need the latest version of Chrome, Safari, Internet Explorer 11, MS Edge or Firefox. Please note that participants connecting from mobile devices or tablets or through laptops connecting via mobile hotspot may experience Audio/Video loss due to fluctuation in their respective network. It is, therefore, recommended to use stable Wi-Fi or LAN connection to mitigate any glitches. C. Members are encouraged to submit their questions in advance with regard to the 27. 28. 29. 474 NoticeThe Tata Power Company Limited Integrated Annual Report 2019-20 financial statements or any other matter to be placed at the AGM, from their registered e-mail address, mentioning their name, DP ID and Client ID number/folio number and mobile number, to reach the Company’s e-mail address at investorcomplaints@tatapower.com before 3.00 p.m. (IST) on Monday, 27th July 2020. Queries that remain unanswered at the AGM will be appropriately responded by the Company at the earliest post the conclusion of the AGM. D. Members who would like to express their views/ask questions as a Speaker at the AGM may pre-register themselves by sending a request from their registered e-mail address mentioning their names, DP ID and Client ID/ folio number, PAN and mobile number to investorcomplaints@tatapower.com between Friday, 24th July 2020 (9:00 a.m. IST) and Monday, 27th July 2020 (5:00 p.m. IST). Only those Members who have pre-registered themselves as speakers will be allowed to express their views/ask questions during the AGM. The Company reserves the right to restrict the number of speakers depending on the availability of time for the AGM. E. Members who need assistance before or during the AGM, can contact NSDL on evoting@nsdl.co.in or call on toll free no.:1800-222-990 or contact Mr. Amit Vishal, Senior Manager - NSDL at amitv@nsdl.co.in or call on +91 22 24994360/+91 9920264780. VI. The instructions e-Voting are as under: for Members for The way to vote electronically on NSDL e-Voting system consists of ‘Two Steps’ which are mentioned below: Step 1: Log-in to NSDL e-Voting system at https://www.evoting.nsdl.com/ How to Log-in to NSDL e-Voting website? A. B. Visit the e-Voting website of NSDL. Open web browser by following: https://www.evoting.nsdl.com/ either on a Personal Computer or on a mobile. typing the Once the home page of e-Voting system is launched, click on the icon 'Login' which is available under ‘Shareholders’ section. C. A new screen will open. You will have to enter your User ID, your Password and a Verification Code as shown on the screen. i.e. IDEAS, you can Alternatively, if you are registered for NSDL e-services log-in at https://eservices.nsdl.com/ with your existing IDEAS login. Once you log-in to NSDL e-services after using your log-in credentials, click on e-Voting and you can proceed to Step 2 i.e. Cast your vote electronically. D. Your User ID details are given below: Manner of Your User ID is: holding shares i.e. Demat (NSDL or CDSL) or Physical i) For Members who 8 Character DP hold shares in demat ID followed by 8 account with NSDL. Digit Client ID For example if your DP ID is IN300*** and Client ID is 12****** then your user ID is IN300***12****** ii) For Members who 16 hold shares in demat Digit Beneficiary ID account with CDSL. For example if your Beneficiary ID is 12************** then your user ID is 12************** iii) For Members EVEN Number holding shares followed by Folio in Physical Form. Number registered with the Company. For example if Folio Number is 001*** and EVEN is 101456 then user ID is 101456001*** 475 Future ready for smart choicesNotice E. Your password details are given below: i) If you are already for e-Voting, then you can use your existing password to login and cast your vote. registered ii) If you are using NSDL e-Voting system for the first time, you will need to retrieve the ‘initial password’ which was communicated to you. Once you retrieve your ‘initial password’, you need to enter the ‘initial password’ and the system will compel you to change your password. iii) How to retrieve your ‘initial password’? If your e-mail ID is registered in your demat account or with the Company, your ‘initial password’ is communicated to you on your e-mail ID. Trace the e-mail sent to you from NSDL from your mailbox. Open the e-mail and open the attachment i.e. a .pdf file. Open the .pdf file. The password to open the .pdf file is your 8 digit Client ID for NSDL account, last 8 digits of Client ID for CDSL account or folio number for shares held in physical form. The .pdf file contains your ‘User ID’ and your ‘initial password’. F. If you are unable to retrieve or have not received the 'initial password' or have forgotten your