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Notes
to the Standalone Financial Statements for the year ended 31 March 2022
and undertook to sell the balance 26% equity stake of PJTL to the Trust.
No external financing has been obtained for the above acquisition and the transaction was funded by issue of units of the Trust to POWERGRID.
No fees or commission were received/to be received by any associate of the related party in relation to the transaction.
Acquisition of balance 26% equity stake in POWERGRID Vizag Transmission Limited (PVTL): Pursuant to the share purchase agreements dated 22 April 2021 (“SPA”) (and amendments thereof) executed among Power Grid Corporation of India Limited, IDBI Trusteeship Services Limited, POWERGRID Unchahar Transmission Limited, and POWERGRID VizagTransmission Limited, the balance 26% equity stake was acquired.
The above acquisition was financed through Rupee Term Loan from HDFC Bank Limited. Interest rate on term loan is 3 months T-Bill rate plus spread of 194 basis points.
No fees or commission were received/to be received by any associate of the related party in relation to the transaction.
28. CAPITAL AND OTHER COMMITMENTS
The Trust has entered into separate Share Purchase agreements with POWERGRID for acquisition of balance 26% equity stake in each of the subsidiary i.e. PKATL, PPTL, PWTL and PJTL.
Other commitments related to services to be rendered / procurements made in the normal course of business are not disclosed to avoid excessive details.
29. SEGMENT REPORTING
The Trust’s activities comprise of owning and investing in transmission SPVs to generate cash flows for distribution to unitholders. Based on the guiding principles given in Ind AS - 108 “Operating Segments”, this activity falls within a single operating segment and accordingly the disclosures of Ind AS -108 have not separately been given.
30. FINANCIAL RISK MANAGEMENT
The Trust’s principal financial liabilities comprises of borrowings denominated in Indian rupees, trade payables and other financial liabilities. The main purpose of these financial liabilities is to finance the Trust’s investments and operations.
The Trust’s principal financial assets include investments, loans, cash and cash equivalents and other financial assets that are generated from its operations.
The Trust’s activities expose it to the following financial risks, namely,
(A) Credit risk
(B) Liquidity risk
(C) Market risk
The Investment Manager oversees the management of these risks.
This note presents information regarding the Trust’s exposure, objectives and processes for measuring and managing these risks.
The management of financial risks by the Trust is summarized below: -
(A) Credit Risk
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 Trust is exposed to credit risk from its investing activities including loans to subsidiaries, deposits with banks and other financial instruments. As at 31
26.
INVESTMENT MANAGER FEES
Pursuant to the Investment Management Agreement dated 18 December 2020, Investment Manager fees is aggregate of
a. ₹ 72,500,000 per annum, in relation to the initial SPVs; and
b. 0.10% of the aggregate Gross Block of all Holding Companies and SPVs acquired by the InvIT after the execution of this agreement.
Further, the management fee set out above shall be subject to escalation on an annual basis at the rate of 6.75% of the management fee for the previous year. Any applicable taxes, cess or charges, as the case may be, shall be in addition to the management fee.
During the period, Trust has not acquired any assets other than initial SPVs.
Investment Manager Fees during the year includes ₹ 24.38 million for the period from 18 December 2020 to 31 March 2021.
CONTINGENT LIABILITY
The Trust has no contingent liability to be reported
27.
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Annual Report 2021-22