Regen Annual Report 2015-16

Wind & Sun...
Our Perfect Partners
Annual Report 2015-16


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Significant Cost Savings Higher Efficiency Greater Output
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Higher Returns to Investor
2 Regen Powertech Private Limited


Creating long-term value Delivering growth
Emerged as third largest player in Indian market with installed capacity of more than 2,000 MW
Building for the future
Project pipeline of 1000 MW under execution and 4,000 MW under planning and development
Focused on our customers
Preferred suppliers across all customer groups and especially by Independent Power Producers (IPPs)
Expanding overseas
Market leader in Sri Lanka; foray into Bangladesh, Africa and Middle East Asia
Annual Report 2016 3


Socially, economically and environmentally sustainable
05 06 08 10 26
About Us
Our Vision
Our Success Formula
Our Business Explained Wind Power Industry in India
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Contents
34 Audit Report to Standalone Financials
38 Standalone Financial Statements 73 Audit Report to Consolidated
Financial Statements
78 Consolidated Financial Statem
4 Regen Powertech Private Limited
ents


About Us
Leading Renewable Energy Company
ReGen Powertech is a leading renewable energy company incepted in India in Dec 2006 with a focus of providing turnkey solutions in the wind energy sector. Today ReGen has more than 2000 MW of wind turbines installed across India and Sri Lanka.
End-to-end Wind Energy Solutions
ReGen provides complete end-to-end wind energy solutions including wind resource assessment, project development, manufacturing, erection and commissioning of the wind turbine and Operations & Maintenance (O&M) services.
State-of-the-art manufacturing facilities
Regen is one of the leading turbine manufacturers in India with state-of-the-art manufacturing facilities in Andhra Pradesh and Rajasthan with a combined production capacity of over 1,000 MW p.a. It has an exclusive technology tie-up with Vensys AG in Germany and it boasts of its own R&D centre at Tada.
Unique Wind Solar Hybrid System
ReGen's unique 'wind solar hybrid' produces a single electricity output more efficiently. This product will reduce cost of solar project by >15% per MW, and will enable ReGen to retrofit upto 500 MW solar projects with its existing 2.0 GW wind farms.
Annual Report 2016 5


Aiming for
greater heights
6 Regen Powertech Private Limited


Our Vision
To be world class in quality in production of wind energy converters and as wind farm developers. Being world class means providing outstanding quality, service, growth and value to every customer, supplier, shareholder, employee and to society.
Our Mission
To achieve and sustain highest market share and total satisfaction of all stakeholders by providing state of the art technology and sound business strategies.
We are poised for growth by:
• Providing high ROI to customers
• Partnering suppliers
• Building the future of our employees
• Creating wealth for share holders.
• Providing the benefits of clean and green energy to society
Annual Report 2016 7


@
8 Regen Powertech Private Limited
Our Success Formula
Team
Technology
Project Development
Tailor made solutions
Cost Optimization
`


• 1,766 professionals with 3000 years of collective experience
• 5 SBUs headed by Individuals with over 25 years of experience
• Technology partnership with Vensys Energy AG, Germany for 1.5 / 2 / 2.5 / 3 MW
• 2.8 MW WEC developed by Wind Direct – ReGen’s R&D Subsidiary based in Germany
• Variants of 1.5 MW – V77, V82, V87, V89 IEC class IV
• Wind Resource Assessment
• Land, micro-siting, Roads and Site Development
• Power Evacuation Facilities
• Concept to Commissioning (Turnkey solutions)
• Supply, Erection & Commissioning
• Comprehensive Operation and Maintenance Service
• Indigenization
• Value Engineering
• Wind-Solar Hybrid
Annual Report 2016 9


Our business explained
Wind Research
& Assessment
Identification of wind rich sites, wind study by establishing wind monitoring stations, analysing data to identify turbine suitability, micro siting and preparing wind resource assessment report.
Manufacturing
2 fully integrated, state- of-the-art manufacturing facilities at Andhra Pradesh and Rajasthan with ISO9001 and ISO14001 certification to produce
1.5 MW wind electric generators.
10 Regen Powertech Private Limited


Providing comprehensive turnkey solutions for wind power projects, covering the full wind value chain, including project development, supply,
erection, commissioning, operations and maintenance services of wind turbines as well as wind solar hybrid technology
Project Execution
Start-to-finish execution including legal (clearances, documentation), civil (soil testing, road preparation), procurement of parts and erection of wind turbine, setting up of internal and external overhead lines, sub-stations
Power Evacuation
Ensuring that generated power is immediately evacuated from the WPP to the grid for distribution. Involves feasibility
study, engineering and construction of the Sub-Station.
Operation &
Maintenance
Preventive and routine maintenance of wind farms. All WECs are SCADA connected to ensure 24X7 surveillance monitoring. 267 skilled workers to undertake O&M activities.
Annual Report 2016 11


Regen's Wind Research Team identifies wind rich sites and conducts wind study by establishing wind monitoring stations.
Wind Research & Assessment
12 Regen Powertech Private Limited


ReGen has a dedicated in-house team that conducts continuous wind studies across key locations in India to identify potential sites for setting up turbines. Latest scientific techniques and tools are used and the process usually takes 6-12 months to identify feasibility of a particular location.
ReGen’s wind research team is well experienced on working with essential wind resource assessment tools to prepare a comprehensive wind resource assessment reports. The team is highly equipped and trained on latest modelling tools like Wind Atlas Analysis & Application Program (WAsP), Windpro & Computational Fluid Dynamics (CFD) modelling.
Based on findings of wind studies/feasibility report, ReGen’s in-house team evaluates feasibility of power evacuation from identified sites. This includes assessment of existing transmission infrastructure from the identified sites, cost benefit analysis of setting up transmission infrastructure (including sub- stations etc.) and quantum of power evacuation that will impact project size at a location. It typically takes 2-3 months to assess feasibility of power evacuation.
61 wind masts are currently in operation across the country with majority in Tamil Nadu, Maharashtra and Rajasthan.
Annual Report 2016 13


Regen has 2 fully integrated, state-of-the-art manufacturing facilities at Andhra Pradesh and Rajasthan with ISO9001 and ISO14001 certification to produce 1.5 MW wind electric generators.
Manufacturing
14 Regen Powertech Private Limited
Manufacturing Facility at Andhra Pradesh
The fully integrated, state-of-the-art manufacturing facility at Tada, Andhra Pradesh was set up in 2008 to produce 1.5 MW wind electric generators, with a current capacity of 750MW per annum.