password: i) Click on 'Forgot User Details/Password?' (If you are holding shares in your demat account with NSDL or CDSL) option available on www.evoting.nsdl.com. ii) iii) you Reset are holding 'Physical User Password?' in (If shares physical mode) option available on www.evoting.nsdl.com. still unable to get If you are the password by aforesaid two options, you can send a request at evoting@nsdl.co.in mentioning your demat account number/folio number, your PAN, your name and your registered address. G. After entering your password, tick on Agree to 'Terms and Conditions' by selecting on the check box. 476 H. Now, you will have to click on 'Login' button. I. After you click on the 'Login' button, Home page of e-Voting will open. Step 2: Cast your vote electronically on NSDL e-Voting system. How to cast your vote electronically on NSDL e-Voting system? A. After successful login at Step 1, you will be able to see the Home page of e-Voting. Click on e-Voting. Then, click on Active Voting Cycles. B. C. D. E. F. G. H. After clicking on Active Voting Cycles, you will be able to see all the companies 'EVEN' in which you are holding shares and whose voting cycle is in active status. Select 'EVEN' of company for which you wish to cast your vote. Now you are ready for e-Voting as the Voting page opens. Cast your vote by selecting appropriate options i.e. assent or dissent, verify/ modify the number of shares for which you wish to cast your vote and click on 'Submit' and also 'Confirm' when prompted. Upon confirmation, the message 'Vote cast successfully' will be displayed. You can also take the printout of the votes cast by you by clicking on the print option on the confirmation page. Once you confirm your vote on the resolution, you will not be allowed to modify your vote. VII. The instructions for Members for e-Voting during the proceedings of the AGM are, as under: A. The procedure for remote e-Voting during the AGM is same as the instructions mentioned above for remote e-Voting since the Meeting is being held through VC/OAVM. B. Only those Members, who will be present in the AGM through VC/OAVM facility and have not cast their vote on the Resolutions through remote e-Voting and are otherwise not barred from doing so, shall be eligible to vote through e-Voting system in the AGM. NoticeThe Tata Power Company Limited Integrated Annual Report 2019-20 XII. The Chairman shall, at the AGM, at the end of discussion on the resolutions on which voting is to be held, allow voting, by use of remote e-Voting system for all those Members who are present during the AGM through VC/OAVM but have not cast their votes by availing the remote e-Voting facility. The remote e-Voting module during the AGM shall be disabled by NSDL for voting 15 minutes after the conclusion of the Meeting. XIII. The Scrutinizer shall, after the conclusion of voting at the AGM, first count the votes cast during the AGM and, thereafter, unblock the votes cast through remote e-Voting and shall make, not later than 48 hours from the conclusion of the AGM, a Consolidated Scrutinizer’s Report of the total votes cast in favour or against, if any, to the Chairman or a person authorised by him in writing, who shall countersign the same and declare the result of the voting forthwith. immediately after XIV. The Results declared, alongwith the Scrutinizer’s Report, shall be placed on the Company’s website www.tatapower.com and on the website of NSDL www.evoting.nsdl.com, the declaration of the result by the Chairman or a person authorised by him in writing. The results shall also be immediately forwarded to the Stock Exchanges where the Company’s Equity Shares are listed viz. BSE and NSE and be made available on their respective websites viz. www.bseindia.com and www.nseindia.com. By Order of the Board of Directors, For The Tata Power Company Limited H. M. Mistry Company Secretary FCS No.: 3606 Mumbai, 2nd July 2020 Registered Office: Bombay House, 24, Homi Mody Street, Mumbai 400 001. CIN: L28920MH1919PLC000567 Tel: 91 22 6665 8282 Fax: 91 22 6665 8801 E-mail: tatapower@tatapower.com Website: www.tatapower.com (i.e. other General Guidelines for Members Institutional Members than i) individuals, HUF, NRI, etc.) are required to send scanned copy (PDF/JPG format) of the relevant Board Resolution/Authority letter, etc. with attested specimen signature of the duly authorised signatory(ies) who are authorised to vote, to the Scrutinizer by e-mail to cs@parikhassociates.com with a copy marked to evoting@nsdl.co.in. ii) iii) iv) It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential. Login to the e-Voting website will be disabled upon five unsuccessful attempts to key in the correct