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Notes
to the Standalone Financial Statements for the year ended 31 March 2022
b) Impairment of Investment in Subsidiaries
The provision for impairment/ (reversal of impairment) of investments in subsidiaries is made based on the difference between the carrying amounts and the recoverable amounts. The recoverable amount of the investments in subsidiaries has been computed by external independent valuation experts based on value in use calculation for the underlying projects (based on discounted cash flow model). On a periodic basis, according to the recoverable amounts of individual portfolio assets computed by the valuation experts, the Trust tests impairment on the amounts invested in the respective subsidiary companies.
c) Provisions and contingencies
The assessments undertaken in recognizing provisions and contingencies have been made in accordance with Ind AS 37 “Provisions, Contingent Liabilities and Contingent Assets”. The evaluation of the likelihood of the contingent events has required best judgment by management regarding the probability of exposure to potential loss. Should circumstances change following unforeseeable developments, this likelihood could alter.
d) Income Taxes:
Significant estimates are involved in determining the provision for current and deferred tax, including amount expected to be paid/recovered for uncertain tax positions.
24. FAIR VALUE MEASUREMENTS
The management has assessed that the financial assets and financial liabilities as at year end are reasonable approximations of their fair values.
The Trust is required to present the statement of total assets at fair value and statement of total returns at fair value as per SEBI Circular No. CIR/IMD/DF/114/2016 dated 20 October 2016 as a part of these financial statements- Refer Statement of Net Assets at Fair Value and Statement of Total Returns at Fair Value.
The inputs to the valuation models for computation of fair value of assets for the above mentioned statements are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as WACC, Tax rates, Inflation rates, etc.
The significant unobservable inputs used in the fair value measurement required for disclosures categorised within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at 31 March 2022 are as shown below:
Significant unobservable input
WACC
Input for
31 March 2022
7.70% to 8.00%
Sensitivity
of input to the fair value
+0.50% -0.50%
₹ In million
Increase/ (Decrease) in fair value
4,114.31 (3,687.89)
Quantitative disclosures fair value measurement hierarchy for assets as at 31 March 2022:
Particulars
Date of valuation
Level 1
Level 2
Level 3
₹ in million
Total
Assets for
which fair
values are
disclosed:
Investment in
subsidiaries
(Including loan
to subsidiaries) 31 March 2022 -
-
94,923.85 94,923.85
25.
(A)
RELATED PARTY DISCLOSURES
Disclosure as per Ind AS 24 - “Related Party Disclosures”
(i) Subsidiaries
Name of entity
POWERGRID Vizag Transmission Limited
POWERGRID Kala Amb Transmission Limited
POWERGRID Parli Transmission Limited
POWERGRID Warora Transmission Limited
POWERGRID Jabalpur Transmission Limited
*26% stake acquired on 31 March 2022.
Place of business/ country of incorporation
India
India
India
India
India
Proportion of Ownership Interest as at 31 March 2022
100%*
74%
74%
74%
74%
86 Annual Report 2021-22