The facility has a very large scale Generator manufacturing facility, an integrated R&D, ultra-modern Converter manufacturing facility and houses a full-fledged Training Centre.
The facility also manufactures the hub, nacelle, generator, convertor system and electrical systems.
Manufacturing Facility at Rajasthan
The fully integrated, state-of-the-art manufacturing facility at Udaipur, Rajasthan was started in 2013 to produce 1.5 MW wind electric generators, with a current capacity of 300 MW per annum. It has state-of-the- art Vacuum Process Impregnation & Baking Ovens for the manufacturing of wind turbine generators.
The facility has a very large scale Generator manufacturing facility, Tower fabrication facility & Converter manufacturing facility.
Proposed blade manufacturing facilities
ReGen is in the process of setting up a blade production facility in Tada with annual capacity of 180 blade sets and another facility in Udaipur with annual capacity of 300 blade sets.
Wind solar hybrid system
The wind solar hybrid generates electrical energy by using a combination of wind turbines and solar PV modules. The Company has in-house manufacturing capability for most components required for the wind solar hybrid system.
Both facilities are ISO9001, ISO14001 and OHSAS 18001 certified and manufactures wind electric generators of international quality standards. The facility is an ultra-clean environment with energy conservation and employees’ safety as primary focus.
Annual Report 2016 15


Strong track record of project execution with 2 GW of wind power projects installed in India and abroad since inception and an established reputation driven by an experienced in-house project execution team
Project Execution & Management
16 Regen Powertech Private Limited


ReGen Powertech has vast experience in providing total turnkey project solutions in installation & commissioning of the Wind Farms. A highly qualified and experienced team operates 24/7 at site, taking utmost care in the delivery of quality projects to customers on scheduled time.
The project is managed professionally, right from preparation of site layout and Geo Technical Investigation of soil conditions at each of the Wind Energy Converter locations. Construction of foundation, Electrical Infrastructure, Installation of Wind Energy Converter, Commissioning of Wind Energy Converter, Installation and commissioning of SCADA and handing over the Wind Farm to the customers are planned at micro level. All the activities are quality controlled by an exclusive and dedicated TQM and Safety team on site, thus ensuring prompt attention & control of all the activities.
ReGen with its dedicated project management team ensures that all the wind energy projects commissioned across the country are completed to the utmost satisfaction of its customers.
The Company has a Project pipeline of 1000 MW under execution and 4,000 MW under planning and development
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Power Evacuation
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Power evacuation is a critical function that allows generated power to be immediately evacuated from the WPP to the grid for distribution.
ReGen conducts overall Power System Studies in the area where wind power potential exists. Based on findings of wind studies/feasibility report, ReGen’s in-house team evaluates feasibility of power evacuation from identified sites. This includes assesment of existing transmission infratsructure from the identified sites, cost benefit analysis of setting up transmission infrastructure and quantum of power evacuation that will impact project size at a location. It typically takes 2-3 months to assess feasibility of power evacuation.
ReGen has the expertise and a deep understanding of the grid network and a proven track record of constructing new substations at voltage levels ranging from 110 KV to 220 KV. Construction of substation also includes engineering of the Sub-Station. The state of the art Sub-Stations are fully functional across many states in India.
Annual Report 2016 19
ReGen with its team of highly experienced professionals ensures that power generated is immediately evacuated from the WPP to the grid for distribution.


ReGen provides comprehensive operations and maintenance services that increase turbine reliability and in turn revenues.
Operations & Maintenance
20 Regen Powertech Private Limited
ReGen offers consistently world-class O&M services delivered by well-trained, motivated professionals who implement proven, site-specific programs designed to maximize owner value through operational risk mitigation.


ReGen Powertech provides comprehensive operations and maintenance services that increase turbine reliability and in turn revenues.
The O&M team comprises 332 trained skilled manpower backed by fully equipped infrastructure, a Central Team in Chennai and strong presence in our site across India and Sri Lanka.
All WECs are SCADA connected to ensure 24x7x365 surveillance monitoring, which is provided at each site, Customer Premises & Central Monitoring Station (CMS) at Chennai.
Preventive and routine maintenance of wind farms are done on an ongoing basis.
We partner with wind project owners, aligning our goals with theirs to maximize profits and ensure success over the full project life span of 20 years.
SCADA
ReGen SCADA (Supervisory Control and Data Acquisition) is developed for real time supervisory controlling, monitoring of each wind turbine and the wind farm. It also collects historical data logged and performs analysis for each wind turbine and for the entire wind farm.
All turbines are SCADA connected to ensure 24X7 surveillance monitoring provided at Site, Customer premises, Control Room in Chennai.
Our machine availability is more than 98%, the highest in the country.
Annual Report 2016 21


ReGen's 'Wind Solar Hybrid' that produces a single electricity output more efficiently. This product will reduce cost of solar project by >15% per MW, and will enable Company to retrofit up to 500 MW solar projects with its existing 2 GW wind farms.
Wind-Solar Hybrid Best Poised for
True Hybrid
22 Regen Powertech Private Limited
Wind Solar Hybrid generates electrical energy by using an optimum combination of WECs and solar PVs with an efficiently shared infrastructure allowing for greater utilization of all resources.


The product allows stable power production, utilizing complementary nature of wind and solar power generation, reduced cost of land and other shared infrastructure, higher utilization with more power generated per square meter, higher efficiency of inverter, greater grid stability and lower transmission losses.
ReGen’s solar credentials
We recently launched central solar inverters in capacities starting 750 KW to 2.0 MW in single housing with water-cooled design suitable for harsh Indian ambient conditions.
Synergy with wind technology
The frequency controller in our gearless wind turbine is very similar in design to our solar converter. This strength is unique to ReGen’s power conversion technology and can be suitably harnessed for hybrid power solutions.
In-house manufacturing of hybrid power converter
Benefits due to similar parts used in wind and solar power converters, lean in-house manufacturing facilities with greater quality control and economies of scale.
Operations & Maintenance capability
Our very experienced and strong service network across the country has the ability to service the hybrid power converter along with other required maintenance of solar modules and structures.
Wind Solar Hybrid results in significant cost savings due
to better energy
output compared to standalone WECs and solar PVs and benefits from shared resources.
This product is suitable for Indian market where most locations have high solar intensity during daytime and high wind speeds at night.
The Company has commissioned India’s first wind-solar hybrid demonstration project at Vagarai, Tamil Nadu on July 5, 2015.
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ReGen is the only WEC manufacturer in India to have its own turbine testing facility at Vagarai site near Coimbatore, Tamil Nadu
Turbine Testing Facility
24 Regen Powertech Private Limited
The State of the Art testing facility is equipped with latest testing and measuring equipments. The testing was completed for Vensys 82 and Vensys 87


Certifications
• Design compliance certificate from TUV Nord
• Type Approval by TUV Nord
• ISO 9001 – received in June 2008 from TUV Nord
• ISO 14001 - received in November 2008 from GL
• ISO 18001 - received in November 2008 from GL
• Accredited by CWET
• Manufacturing Evaluation Certification in Feb 2009 by TUV Nord, Germany
The turbine testing facility was established in cooperation with Windtest Grevenbroich Gmbh
Annual Report 2016 25


Wind Power Industry in India
Favourable outlook in the long run driven by strong policy support, favourable regulatory framework and cost competitiveness of wind-based energy vis-a-vis conventional energy sources.
26 Regen Powertech Private Limited