password. In such an event, you will need to go through the 'Forgot User Details/Password?' or 'Physical User Reset Password?' option available on www.evoting.nsdl.com to reset the password. In case of any queries, you may refer the Frequently Asked Questions for Shareholders and e-Voting user manual for Shareholders available at the download section of www.evoting.nsdl.com or call on toll free no.: 1800-222-990 or send a request at evoting@nsdl.co.in. (FAQs) You can also update your mobile number and e-mail id in the user profile details of the folio which may be used for sending future communication(s). VIII. The voting rights of Members shall be in proportion to their shares of the paid-up equity share capital of the Company as on the cut-off date of Thursday, 23rd July 2020. IX. X. XI. Any person who acquires shares of the Company and becomes a Member of the Company after dispatch of the Notice and holding shares as of the cut-off date i.e. Thursday, 23rd July 2020, may obtain the login ID and password by sending a request at evoting@nsdl.co.in or the Company/TSR. A person whose name is recorded in the Register of Members or in the Register of Beneficial Owners maintained by the Depositories as on the cut-off date only shall be entitled to avail the facility of remote e-Voting, as well as voting at the meeting. The Board of Directors has appointed Mr. P. N. Parikh (FCS 327) or failing him, Mr. Mitesh Dhabliwala (FCS 8331) of M/s. Parikh and Associates, Company Secretaries as Scrutinizer to scrutinize the voting at the AGM and remote e-Voting process, in a fair and transparent manner. 477 Future ready for smart choicesNotice EXPLANATORY STATEMENT As required by Section 102 of the Companies Act, 2013 (the “Act”), the following Explanatory Statement sets out all material facts relating to the business mentioned under Item Nos.5 to 7 of the accompanying Notice dated 2nd July 2020: Item No.5: In accordance with Sections 23(1)(b), 42 and 62(1)(c) and other applicable provisions of the Companies Act, 2013 (the “Act”) and the Companies (Prospectus and Allotment of Securities) Rules, 2014, the Companies (Share Capital and Debentures) Rules, 2014 and other applicable rules made thereunder (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) and in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (the “SEBI ICDR Regulations”) and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “Listing Regulations”), as amended from time to time, approval of shareholders of the Company by way of special resolution is required to issue securities by way of private placement on a preferential basis to Tata Sons Private Limited (“Tata Sons”). The Company is working on a long-term strategic plan focused on reducing debt thereby strengthening the balance sheet and improve its overall return metrics. This long-term plan involves: for the Company to participate in emerging opportunities in the power sector. The details in relation to the Preferential Issue as required under the SEBI ICDR Regulations and the Act read with the rules issued thereunder, are set forth below: i) Particulars of the Preferential Issue including date of passing of Board resolution The Board of Directors at its meeting held on 2nd July 2020 had, subject to the approval of the Members and such other approvals as may be required, approved the issuance of up to 49,05,66,037 Equity Shares at a price of ₹ 53 per Equity Share, aggregating to ₹ 2,600 crore (Rupees Two thousand six hundred crore only) to Tata Sons, for cash consideration, on a preferential basis. ii) Kinds of securities offered and the price at which security is being offered Up to 49,05,66,037 Equity Shares of the Company, at a price of ₹ 53 (including a premium of ₹ 52) per Equity Share aggregating up to ₹ 2,600 crore (Rupees Two thousand six hundred crore only), such price being not less than the minimum price as on the Relevant Date determined in accordance with the provisions of Chapter V of the SEBI ICDR Regulations. iii) Objects of the Preferential Issue and aggregate Divestment of non-core and certain overseas investments; amount proposed to be raised a) b) Restructuring of some of its businesses to unlock value and simplify the structure of the Company and its subsidiaries. Consequent to this, the Company has decided to pursue setting up of an Investment Infrastructure Trust (InvIT) for its renewable business; c) Raising of equity to reduce unsustainable debt in Tata Power and/or its subsidiaries. In accordance with the above plan, the Board, pursuant to its resolution dated 2nd July 2020, has approved the proposed Preferential Issue to Tata Sons at a price of ₹ 53 per Equity Share (“Issue Price”), and consequently, recommends the resolution as set out above to be passed by the Members through a special resolution. The floor price for the issue of the shares on a preferential basis under the applicable provisions of the SEBI ICDR Regulations is ₹ 43.73 per Equity Share. Issue to its Promoter was considered The Preferential appropriate to minimise the dilution impact and for a successful and speedy execution in order to immediately help the Company to reduce its debt. Implementation of the overall plan which includes equity raise, divestment and business restructuring plans will strengthen the balance sheet of the Company, which in turn is expected to provide a strong platform 478 The Company proposes to raise an amount aggregating up to ₹ 2,600 crore through the Preferential Issue. The proceeds of the Preferential Issue will be utilized for prepayment of borrowings of the Company and/or its subsidiaries, meeting future funding requirements and other general corporate purposes of the Company and its subsidiaries. iv) Relevant Date In terms of the provisions of Chapter V of the SEBI ICDR Regulations, relevant date for determining the floor price for the Preferential Issue is 30th June 2020, being the date 30 days prior to the date of this Annual General Meeting (AGM). v) Basis on which the price has been arrived at and justification for the price (including premium, if any) The Equity Shares of the Company are listed on BSE Limited (“BSE”) and National Stock Exchange of India Limited (“NSE”) (together referred to as the “Stock Exchanges”). The Equity Shares are frequently traded in terms of the SEBI ICDR Regulations and NSE, being the Stock Exchange with higher trading volumes for the said period, has been considered for determining the floor price in accordance with the SEBI ICDR Regulations. NoticeThe Tata Power Company Limited Integrated Annual Report 2019-20 In terms of the applicable provisions of the SEBI ICDR Regulations, the floor price at which the Equity Shares shall be issued is ₹ 43.73 per Equity Share, being higher of the following: x) a) b) Average of the weekly high and low of the volume weighted average price of the Equity Shares of the Company quoted on NSE, during the twenty-six (26) weeks preceding the Relevant Date, i.e. ₹ 43.28 per Equity Share; or Average of the weekly high and low of the volume weighted average price of the Equity Shares of the Company quoted on NSE, during the two (2) weeks preceding the Relevant Date i.e. ₹ 43.73 per Equity Share. The pricing of the Equity Shares to be allotted on preferential basis is ₹ 53 per Equity Share which is not in the manner set out above. lower than the floor price determined Intent of the Promoters, directors or key managerial personnel of the Company to subscribe to the Preferential Issue; contribution being made by the Promoters or Directors either as part of the Preferential in furtherance of the objects Issue or separately The Equity Shares shall be issued to Tata Sons, the Promoter of the Company. Tata Sons has indicated its intention to subscribe to the Preferential Issue. None of the Directors or Key Managerial Personnel of the Company intends to subscribe to any of the Equity Shares proposed to be issued under the Preferential Issue or otherwise contribute to the Preferential Issue or separately in furtherance of the objects specified herein above. vi) vii) Time frame within which the Preferential Issue shall be completed As required under the SEBI ICDR Regulations, the Equity Shares shall be allotted by the Company within a period of 15 days from the date of passing of this Resolution, provided that where the allotment of the proposed Equity Shares is pending on account of receipt of any approval or permission from any regulatory or statutory authority, the allotment shall be completed within a period of 15 days from the date of receipt of last of such approvals or permissions. Identity of the natural persons who are the ultimate beneficial owners of the Equity Shares proposed to be allotted and/or who ultimately control the proposed allottees, the percentage of post Preferential Issue capital that may be held by them and change in control, if any, in the Company consequent to the Preferential Issue The Equity Shares are proposed to be allotted to Tata Sons, Promoter of the Company. Details of shareholding of Tata Sons in the Company, prior to and after the proposed Preferential Issue, are as under: Pre-Preferential Issue As on 30th June 2020 Post-Allotment of Equity Shares pursuant to the Preferential Issue No. of Equity Shares held Percentage held No. of Equity Shares held Percentage held 95,39,46,984 35.27 1,44,45,13,021 45.21 The majority of the equity shares of