India has become the 4th largest wind power market in the world, with total installed capacity of over 25 GW as of December 31st, 2015. Wind energy capacity addition in the country grew by more than 52% from last year to about 3,500 MW in FY16.
While IPPs are encouraged by satisfactory feed-in tariff- based power purchase agreements in key wind energy-rich states, as well as cost competitiveness with conventional power, non-IPP producers are likely to derive benefits from accelerated depreciation norms.
Wind IPPs have also been witnessing significant fund-raising activities and hence have a significant capital cushion for project finance.
Despite the stress on solar, wind energy has strong growth potential in near term owing to a more established and stable ecosystem. Wind energy’s technology and credibility is time tested over the past two decades.
The market potential for wind has also increased due to better technology turbines and higher hub height. In addition, from 250 KW machines, the industry is shifting towards more efficient 1.5-2.0 MW machines.
The outlook for the wind energy sector in the long run is favourable driven by strong policy support, favourable regulatory framework in the form of renewable purchase obligation (RPO) regulations, as well as the cost competitiveness of wind-based energy vis-a-vis conventional energy sources.
Indian Wind Turbine Manufacturers’ Association expects around 4.0 GW of wind capacity additions in FY17, given favourable policy impetus. Sizeable and fast growing wind sector in India with significant capacity additions is expected in the medium to long term due to government focus and the target of adding 60 GW in installed capacity by FY22.
Annual Report 2016 27


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Key policy incentives to promote wind energy
1
National Green Corridor Program
The Government announced a National Green Corridor Program (NGCP) worth Rs. 43,000 Crore to enable the flow of renewable energy into the National Grid Network. Specifically, the green energy corridor is grid connected network for the transmission of renewable energy produced from various renewable energy projects. The project was envisaged by PGCIL and proposed as a dedicated transmission network for renewable energy across different renewable energy potential states.
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Wind-Solar Hybrid Policy
Solar and winds are almost complementary to each other and hybdridation of two technologies would help in minimizing the variability apart from optimally utilizing the infrastructure including land and transmission system. Accordingly, National Wind-Solar Hybrid Policy have been prepared and released by the GOI for new wind-solar hybrid plants and also for encouraging hybridization of existing wind and solar plant.
3
Accelerated Depreciation (AD)
80% depreciation allowed in the first year for infrastructure projects including wind power.
Benefit: Provide tax savings for wind energy developers in the initial years of installations. Particularly favourable for small investors and captive users.


4
Generation Based Incentives (GBI)
Incentive of INR 0.50 per unit of electricity fed into the grid for a period of 4 to 10 years, over and above tariffs, albeit with a cap of INR 10mn per MW.
Benefit: Incentivize actual generation rather than mere establishment of capacity, thus attracting large IPPs and FDI in the wind market
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Feed in Tariffs
Developers can additionally receive a preferential tariff from state distribution companies to which they are selling electricity.
Several states have increased wind power tariffs to attract investments
Tariffs range from INR 3.51 (Tamil Nadu) to INR 5.92 per kWh for Madhya Pradesh
Benefit: A shift in development of wind power projects from wind rich states like Tamil Nadu and Gujarat to low wind density states like Rajasthan, Madhya Pradesh and Maharashtra
Renewable Purchase Obligations (RPO)
Mandate requiring electricity distribution companies to buy a fixed percentage of electricity from renewables (15% by 2020), through direct purchases or nd Renewable Energy Certificates (REC).
Benefit: RECs are being traded as a currency in the wind energy market whereby states that cannot directly purchase electricity from local wind developers can purchase RECs at market rates to meet the RPO quota. This removes the geographical barrier.
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Renewable Energy Certificates (REC)
Issued by Central Agency to renewable energy generators.
Can be exchanged only in Power Exchanges approved by the Central Electricity Regulatory Commission (CERC)
Benefit: One REC is equivalent to 1 MWh of energy generated from renewable sources. Helps entities meet the RPO set by different states
Other Policies
To attract investment , the government has proposed various policies such as 10-year tax holiday, 100% foreign direct investment, tax- free income from sale of power for 10 years, excise duty exemption, concessional customs duty for renewable energy equipment import, VAT at reduced rates, sector financing, tax concessions, electricity duty exemptions and concessional levy.
Annual Report 2016 29


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Financial Statements
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PERFORMANCE OF THE LAST 8 YEARS
FY 08
FY 09
FY 10
FY 11
FY 12
FY 13
FY 14
FY 16
-
16
38
82
292
162
311
391
-
16
54
136
428
590
901
1,292
V-77
V-77
V-77
V-77
V-77
V-77
V-77
V-82
V-82
V-82
V-82
V-82
V-87
V-87
V-87
Year
Installed Power Generation
Cumulative Installed Power Generation
Products / Model
Return Profile Year
Revenue
PBDIT
PBIT PBT PAT
Balance Sheet
Year
Share holders Equity Loan Fund
Other Liability
Total
Fixed Assets
Net Current Assets Other Assets
Total
EPS
(Rs. In Lakhs)
FY 08
FY 09
FY 10
FY 11
FY 12
FY 13
FY 14 (18 months)
FY 16 (18 months)
1,714
16,382
45,986
1,20,092
2,36,959
2,13,440
2,30,746
2,69,432
-1,862
-928
3,246
13,999
31,341
18,375
7,027
29,964
-1,897
-1,139
2,806
13,338
29,922
16,142
31,983
23,988
-1,973
-2,252
1,100
9,609
21,884
2,808
7,086
RUPEE SPENT FOR THE YEAR 2015-16 (18 MONTHS)
Depreciation 1%
Financial Expenses 8%
Other Expenses 19%
Personnel Cost 4%
Taxation
0% Profit After Tax 2%
Material Cost 66%
32
Regen Powertech Private Limited
16,577
3,087
-1,980
-2,268
1,099
7,324
15,238
967
4,234
4,190
FY 08
FY 09
FY 10
FY 11
FY 12
FY 13
FY 14
FY 16
9,000
9,000
9,000
13,256
43,510
49,762
53,951
61,069
1,909
7,577
13,043
22,739
23,546
20,086
4,624
678
9,389
11,935
9,154
21,150
10,909
22,043
35,994
76,446
81,783
67,730
82,896
1,605
4,297
4,867
13,571
20,643
33,975
33,047
36,963
7,318
8,026
11,610
18,509
22,286
-2,596
-56,142
3,695
1,986
4,254
5,567
3,914
33,517
50,404
90,825
42,238
10,909
16,577
22,043
35,994
76,446
81,783
67,730
82,896
-29.09
-10.8
5.23
34.85
68.28
3.98
17.36
16.93


35,000 30,000 25,000 20,000 15,000 10,000
5,000 - -5,000
18,000 16,000 14,000 12,000 10,000
8,000 6,000 4,000 2,000
- -2,000 -4,000
80 60 40 20
0 -20 -40
PBDIT
FY 08
FY 09
FY 10
FY 11
PAT
FY 12F
FY 13
FY14 FY16
FINANCIAL HIGHLIGHTS PBDIT
PAT
FY 08
FY 09
FY 10
FY 11
EPS
FY 12
FY 13
FY14 FY16
EPS
FY 08
FY 09
FY 10
FY 11
FY 12F
FY 13
FY14 FY16
Annual Report 2016 33