Tata Sons are held by certain public charitable trusts (“Tata Trusts”) and as such, there is no identifiable beneficiary, other than the public at large. The names of the current Trustees of Tata Trusts are: Mr. R. N. Tata, Mr. V. Srinivasan, Mr. V. Singh, Mr. R. K. Krishna Kumar, Mr. J. N. Tata, Mr. N. N. Tata, Mr. Jehangir H. C. Jehangir, Mr. J. N. Mistry and Mr. Pramit Jhaveri. The said details of natural persons are given only for the purpose to know natural persons. Tata Sons holds beneficial interest in the Company to the extent of its shareholding and the Equity Shares to be allotted. There shall be no change in control of the Company pursuant to the aforesaid Preferential Issue. However, the percentage of shareholding and voting rights exercised by Tata Sons, the Promoter of the Company, will change in accordance with the change in the shareholding pattern as set in the Annexure - B. xi) Lock-in Period The Equity Shares shall be locked-in for such period as specified under Regulations 167 and 168 of the SEBI ICDR Regulations. The entire pre-Preferential Issue shareholding of Tata Sons shall be locked-in from the Relevant Date up to a period of six months from the date of the trading approval as specified under Regulation 167(6) of the SEBI ICDR Regulations. viii) Principal terms of assets charged as securities xii) Undertakings Not applicable. ix) Shareholding pattern of the Company before and after the Preferential Issue Please refer Annexure - B to this Notice for details. a) None of the Company, its Directors or Promoter have been declared as wilful defaulter as defined under the SEBI ICDR Regulations. None of its Directors is a fugitive economic offender as defined under the SEBI ICDR Regulations. 479 Future ready for smart choicesNotice b) c) The Company is eligible to make the Preferential Issue to its Promoter under Chapter V of the SEBI ICDR Regulations. As the Equity Shares have been listed for a period of more than twenty-six weeks as on the Relevant Date, the provisions of Regulation 164(3) of SEBI ICDR Regulations governing re-computation of the price of shares shall not be applicable. xiii) Auditors’ Certificate The certificate from S R B C & CO LLP, Chartered Accountants, being the Statutory Auditors of the Company certifying that the Preferential Issue is being made in accordance with the requirements contained in the SEBI ICDR Regulations shall be made available for inspection by the Members during the meeting. xiv) Other disclosures a) b) c) During the period from 1st April 2020 until the date of Notice of this AGM, the Company has not made any preferential issue of Equity Shares. Report of the registered valuer is not required under the provisions of second proviso to Rule 13(1) of the Companies (Share Capital and Debentures) Rules, 2014 for the proposed Preferential Issue. Neither Tata Sons nor any member of the promoter group of the Company have sold or transferred any Equity Shares during the six months preceding the Relevant Date. In accordance with the provisions of Sections 23, 42 and 62 of the Act read with applicable rules thereto and relevant provisions of the SEBI ICDR Regulations, approval of the Members for issue and allotment of the said Equity Shares to Tata Sons is being sought by way of a special resolution as set out in the said item of the Notice. Issue of the Equity Shares pursuant to the Preferential Issue would be within the Authorised Share Capital of the Company. The Board of Directors believes that the proposed Preferential Issue is in the best interest of the Company and its Members and, therefore, recommends the Special Resolution at Item No.5 of the accompanying Notice for approval by the Members of the Company. None of the Directors, Key Managerial Personnel (KMP) or their respective relatives are, in any way, concerned or interested, financially or otherwise, except as shareholders in general in the said resolution. Further, Mr. N. Chandrasekaran and Mr. Saurabh Agrawal, common directors on the Board of the Company and Tata Sons (Promoter of the Company), though not interested in accordance with the Act, may be deemed to be interested as a good governance practice. 