34
Regen Powertech Private Limited
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF REGEN POWERTECH PRIVATE LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of REGEN POWERTECH PRIVATE LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the eighteen month period (“period”) then ended, and a summary of the significant accounting policies and other explanatory information for the period then ended.
Management’s Responsibility for the Standalone Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under Section 133 of the Act, as applicable.
This responsibility also includes 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order under Section 143 (11) of the Act.
We conducted our audit of the standalone financial statements in accordance with the Standards on
Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the standalone financial statements.
Basis for Qualified Opinion
Attention is invited to Note 47 to the financial statements on certain trade arrangements entered into by the Company for purchase and sale of raw materials. In the absence of sufficient and appropriate audit evidences supporting the amounts recorded, we are unable to comment on the appropriateness or otherwise of recording of such receivables and the arrangement on a net basis in the Statement of Profit and Loss in these standalone financial statements. Also considering the nature of the arrangement, the ultimate shortfall, if any, on recoverability of these amounts cannot be presently determined and we are unable to express an opinion on this matter. This matter was also qualified in the report of the predecessor auditors in the financial statements for the eighteen month period ended September 30, 2014.


Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone financial statements give the information required by 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, 2016, and its profit and its cash flows for the period ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in the Annexure 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 except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph above,obtained all the information and explanations which to the best of our knowledge and belief were necessary
for the purposes of our audit.
b) Except for the possible effects of the matter
described in the Basis for Qualified Opinion paragraph above, 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.
c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
d) Except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid standalone financial statements comply with
the Accounting Standards prescribed under
Section 133 of the Act, as applicable.
e) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms
of Section 164 (2) of the Act.
f) The qualification relating to the maintenance of
accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above.
g) 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, 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 financial statements;
ii) The Company has made provision, as required under the applicable law or accounting standards, formaterialforeseeable losses,on long-term contracts includingderivative contracts;
iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
For Deloitte Haskins & Sells LLP Chartered Accountants (Registration Number: 117366W/W-100018)
Chennai, July 20, 2016
1. Standalone Financial Statements
Geetha Suryanarayanan
Partner (Membership No. 29519)
2.
Annual Report 2016 35


36
Regen Powertech Private Limited
ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT
(Referred to in paragraph (1) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)
(i) In respect of its fixed assets: of special nature and suitable alternative sources
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) Some of the fixed assets were physically verified during the period by the Management in accordance with a programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.
(ii) In respect of its inventories:
(a) As explained to us, the inventories were physically verified during the period (other than those held by sub-contractors) by the Management at reasonable intervals. In case of inventories with sub-contractors, confirmation of balances have been obtained.
(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013.
(iv) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are
are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.
(v) According to the information and explanations given to us,the Company has not accepted any deposits during the period.
(vi) Having regard to the nature of the Company’s business / activities, the maintenance of cost records has not been specified by the Central Government under section 148(1) of the Companies Act, 2013 and hence reporting under clause 3 (vi) the Order is not applicable.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Value Added Tax, Service Tax, Customs Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Value Added Tax, Service Tax, Customs Duty, Cess and other material statutory dues in arrears as at March 31, 2016 for a period of more than six months from the date they became payable.
(c) Details of dues of Income Tax, Value Added Tax and Central Sales Tax which have not been deposited as at March 31, 2016 on account of disputes are given below:


1. Standalone Financial Statements
2.
Name of the Statute
Nature of Dues
Forum where Dispute is pending
Period to which the amount relates
Amount unpaid (net of amounts paid under protest)(Rs. in Lakhs)
Maharashtra Value Added Tax 2002
Value Added Tax Including Interest and Penalty
Joint Commissioner of Appeals, Maharashtra
Financial Year 2008 -09
Rs. 86.00
Maharashtra Value Added Tax 2002
Value Added Tax
Joint Commissioner, Maharashtra
Financial Year 2009 -10
Rs. 107.86
Central Sales Tax 1956
Central Sales Tax
Joint Commissioner of Sales Tax
Financial year 2010-11
Rs.70.32
Tamil Nadu Value Added Tax, 2006
Value Added Tax Includ- ing Interest and Penalty
Deputy Commissioner, Tamil Nadu
Financial year 2013-14
Rs.7.86
Income Tax Act, 1961
Income Tax including interest
Deputy Commis- sioner of Income Tax, Chennai
Financial Year 2010-11
Rs. 430.13
(d) There are no amounts that are due to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 2013 and Rules made thereunder.
(viii) Without considering the possible effects of our audit qualification reported in Basis of Qualified Opinion of our Audit Report which is not quantifiable, the Company does not have accumulated losses at the end of the period and the Company has not incurred cash losses during the period covered by our audit and in the immediately preceeding period.
(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders except for certain delays in repayment of dues related to letters of credit during the period.
(x) According to the information and explanations given to us, the Company has not given guarantees for loans taken by others from banks and financial institutions.
(xi) The Company has not taken any term loans during the period.
(xii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the period.
For Deloitte Haskins & Sells LLP Chartered Accountants (Registration Number: 117366W/W-100018)
Chennai, July 20, 2016
Geetha Suryanarayanan
Partner (Membership No. 29519)
Annual Report 2016 37


Financial Statements
Balance Sheet
as at 31st March, 2016
(All amounts are in Rupees Lakhs unless otherwise stated)
Particulars
EQUITY AND LIABILITIES Shareholders' funds
Share capital
Reserves and surplus
Non-Current Liabilities
Long-term borrowings Deferred tax liabilities (net)
Other long-term liabilities Long-term provisions
Current liabilities
Short-term borrowings Trade payables
(i) Total Outstanding dues of micro enterprises and small enterprises
(ii) Total Outstanding dues of creditors other than micro enterprises and small enterprises Other current liabilities
Short-term provisions
Total
ASSETS Non-current assets Fixed assets
Tangible assets
Intangible assets
Capital work-in-progress
Intangible assets under development
Non-current investments Long-term loans and advances Other non-current assets
Current assets
Current Investments Inventories
Trade receivables
Cash and bank balances Short-term loans and advances Other current assets
Total
Note As at March No. 31, 2016
As at September 30,2014
3 2,487.59 2,427.89
4 58,581.32 51,523.55
61,068.91 53,951.44
5 677.79 4,623.95
6 - 1,103.05
7 14,096.80 7,571.24
8 7,052.91 479.84
21,827.50 13,778.08
9 77,389.63 54,821.46
10 2,174.19 1,125.22
10 53,751.96 60,593.08
11 12,088.24 38,605.75
12 3,954.12 9,131.93
149,358.14 164,277.44
232,254.55 232,006.96
13 29,419.85 26,711.77
13 2,916.30 79.88
A.1 2,468.64 3,198.93
2,158.31 3,055.92
14 38,899.74 7,899.74
15 2,065.80 43,008.19
16 1,272.30 40,346.11
79,200.94 124,300.54
17 42.61 19.44
18 36,980.94 30,699.89
19 62,093.48 46,091.94
20 14,402.93 12,475.75
21 35,009.18 22 4,524.47 153,053.61
13,091.26 5,328.14
107,706.42
Summary of significant accounting policies 2 The accompanying notes are an integral part of the financial statements
As per our report of even date
For DELOITTE HASKINS & SELLS LLP CHARTERED ACCOUNTANTS
Sd/-
Geetha Suryanarayanan
Partner
Place : Chennai
Date : July 20, 2016
For and on behalf of the Board of Directors
38 Regen Powertech Private Limited
Sd/- Sd/- Sd/- Sd/-
Madhusudan Khemka
Managing Director DIN No. 00757115
Place : Chennai
Date : July 20, 2016
R. Sundaresh K. Varahala Rao
Joint Managing Director Whole time Director DIN No. 00207427 DIN No. 01869380
B.S. Bhaskar
Company Secretary
232,254.55
232,006.96


Statement of Profit & Loss Account
for the period from October 1,2014 to March 31,2016
(All amounts are in Rupees Lakhs unless otherwise stated )
Particulars
Revenue
Revenue from operations (net)
Total Revenue
Expenses
Cost of materials consumed
(Increase)/decrease in inventories of finished goods, work-in-progress and traded goods Employee benefits expense
Operating and other expenses
Total Expenses
Earnings before exceptional items, Interest, tax, depreciation and amortisation
Less : Finance costs
Less : Depreciation and amortization expense Add : Other income
Add : Interest income
Add : Prior period Revenue (net)
Profit/(Loss) before Exceptional items and tax
Exceptional Item - Income
Exceptional Item - Expenses
Profit before tax
Tax expense/(benefit) :
- Current tax expense
- MAT credit
- Adjustment of tax relating to earlier periods
- Deferred tax (credit)/charge
Total tax (benefit)/expense
Profit after tax
Pre tax profit attributable to discontinuing operation
(Related income tax effect for the period ended March 31, 2016 NIL and September 30,
2014 Rs.386.94 lakhs)
Earnings per equity share [nominal value of share Rs.10] Basic (in Rs.)
(a) Continuing operations
(b) Total operations
Diluted (in Rs.)
(a) Continuing operations (b) Total operations
Summary of significant accounting policies 2 The accompanying notes are an integral part of the financial statements
As per our report of even date
1. Standalone Financial Statements
2.
Period from Note October
No. 1, 2014 to March
31, 2016
Period from April 1, 2013 to September 30, 2014
23 269,432.34 228,431.35
269,432.34 228,431.35
26 185,555.18 165,656.65
27 (4,809.85) 1,835.55
28 9,741.69 11,238.26
29 48,981.58 45,273.76
239,468.60 224,004.22
29,963.74 4,427.13
30 22,577.02 25,697.20
13 3,975.15 3,983.34
24.a 598.68 2,314.95
24.b 1,675.83 1,084.75
25 1,737.97 -
7,424.05 (21,853.71)
31 - 28,939.90
32.b 4,337.00 -
3,087.05 7,086.19
689.92 2,246.01
(689.92) (428.70)
- (220.65)
(1,103.05) 1,255.70
(1,103.05) 2,852.36
4,190.10 4,233.83
31 - 1,138.39
39
18.14 15.36
18.14 18.68
16.93 14.28
16.93 17.36
For DELOITTE HASKINS & SELLS LLP CHARTERED ACCOUNTANTS
Sd/-
Geetha Suryanarayanan
Partner
Place : Chennai
Date : July 20, 2016
For and on behalf of the Board of Directors
Sd/- Sd/- Sd/- Sd/-
Madhusudan Khemka
Managing Director DIN No. 00757115
Place : Chennai
Date : July 20, 2016
R. Sundaresh K. Varahala Rao B.S. Bhaskar
Joint Managing Director Whole time Director Company Secretary DIN No. 00207427 DIN No. 01869380
Annual Report 2016 39


Financial Statements
Cash Flow Statement
for the period from October 1, 2014 to March 31, 2016
(All amounts are in Rupees Lakhs unless otherwise stated )
A
Particulars
Cash Flow from Operating Activities
Net profit before tax as per Statement of Profit and Loss account
Add / (Less) : Exceptional item
Less : Prior period items, net
Adjustments for :
Depreciation and amortization expense
Unrealised exchange (gain) / loss, net
Contract compensation costs, net
Provision no longer required written back
Employee stock option expense
Provision for doubtful debts
Provision for generation guarantee
Provision for operation, maintenance & warranty
Provision for grid availability
Loss on sale of assets - net
Finance costs
Interest income
Operating profit before working capital changes
Movement in working capital:
Increase in other long term liabilities
Decrease in trade and other payables
Decrease in Other current liabilities
(Decrease) / Increase in provisions
Increase in long-term loans and advances
(Increase) / Decrease in inventories
(Increase) / Decrease in trade receivables
Decrease in short term loans and advances and other current assets
Decrease in other non current assets
Cash generated from operating activities
Direct taxes paid (net of refunds)
Net cash generated from operating activities
Cash Flow from Investing Activities
Advance against equity to subsidiary
Investment in Mutual funds
Proceeds from sale of Fixed Assets
Capital expenditure including capital advances
Bank balances not considered as Cash and cash equivalents
Interest received
Net cash used in investing activities
Period from
October 1, 2014 to March 31, 2016
3,087.05
4,337.00
(1,737.97)
3,975.15
30.74
881.80
(403.88)
(72.63)
-
226.52
(1,139.89)
1,500.00
7.56
16,860.78
(1,675.83)
25,876.40
8,346.11
(2,284.69)
(16,165.99)
(132.51)
(225.39)
(7,826.11)
(18,484.22)
14,905.34
8,073.81
12,082.75
(971.78)
11,110.97
-
(23.17)
56.94
(3,897.89)
(12.02)
1,366.74
(2,509.40)
Period from April 1, 2013 to September 30, 2014
7,086.19
(28,939.90)
-
3,983.34
447.68
-
(304.20)
(44.39)
372.35
329.47
87.45
2,250.00
48.93
20,426.86
(1,084.75)
4,659.03
7,999.69
(3,707.87)
(105.42)
262.77
(10,640.77)
3,909.19
12,884.25
28,219.63
155.19
43,635.69
(174.19)
43,461.50
(3,003.95)
(19.44)
227.23
(3,780.02)
989.27
1,084.75
(4,502.16)
B
40
Regen Powertech Private Limited