480 Item No.6: As Members are aware, the Company is undertaking several projects/contracts in India as well as outside India mainly for the erection, operation and maintenance of power generation, transmission and distribution facilities. To enable the Directors to appoint Branch Auditors for the purpose of auditing the accounts of the Company’s Branch Offices outside India (whether existing or as may be established), the necessary authorisation of the Members is being obtained in accordance with the provisions of Section 143 of the Act, in terms of the Resolution at Item No.6 of the accompanying Notice. The Board recommends the Resolution at Item No.6 of the accompanying Notice for approval by the Members of the Company. None of the Directors or KMP of the Company or their respective relatives are concerned or interested in the Resolution at Item No.6 of the accompanying Notice. Item No.7: Pursuant to Section 148 of the Act, the Company is required to have the audit of its cost records conducted by a cost accountant in practice. On the recommendation of the Audit Committee of Directors, the Board of Directors have approved the re-appointment of M/s. Sanjay Gupta and Associates (SGA) (Firm Registration No.000212) as the Cost Auditors of the Company to conduct audit of cost records maintained by the Company for FY21, at a remuneration of ₹ 6,50,000 (Rupees Six lakh fifty thousand) plus applicable taxes, travel and actual out-of-pocket expenses. SGA have furnished a certificate regarding their eligibility for appointment as Cost Auditors of the Company. They have vast experience in the field of cost audit and have conducted the audit of the cost records of the Company for previous years under the provisions of the Act. The Board recommends the Resolution at Item No.7 of the accompanying Notice for ratification of the Cost Auditors’ remuneration by the Members of the Company. None of the Directors or KMP of the Company or their respective relatives are concerned or interested in the Resolution at Item No.7 of the accompanying Notice. By Order of the Board of Directors, For The Tata Power Company Limited H. M. Mistry Company Secretary FCS No.: 3606 Mumbai, 2nd July 2020 Registered Office: Bombay House, 24, Homi Mody Street, Mumbai 400 001. CIN: L28920MH1919PLC000567 Tel: 91 22 6665 8282 Fax: 91 22 6665 8801 E-mail: tatapower@tatapower.com Website: www.tatapower.com NoticeThe Tata Power Company Limited Integrated Annual Report 2019-20 Details of the Director seeking re-appointment at the forthcoming Annual General Meeting (In pursuance of Regulations 26(4) and 36(3) of the Listing Regulations and Secretarial Standard - 2 on General Meetings) Annexure - A Name of Director DIN Date of Birth (Age) Date of Appointment Expertise in specific functional areas Mr. Hemant Bhargava 01922717 20th July 1959 (60 years) 24th August 2017 Mr. Hemant Bhargava retired as the Managing Director of Life Insurance Corporation of India effective 1st August 2019. A Master in Economics, Mr. Bhargava joined LIC in 1981 and has handled diverse portfolios across functions in India and internationally, including Marketing & Alternative Channels of distribution, Human Resource, Finance, Pension & Group Schemes, Estate Management & Office Services operations and Information Technology. As head of two of LIC's biggest zones among the eight, he was instrumental in increasing insurance penetration in fifteen states of India. Mr. Bhargava, with his expertise in business modeling and execution, had successfully launched a number of new projects in LIC, which includes designing and setting up the Micro Insurance vertical which was LIC's first comprehensive enterprise-wide initiative in financial inclusion space. LIC's foray into credit card as joint venture in collaboration with banking partners, founding LIC Cards Services Limited and launch of 'LIC Card' in 2009 was also headed by Mr. Bhargava. The 'Indian Business Group' in Mauritius for promoting the business interests of companies of Indian origin, with the High Commissioner of India as the Patron, was founded by Mr. Bhargava as head of LIC's Mauritius operations. He also played key role in setting up newly formed SBU-International Operations to manage LIC's operation in about 14 countries and laid structural design to form a composite insurance company in the Kingdom of Saudi Arabia. Mr. Bhargava has been instrumental in shaping strategies of corporate India while serving on the Boards of many Indian companies. He was also the Ex-officio Chairman and Trustee of Life Insurance Corporation of India Golden Jubilee Foundation, Deputy President of Insurance Institute of India and Member of the Governing Board of National Insurance Academy, Pune Mr. Bhargava is an Alumni of Jamnalal Bajaj Institute of Management. He has studied Strategic Management at ISB, Hyderabad. M.A. in Economics • Voltas Limited • • Larsen and Toubro Limited ITC Limited Audit Committee Member • ITC Limited CSR & Sustainability Committee Member • N.A. 3 ITC Limited Nil Nil Qualifications Directorships held in other Public companies (excluding foreign companies) Committee position held in other companies Remuneration No. of meetings of the Board attended during the year No. of shares held: (a) Own (b) For other persons on a beneficial basis For other details such as relationship with other Directors and KMP in respect of Mr. Hemant Bhargava, please refer to the Report on Corporate Governance, which is a part of this Annual Report. 