1. Standalone Financial Statements
2.
Period from
October 1, 2014 to March 31, 2016
67.76
(12,295.17)
22,568.17
(17,027.17)
(6,686.41)
1,915.16
831.01
-
2,746.17
14,402.93
11,656.76
2,746.17
Particulars
C Cash Flow from Financing Activities
Proceeds from long term borrowings
Repayment of long term borrowings
Proceeds / (Repayment) from short term borrowings,net Interest paid
Net cash used in financing activities
Net increase / (decrease) for the period (A+B+C)
Cash and cash equivalents at the beginning of the period Transfer on account of Sale of O&M business (refer note 30) Cash and cash equivalents at the end of the period
Note :
The reconciliation to the Cash and Cash Equivalents as given in Note 20 is as follows :
Cash and Cash Equivalents as per Note 20
Less : Lien marked Deposits
Cash and Cash Equivalents (as defined in AS 3 - Cash flow statements) as at the
end of the Period
Non Cash Transactions
1. Allotment of shares in RISPL as consideration for transfer of O&M - Refer Note 14 2. Allotment of Equity Shares on conversion of CCDs - Refer Note 5 A
Summary of significant accounting policies 2 The accompanying notes are an integral part of the financial statements
As per our report of even date
Period from April 1, 2013 to September 30, 2014
1,622.27 (9,316.64) (12,585.66) (20,865.66)
(41,145.69) (2,186.35)
3,019.77 (2.41) 831.01
12,475.75 11,644.74
831.01
For DELOITTE HASKINS & SELLS LLP CHARTERED ACCOUNTANTS
Sd/-
Geetha Suryanarayanan
Partner
Place : Chennai
Date : July 20, 2016
For and on behalf of the Board of Directors
Sd/- Sd/- Sd/- Sd/-
Madhusudan Khemka
Managing Director DIN No. 00757115
Place : Chennai
Date : July 20, 2016
R. Sundaresh K. Varahala Rao B.S. Bhaskar
Joint Managing Director Whole time Director Company Secretary DIN No. 00207427 DIN No. 01869380
Annual Report 2016 41


Financial Statements
Notes to financial statements
as at and for the period ended March 31, 2016
(All amounts are in Rupees Lakhs unless otherwise stated )
1. Background
Regen Powertech Private Limited (‘Regen’ or ‘the Company’), a subsidiary of NSL Power Equipment Trading Private Limited, was incorporated on December 27, 2006 in the State of Andhra Pradesh, India. The Company is engaged in the manufacture, supply of Wind Energy Converters(‘WECs’) and related accessories and equipment. The Company’s manufacturing facilities are located in Tada, Andhra Pradesh and Udaipur, Rajasthan.
2. Statement of significant accounting policies
a) Basis of preparation of financial statements
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
b) Use of estimates
The preparation of financial statements in conformity with Indian GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
c) Tangible Fixed assets and depreciation
Fixed assets are stated at cost less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any other cost attributable to bring the asset to its working condition for its intended use.
Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.
Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is de-recognized.
Depreciation on tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, in which case the life of the assets have been assessed as under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturer’s warranties and maintenance support, etc.
Leasehold improvements are amortized over the estimated useful lives of 3 years or the remaining primary lease period, whichever is less. Assets individually costing Rs. 5,000 /- or less are fully depreciated in the year of purchase.
d) Intangible assets and amortization
Intangible assets are acquired separately are measured on initial recognition at cost. Intangible assets are amortized using straight line basis over the estimated
42
Regen Powertech Private Limited
Plant and Machinery
Furniture and fixtures
Years
10-20
Computers
3
6
Office equipment
6
Vehicles
5
Vehicles – employee car scheme
4


useful economic life of the asset. The Company uses a rebuttable presumption that the useful life of intangible asset will not exceed ten years from the date when the asset is available for use. If the persuasive evidence exists to affect the useful life exceeds ten years, the Company amortizes the intangible assets over the best estimate of useful life. The amortization period and methods are reviewed at least at each financial end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly.
A summary of amortization policies applied to the Company’s intangible assets is as below:
Intangible Asset
e) Leases
Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. Lease management fees, legal charges and other initial direct costs are capitalized.
Leases where the lessor effectively retains, substantially, all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss account on a straight-line basis over the lease term.
f) Borrowing Costs
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange difference arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
Borrowing cost directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its
intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.
g) Impairment
i. The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.
ii. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
iii. A previously recognized impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.
h) Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. Provision for diminution in value is made to recognize a decline other than temporary in the value of long term investments.
i) Inventories
Raw materials
Inventories of raw materials are valued at lower of the cost and estimated net realizable value. Cost is determined on a weighted average basis.
Work-in-progress and finished goods
Work in progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and includes, where appropriate, labour
1. Standalone Financial Statements
2.
Estimated useful life
Computer Software
3 Years
License Fee
5 Years
Annual Report 2016 43


Financial Statements
Notes to financial statements Continued as at and for the period ended March 31, 2016
(All amounts are in Rupees Lakhs unless otherwise stated )
and a proportion of manufacturing overheads. Cost is determined on a weighted average basis.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
Loose tools and Frames
Tools are valued at cost and amortized over the estimated useful life of 2 years.
j) Provisions
A provision is recognized when an enterprise has a present obligation as a result of past event, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present values and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
k) Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenues are stated net of sales tax, VAT, service tax and sales returns.
Wind Energy Converter (‘WEC’) sales
Revenue from fixed price contracts to deliver WEC are recognized based on the percentage of completion method. The stage of completion is measured by reference to cost incurred to date, as a percentage of the total estimated cost for each contract. Materials produced specifically for the projects and / or identifiable to the project are considered as part of contract costs. The relevant cost is recognized in the financial statements in the period of recognition of revenues.
Recognition of profit is adjusted to ensure that it does not exceed the estimated overall contract margin during the execution of the contract. Further, if it is expected that the contract would be onerous, the estimated loss is provided for in the books of account.
Progress billing made in accordance with the terms of the contract is disclosed as trade receivable. Contract revenue earned in excess of billing has been reflected under “Other Current Assets” and billings in excess of contract revenue have been reflected under “Current Liabilities” in the balance sheet.
Revenue towards charges to the extent not matched by corresponding costs is appropriately deferred. Such revenues would be recognized in the subsequent years, on a matching principle, when corresponding costs are recognized.
Revenue from supply-only projects is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer as per terms of the respective sale contract.
Income from services
During the previous period revenues from operation and maintenance contracts were recognized pro-rata over the period of the contract as and when services were rendered. The Company collects service tax on behalf of the government and, therefore, it is not an economic benefit flowing to the Company. Hence, it is excluded from revenue.
Interest
Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
l) Grants and incentives
Government grants and incentives / subsidies are recognized when there is reasonable assurance that i) the Company will comply with the conditions attached to them and ii) the grant / incentive will be received.
m) Foreign currency transactions
Initial recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
Conversion
Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.
Exchange differences
Exchange differences arising on the settlement of monetary items or on reporting company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.
44
Regen Powertech Private Limited


Forward Exchange Contracts not intended for trading or speculation purposes
The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.
n) Derivatives
As per the Institute of Chartered Accountants of India (‘ICAI’) announcement, derivative contracts, other than those covered under AS-11, are marked to market on a portfolio basis and the net loss after considering the offsetting effect on the underlying hedge items is charged to the statement of profit and loss. Net gains on marked to market basis are not recognized.
o) Retirement and other employee benefits
Retirement benefit in the form of provident fund is a defined contribution scheme and the contributions are charged to the statement of Profit and Loss of the year when the contributions to the fund is due. There are no other obligations other than the contribution payable to the fund.
Gratuity liability is defined benefit obligations and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.
Short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method.
Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.
p) Income Taxes
Tax expense comprises current and deferred income taxes. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-Tax Act, 1961.
Deferred income taxes reflects the impact of current year timing differences between taxable income and
accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the reporting date.
Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. If the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.
At each balance sheet date the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
Minimum Alternate Tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown
1. Standalone Financial Statements
2.
Annual Report 2016 45


Financial Statements
Notes to financial statements Continued as at and for the period ended March 31, 2016
(All amounts are in Rupees Lakhs unless otherwise stated )
as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.
q) Employee Stock Compensation Cost
Measurement and disclosure of the employee share- based payment plans is done in accordance with the Guidance Note on Accounting for Employee Share- based Payments, issued by the Institute of Chartered Accountants of India. The Company measures compensation cost relating to employee stock options using the fair value method. Compensation expense is amortized over the vesting period of the option on a straight line basis.
r) Earnings per share
The earnings considered in ascertaining the Company’s earnings per share comprise the net profit after tax. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of shares, if any, which would have been issued on the conversion of all dilutive potential equity shares.
3. Share Capital
Authorised
25,000,000 (Previous period 25,000,000) equity shares of Rs.10 each 5,000,000 (Previous period 5,000,000) 0% compulsorily convertible preference
shares of Rs.10 each
Issued, Subscribed and Paid-up 23,264,493(Previousperiod22,667,479)equitysharesof Rs.10/-eachfullypaidup
1,611,453 (Previous period 1,611,453) 0% compulsorily convertible preference shares (CCPS) of Rs.10 each fully paid up
s) Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements unless the possibility of an outflow is remote.
t) Cash and cash equivalents
Cash and cash equivalents for the purpose of the cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
u) Measurement of EBITDA
As permitted by the guidance note on the Revised Schedule II to the Companies Act, 2013, the Company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. The Company measures EBITDA on the basis of profit / (loss) from continuing operations. In its measurement, the Company does not include depreciation and amortization expense, interest income, finance cost and tax expense.
As at March 31, 2016
2,500.00
500.00
2,326.44
161.15
2,487.59
As at September 30, 2014
2,500.00 500.00
2,266.74 161.15
2,427.89
46
Regen Powertech Private Limited


a. Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
1. Standalone Financial Statements
2.
Equity shares
At the beginning of the period
Issued during the period Outstanding at the end of the period
0% Compulsorily convertible preference shares
At the beginning of the period
Issued during the period Outstanding at the end of the period
b. Terms/rights attached to equity shares
For the period ended September 30, 2014
Amount 2,266.74
- 2,266.74
For the period ended September 30, 2014
For the period ended March 31, 2016
No. of shares
22,667,479
-
22,667,479
No. of shares
Amount
22,667,479
2,266.74
597,014
59.70
23,264,493
2,326.44
For the period ended March 31, 2016
No. of shares
Amount
No. of shares
1,611,453
161.15
1,611,453
-
1,611,453
Amount 161.15
-
161.15
-
-
1,611,453
161.15
The Company has only one class of equity shares having par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the board of directors is subject to approval of the share holders 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.
c. Terms of conversion of 0% Compulsorily Convertible Preference Shares ('CCPS')
0% CCPS shall be converted into fully paid equity shares on the conversion date in the ratio of 1 equity share per CCPS. The conversion date shall be 24 months from date of issue of CCPS (issued during the financial years 2011-12 and 2012-13) or any other date as may be mutually agreed between the shareholders and the company.
The CCPS shareholders have the same right to dividend as extended to the equity shareholders of the Company.
d. Shares held by holding/ultimate holding company and/or their subsidiaries/associates
Out of equity shares issued by the Company, shares held by its holding company, ultimate holding company and their subsidiaries/associates are as below:
Particulars
NSL Power Equipment Trading Private Limited, the holding
14,765,014 (previous period 14,168,000) equity shares of Rs.10 each fully paid
e. Details of shareholders in the Company
Equity shares
Equity shares of Rs.10 each fully paid
NSL Power Equipment Trading Private Limited, the holding company
Indivision India Partners, Mauritius(IIP)
TVS Shiram Growth Fund
0% Compulsorily convertible preference shares of Rs.10 each fully paid
Infrastructure Development Finance Corporation
Mcap India Private Limited
Summit FVCI
As at September 30, 2014
1,416.80
For the period ended September 30, 2014
% holding in the class
62.50 8,021,048 35.39
478,431 2.11
850,497 52.78
566,998 35.19
193,958 12.03
No. of shares
14,168,000
8,021,048
As at March 31, 2016
1,476.50
For the period ended March 31, 2016
No. of shares
% holding in the class
14,765,014
63.47
34.48
478,431
2.05
850,497
52.78
566,998
35.19
193,958
12.03
Annual Report 2016 47


Financial Statements
Notes to financial statements Continued as at and for the period ended March 31, 2016
(All amounts are in Rupees Lakhs unless otherwise stated )
As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.
f. Shares reserved for issue under options
i) For details of shares reserved for issue under the employee stock option (ESOP) plan of the company, please refer note 33. ii) For details of shares reserved for issue on conversion of preference shares, please refer note 3(c)
iii) For details of shares reserved for issue on conversion of debentures, please refer note 5(A) regarding terms of conversion.
4. Reserves and surplus
Securities premium account
Opening balance
Add: premium on conversion of Compulsorily convertible debentures (Refer Note 5A) Closing balance
Employee stock options outstanding
Gross employee stock compensation for options granted in earlier years Less: Stock options expired/forfeited
Less: Deferred employee stock compensation
Closing balance
Surplus in the statement of profit and loss
Opening balance
Profit for the period
Net surplus in the statement of profit and loss
Total reserves and surplus
5. Long-term borrowing
Debentures
Secured
NIL (previous period 10,000) 16.65% Compulsorily Convertible Debentures (CCD) of Rs. 100,000/- each - Refer Note A
Term loans
Secured
Indian rupee loan from bank Loan from other parties
Foreign currency loan from bank
Finance lease obligation (refer note 36.b)
Less: Current maturities of long term borrowings Compulsory convertible debentures
Indian rupee loan from bank
Loan from other parties
Foreign currency loan from bank
Finance lease obligation (refer note 36.b)
As at September 30, 2014
26,624.44 - 26,624.44
401.55 (113.70) (1.80) 286.05
20,379.23 4,233.83 24,613.06
51,523.55
10,000.00
2,161.03 2,791.67 3,184.53
18,137.23 202.13
(10,000.00) (625.00) (1,706.67) (1,273.75) (109.99) (13,715.41) 4,623.95
As at March 31, 2016
26,624.44
2,940.29
29,564.73
286.05
(72.62)
-
213.43
24,613.06
4,190.10
28,803.16
58,581.32
-
1,264.72
485.00
1,273.81
3,023.53
88.42
-
(639.72)
(485.00)
(1,273.81)
(35.63)
(2,434.16)
677.79
48
Regen Powertech Private Limited