481 Future ready for smart choicesNotice Pre and Post Preferential Issue Shareholding Pattern of the Company Annexure - B Sl. No. Category of Shareholder(s) Pre-Preferential Allotment Holding/Voting Rights (as on 30th June 2020) Post Allotment of Equity Shares Equity Shares Equity Shares No. % No. % (A) Promoters & Promoter Group holding (Indian) Promoter (Body Corporate) Promoter Group (Body Corporate) 95,39,46,984 5,27,44,544 35.27 1.95 144,45,13,021 5,27,44,544 Total Shareholding of Promoter and Promoter Group (A) 100,66,91,528 37.22 149,72,57,565 i) ii) Individual Shareholders holding nominal share capital upto ₹ 2 lakh Individual Shareholders holding nominal share capital in excess of ₹ 2 lakh 2,36,86,857 (B) Public Shareholding 1 Institutions (a) Mutual Funds/UTI (b) Alternate Investment Funds (c) Foreign Portfolio Investors (d) Financial Institutions/Banks (e) Insurance Companies Sub-Total (B)(1) 2 Central Government/State Government(s)/President of India Sub-Total (B)(2) 3 Non-Institutions (a) Individuals (b) NBFCs registered with RBI (c) Overseas Depositories (holding DRs) (balancing figure) (d) Any Other (specify) i) Bodies Corporates ii) Clearing Members iii) Limited Liability Partnership - LLP iv) HUF v) Trusts vi) IEPF Suspense-A/c vii) Non Resident Individuals viii) Director or Director's Relatives ix) OCBs/Foreign Cos x) OCBs/Foreign Bodies - DR xi) QIB-Insurance Co. Regd. with IRDA Sub Total (B)(3) Total Public Shareholding (B) = (B) (1) + (B)(2) + (B)(3) Total (A)+(B) 38,56,32,618 1,44,20,591 34,86,27,714 1,82,08,325 40,46,61,108 117,15,50,356 2,56,09,803 2,56,09,803 38,91,05,342 36,54,18,485 1,26,450 4,22,300 11,12,67,731 3,53,38,108 2,37,49,535 9,42,083 93,72,473 25,10,814 80,27,603 2,81,54,307 2,16,262 4,000 3,65,990 25,86,556 14.26 0.53 12.89 0.67 14.96 43.31 0.95 0.95 14.39 13.51 0.88 0.00 0.02 4.11 1.31 0.88 0.03 0.35 0.09 0.30 1.04 0.01 0.00 0.01 0.10 38,56,32,618 1,44,20,591 34,86,27,714 1,82,08,325 40,46,61,108 117,15,50,356 2,56,09,803 2,56,09,803 38,91,05,342 36,54,18,485 2,36,86,857 1,26,450 4,22,300 11,12,67,731 3,53,38,108 2,37,49,535 9,42,083 93,72,473 25,10,814 80,27,603 2,81,54,307 2,16,262 4,000 3,65,990 25,86,556 50,09,21,823 169,80,81,982 18.52 62.78 50,09,21,823 169,80,81,982 270,47,73,510 100.00 319,53,39,547 (C) Shares held by custodians against which DRs are issued (GDR) - - - Total (A)+(B)+(C) 270,47,73,510 100.00 319,53,39,547 100.00 482 45.21 1.65 46.86 12.07 0.45 10.91 0.57 12.66 36.66 0.80 0.80 12.18 11.44 0.74 0.00 0.01 3.48 1.11 0.74 0.03 0.29 0.08 0.25 0.88 0.01 0.00 0.01 0.08 15.68 53.14 100.00 - NoticeThe Tata Power Company Limited Integrated Annual Report 2019-20 483 Future ready for smart choicesIndependent Assurance Statement 484 Assurance CertificateThe Tata Power Company Limited Integrated Annual Report 2019-20 Glossary of Abbreviations Integrated Reporting CERT Computer Emergency Response Team AA AC ACC AI AIDS AT&C ATM B2B B2C B2G Affirmative Action Air Conditioner Apex Compliance Committee Artificial Intelligence Acquired immunodeficiency syndrome Aggregate Technical & Commercial Automated Teller Machine Business-to-Business service Business-to-Consumer Business-to-government BCDMP Business Continuity and Disaster Management Plan BCP BEE BESS BEST BFP BITS Business Continuity Planning Bureau of Energy Efficiency Battery Energy Storage System Brihanmumbai Electric Supply and Transport Undertaking Boiler Feed Pump Birla Institute of technology and Sciences BLDC Brushless DC Motor BPL BPS BSF BSI CBIP CCRA CDM CEI Below Poverty Line Business Process Services Border Security Force British Standards Institution Central Board of Irrigation and Power Central Control Room for Renewable Assets Clean Development Mechanism Community Engagement Index CG C&I CIBMS CKM CMC CLTS CMG CMS CMS CO2 CPCB CPSU CRC CRM Corporate Governance Control and Instrumentation Comprehensive Integrated Border Management System Circuit Kilometre Compliance Monitoring Cell Community Led Total Sanitation Connection Management Group Compliance Management System Content Marketing Summit Carbon Dioxide Central Pollution Control Board Central Public Sector Undertaking Customer Relation Centre Customer Relationship Management CRMC Cluster Risk Management Committees CSA CSAT CSR CW Control Self-Assessment Customer Satisfaction Corporate Social Responsibility Circulating Water DISCOMs Distribution Company DHPC Dagachhu Hydro Power Corporation DM DSM DT