A. Compulsorily Convertible Debentures (CCD)
"On 31st October 2011, 10,000 Compulsorily Convertible Debentures (“CCDs”) were issued which were convertible into equity shares after 48 months from the investment date (i.e. 31 October 2011) or such further date as agreed upon mutually between the Company and the debenture holder(s). Each debenture was convertible into such number of fully paid equity shares of the Company so as to provide the investor a return equivalent to the outstanding amount of the CCDs and any unpaid interest at the applicable interest rate on the date of conversion as set out in the Investment Agreement dated September 29, 2011."
The holders of the CCDs had a put option with certain key shareholders of the Company, requiring them to buy such CCDs, on the occurrence of certain identified events. In case the key shareholders were unable to do so, the Company had an obligation to convert such CCDs and buy back the resultant shares in accordance with the terms of the agreements, if such option were exercised by the holders of the CCDs. During the previous period the holder of the CCDs had exercised the put option for portion of the CCDs on key shareholders, pursuant to which NSL Power Equipment Trading Private Limited ('NSL Pet' or 'Holding Company') had bought 30% of the CCDs from the holder of CCDs. NSL Pet had also requested the Company to convert the CCDs to Equity share capital and the conversion has taken place during the current period. Pursuant to the exercise of Put Option by the holder of CCD, NSL Pet acquired 30% of the CCD from the holder.
"During the current period :
a. These CCDs were converted into equity shares
pursuant to which 597,014 shares were allotted at a face value of Rs. 10/ per equity share with a premium of Rs. 492.50 per equity share as approved by the Board of Directors.
b. The balance 70 % of the CCDs were converted to Optionally Convertible Debentures ( OCDs) based on the agreement between holders of the CCD (Debenture Agreement ) and the Company and were subsequently redeemed in full in accordance with the terms of the debenture agreement. "
Details of security
"The 16.65% CCDs were secured by exclusive mortgage / charge over immoveable / movable assets of three substations and two wind turbines of total capacity of 3.00 MW located in the state of Tamilnadu and first charge on entire cash flows, receivables, book debts and revenues of the company pertaining to the project assets (stated above) of whatsoever nature and whenever arising, both present and future. "
B. Term loans
i) Term loan from Axis Bank is repayable in 16 equal quarterly instalments commencing at the end of 15 months from the date of first drawdown, viz, March 28, 2013. The loan is secured against moveable fixed assets located at Udaipur unit at Rajasthan and mortgaged by deposit of title deeds over immoveable fixed assets at Udaipur unit ('the project') at Rajasthan on pari passu basis with other lenders to the project.
ii) Term loan from other parties comprises term loan of Rs. 5,775 lakhs (Current outstanding is NIL) ('Term loan I') and Rs. 4,350 lakhs ('Term loan II') (Current outstanding is Rs.485 lakhs).
- Term loan I had a tenure of 36 months and was repayable in 18 monthly instalments commencing from the 19th month from the date of loan, viz., November 4, 2011. The loan was secured by a first ranking exclusive equitable mortgage in respect of project properties relating to sub-stations in Gujarat. Further, the loan was guaranteed by corporate guarantee from NSL Power Equipment Trading Private Limited, the holding Company. The outstanding Term loan was fully repaid during the current period.
- Term loan II is repayable in 15 equal quarterly instalments commencing from the completion of one year from the date of first drawdown of the facility, viz., March 19, 2012. The loan is secured by a first ranking exclusive equitable mortgage in respect of land and building related to the TADA factory on a pari passu basis and exclusive equitable mortgage in respect of project properties relating to the sub-stations in Gujarat, as specified above.
iii) Foreign currency loan is repayable in 16 equal quarterly instalments commencing at the end of 15 months from the date of first drawdown, viz, March 29, 2012. The loan is
1. Standalone Financial Statements
2.
Annual Report 2016 49


Financial Statements
Notes to financial statements Continued as at and for the period ended March 31, 2016
(All amounts are in Rupees Lakhs unless otherwise stated )
secured against moveable fixed assets located at Udaipur unit at Rajasthan and mortgaged by deposit of title deeds over immoveable fixed assets at Udaipur unit at Rajasthan on pari passu basis. The Company has also taken a principal only swap to cover its exposure on the long term foreign currency loan taken of USD 100 lakhs at a fixed rate of Rs. 50.95 per USD. The Company incurs a cost of 8% per annum on such swap.
6. Deferred tax liabilities (net)
Tax effect of items constituting deferred tax liabilities
On difference between book balance and tax balance of fixed assets
Others - Licence fee payment
Gross deferred tax liabilities (4,701.84)
Tax effect of items constituting deferred tax assets
Effect of billing in excess of revenue 2,972.46 On disallowances under Income Tax Act, 1961 626.33 Gross deferred tax assets 3,598.79 Net of deferred tax liabilities (1,103.05) Deferred tax asset arising on account of unabsorbed depreciation (restricted to) -
(1,103.05)
The carry forward unabsorbed depreciation loss has given rise to net deferred tax asset. In the absence of evidence to prove virtual certainty as required in Accounting Standard 22, deferred tax asset as on 31 March 2016 has been restricted to the extent of net deferred tax liability arising out of other timing differences and the balance DTA (Rs. 739.28 lakhs) has not been recognized in these financial statements as per accounting policy followed by the Company.
iv) Finance lease obligation is secured by way of exclusive hypothecation on the respective vehicles.
The above term loans, external commercial borrowings and finance lease obligation carry varying rates of interest with the maximum rate of interest going from 12% upto 15% p.a. as at March 31, 2016 (previous period - from 12% upto 15% p.a.)
As at September 30, 2014
As at March 31, 2016
(3,739.55)
-
(3,739.55)
1,276.24
1,724.03
3,000.27
(739.28)
739.28
-
(3,744.70) (957.14)
7. Other long-term liabilities
Billing in excess of revenue
Advance from Customers
Payable to Regen Renewable Energy Generation Global Limited ("RREGGL")
8. Long-term provisions
Provision for performance guarantee (refer note 34A)
Provision for operation, maintenance and warranty (refer note 34A) Provision for taxes (net of advance taxes and tax deducted at source - current
period-Rs. 7,621.55 lakhs )
9. Short-term borrowings
Secured
Cash credit from banks
Short term loans from banks Short term loans from Others
Unsecured
Acceptances
7,571.24
-
- 7,571.24
-
479.84
- 479.84
30,442.31 6,968.67 2,777.78
14,632.70
54,821.46
2,663.97
7,881.52
3,551.31
14,096.80
710.70
810.28
5,531.93
7,052.91
31,029.66
1,950.00
-
44,409.97
77,389.63
50
Regen Powertech Private Limited