ECA ECB Demineralisation Demand Side Management Distribution Transformer Export Credit Agency External Commercial Borrowing CEIIC Clean Energy International Incubation Centre e-NACH Electronic National Automated Clearing House CEO CEP CER Chief Executive Officer ENCON Energy Conservation Condensate Extraction Pump Certified Emission Reduction EPC EV Engineering, Procurement and Construction Electric Vehicle 485 Future ready for smart choicesGlossary of Abbreviations FDA GHG GIS GJ GMI GRI GSS GW Fixed Duration Associates Greenhouse Gas Gas Insulated Switchgear Gigajoules Green Manufacturing Index Global Reporting Initiative KPO KYEC kWh LED LC LT Knowledge Process Outsourcing Know Your Energy Consumption kilowatt hours Light Emitting Diode Letter of Credit Low Tension Geo Science Services MCGM Municipal Corporation of Greater Mumbai Gigawatt MD Managing Director HESP Higher Education Sponsorship Program MERC Maharashtra Electricity Regulatory Commission Head of Department High Power Committee Human Resource Hot Re-heat High Tension High Voltage Industrial Energy Limited Internal Financial Control Indian Institutes of Technology Integrated Management System Indian rupee Internet of Things International Integrated Reporting Council Internal Rate of Return Industry Solution Units Information Technology ML Machine Learning MSETCL Maharashtra State Electricity Distribution Company Limited MSME Micro, Small and Medium Enterprises MT MU MW Medium Tension Million Units Megawatt MWh Megawatt hour MVA MYT Mega Volt Amp Multi Year Tariff NABARD National Bank for Agriculture and Rural Development NCR NDC NIO NGO NOC National Capital Region Nationally Determined Contributions National Institute of Oceanography Non-Governmental Organization No Objection Certificate Itezhi Tezhi Power Corporation NTPC National Thermal Power Corporation Limited International Union for Conservation of Nature Jhuggi Jhopri Jaguar Land Rover Joint Venture Kaltim Prima Coal Key Performance Indicator NVG ODF PAT PDS National Voluntary Guidelines Open Defecation Free Profit After Tax Public Distribution System PGWM Participatory Ground Water Management PILC Paper Insulated Lead Sheath Cable HOD HPC HR HRH HT HV IEL IFC IIT IMS INR IoT IIRC IRR ISU IT ITPC IUCN JJ JLR JV KPC KPI 486 Glossary of AbbreviationsThe Tata Power Company Limited Integrated Annual Report 2019-20 PMS PO Performance Management System Purchase Order POSH Prevention of Sexual Harassment PM PPA PPE Particulate Matter Power Purchase Agreement Personal Protective Equipment PPGCL Prayagraj Power Generation Company Limited PRCI PTL PV R&D Public Relations Council of India Powerlinks Transmission Limited Photovoltaic (Solar) Research and Development RAPH Regenerative Air Pre-heater RCM RE RMC RMCI RO Risk Control Matrix Renewable Energy Risk Management Committee Risk Mitigation Completion Index Reverse Osmosis ROCE Return on Capital Employed RPL Recognition for Prior Learning RSCM Responsible Supply Chain Management Right to Food Systems Applications and Products RTF SAP SASB SBO Strategic Business Objectives SCADA Supervisory Controlled and Data Acquisition Center SC SE SED SEMA SHG SHS Scheduled Caste Supervisory Trainees Strategic Engineering Division Stakeholder Engagement and Materiality Assessment Self-Help Groups Swachhata Hi Seva SHR SO2 SLDP SPCB SROI ST STP Station Heat Rate Sulphur Dioxide Senior Leaders' Development Program State Pollution Control Boards Social Return on Investment Scheduled Tribes Sewage Treatment Plant TCOC Tata Code of Conduct TCS TP Tata Consultancy Services The Tata Power Company Limited TERPL Trust Energy Resources Pte Limited TMTC Tata Management Training Centre TPADL Tata Power Ajmer Distribution Limited TPCDT Tata Power Community Development Trust TPDDL Tata Power Delhi Distribution Limited TPREL Tata Power Renewable Energy Limited TPRMG TP Renewable Microgrid Limited TPSDI Tata Power Skill Development Institute TPSSL Tata Power Solar Systems Limited TPTCL Tata Power Trading Company Limited TSDF Treatment, Storage and Disposal Facility UNFCCC United Nations Framework Convention on Climate Change UNDP United Nations Development Programme UNGC United Nations Global Compact Principles USD VFD United States Dollar Variable Frequency Drive WABA World Agency on Breastfeeding Alliance WLC Women Literacy Centres WREL Walwhan Renewable Energy Limited YTD Y-o-Y Year-to-date Year on Year 487 Sustainability Accounting Standards Board UN United Nations Future ready for smart choicesGlossary of Abbreviations Notes #futureready T H E TATA P OW E R CO M PA N Y L I M I T E D Bombay House 24, Homi Mody Street Mumbai - 400 001, INDIA. 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