UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Date of event requiring this shell company report
Commission File No.:
(Exact name of registrant as specified in its charter)
Not applicable |
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(Translation of registrant’s name into English) |
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(Jurisdiction of incorporation or organization) |
(Address of Principal Executive Offices)
Telephone: (+
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class |
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Name of each exchange on which registered |
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Securities registered or to be registered pursuant to Section 12(g) of the Act.
None |
(Title of Class) |
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None |
(Title of Class) |
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
As of March 31,
One Class B Ordinary Share represents the number of votes from time to time equal to the number of Class A Ordinary Shares that would have been issued to the Founder Investors and their affiliates if the Founder Investors and their affiliates had exchanged the ReNew India Ordinary Shares that they held at such time for Class A Ordinary Shares at the exchange ratio of 1 to 0.8289 specified in the Business Combination Agreement (as proportionally adjusted for any share dividends, share combinations or consolidations, share splits, bonus issues or merger, consolidation or other reorganization or recapitalization effected with respect to Company’s ordinary shares or ReNew India Ordinary Shares after the Closing). As of March 31, 2024, the Class B Ordinary Shares accordingly represented 11,437,725 votes. During the year ended March 31, 2024, the Company acquired 2,553,897 ReNew India Ordinary Shares from the Founder pursuant to the Founder’s partial exercise of the Founder Investor De-Minimis Put Option, as defined in Item 7.B hereof, as a result of which the voting rights attaching to the Class B Ordinary Share were reduced by 2,116,955 votes from 13,554,680 to 11,437,725 votes.
One Class D Ordinary Share represents the number of votes from time to time equal to the number of Class A Ordinary Shares that would have been issued to CPP Investments and its affiliates if CPP Investments and its affiliates had exchanged the ReNew India Ordinary Shares that they held at such time for Class A Ordinary Shares at the exchange ratio of 1 to 0.8289 specified in the Business Combination Agreement (as proportionally adjusted for any share dividends, share combinations or consolidations, share splits, bonus issues or merger, consolidation or other reorganization or recapitalization effected with respect to Company’s ordinary shares or ReNew India Ordinary Shares after the Closing). As at March 31, 2024, the Class D Ordinary Share accordingly represented 12,345,678 votes.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act of 1934.
Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company.
Large accelerated filer |
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Non-accelerated filer |
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Emerging Growth Company |
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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP |
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Other |
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If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company.
Yes ☐ No
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes ☐ No ☐
TABLE OF CONTENTS
ITEM 1. |
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7 |
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ITEM 2. |
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7 |
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ITEM 3. |
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7 |
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ITEM 4. |
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39 |
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ITEM 4A. |
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81 |
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ITEM 5. |
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82 |
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ITEM 6. |
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101 |
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ITEM 7. |
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123 |
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ITEM 8. |
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133 |
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ITEM 9. |
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139 |
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ITEM 10. |
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140 |
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ITEM 11. |
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174 |
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ITEM 12. |
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174 |
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ITEM 13. |
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175 |
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ITEM 14. |
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MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
175 |
ITEM 15. |
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175 |
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ITEM 16A |
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177 |
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ITEM 16B |
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177 |
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ITEM 16C |
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177 |
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ITEM 16D |
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178 |
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ITEM 16E |
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PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
178 |
ITEM 16F |
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179 |
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ITEM 16G |
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179 |
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ITEM 16H |
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180 |
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ITEM 16I |
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DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
180 |
ITEM 16J |
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180 |
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ITEM 16K |
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180 |
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ITEM 17. |
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182 |
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ITEM 18. |
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182 |
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ITEM 19. |
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183 |
DEFINED TERMS
Unless the context otherwise requires, references in this Annual Report on Form 20-F (including information incorporated by reference herein, the “Report”) to:
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Certain amounts that appear in this Report may not sum due to rounding.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Report includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results of operations or financial condition and therefore are, or may be deemed to be, “forward looking statements.” These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology. They appear in a number of places throughout this Report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, the business of the Group. Such forward-looking statements are based on available current market material and management’s expectations, beliefs and forecasts concerning future events impacting us. Factors that may impact such forward-looking statements include:
The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond either our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialise, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. New risks and uncertainties come up from time to time, and it is impossible for us to predict these events or how they may affect us. We will not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. In light of these risks and uncertainties, you should keep in mind that any event described in a forward- looking statement made in this Report or elsewhere might not occur.
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PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3. KEY INFORMATION
Not applicable.
Not applicable.
Summary of Risk Factors
Our business is subject to a number of risks and uncertainties, including but not limited to those described in this Item 3.D. If any of those risks are realised, our business, financial condition and results of operations could be materially and adversely affected. Set forth below is a summary list of the key risks to our business:
Risks Relating to the Group’s Business
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Risks Relating to the Company’s Securities
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Risks Relating to the Group’s Business
We face risks and uncertainties when developing our projects.
The development and construction of our projects (including wind, solar, hydro, transmission, manufacturing, etc.) involve numerous risks and uncertainties and require extensive research, planning and due diligence. Before we determine that a project is economically, technologically or otherwise feasible, we may be required to incur significant capital expenditure for land and interconnection rights, regulatory approvals, preliminary engineering, equipment procurement, legal and other matters. Success in developing a project depends on many factors, including:
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Generally, our PPAs require that we bring our projects to commercial operation by a certain date. There may be delays or unexpected difficulties in completing our projects as a result of these or other factors. We may also have to reduce the size of some of our projects due to occurrence of any of these factors. If we experience such problems, our business, financial condition, results of operations and prospects could be materially and adversely affected. Further, the majority of our PPAs provide for a reduction of tariff if we fail to commission a project by the scheduled commission date. For example, there have been delays in the commissioning of certain projects in Karnataka. If we are unable to adhere to project timelines for reasons other than as specifically contemplated in the PPAs, it could result in the reduction in tariffs, or other damages, including paying liquidated damages for delay in commissioning of projects or granting the off-taker the right to draw on performance bank guarantees provided by us, including in certain cases up to 100% of the bank guarantee, or the termination of the PPAs. Further, we may also be subject to penalties in respect of failure to ensure transmission of electricity from the project to the grid and the respective off-taker, as agreed under the respective PPA and/or transmission agreements.
If environmental conditions at our energy projects are unfavourable, our electricity production, and therefore our revenue from operations may be substantially below expectations.
The revenue generated by our projects is proportional to the amount of electricity generated by those projects, which in turn is dependent on prevailing environmental conditions that impact those projects. In the year ended March 31, 2024, revenue generated from our wind power and solar power projects accounted for 50% and 41% of our total revenue. Operating results for wind, solar and hydro energy projects vary significantly depending on natural variations from season to season and from year to year and may also change permanently because of climate change or other factors. In some periods, the wind, solar or hydro conditions may fall within our long-term estimates but not within the averages expected for such a period, while in some periods, the wind, solar or hydro conditions may also fall outside our long-term estimates. In addition, the amount of electricity our projects produce is dependent in part on the amount of sunlight or radiation (in the case of solar power projects), on hydrological conditions (in the case of hydro power projects) and on actual wind conditions, including wind speed (in the case of wind power projects).
Wind energy is highly dependent on weather conditions and in particular on wind conditions, which can be highly variable, particularly during the monsoon season in India which generally lasts from May to September. The profitability of a wind energy project depends not only on observed wind conditions at the site, which are inherently variable, but also on whether observed wind conditions are consistent with assumptions made during the project development phase. Actual wind conditions at these sites, however, may not conform to the measured data in these studies and may be affected by variations in weather patterns, including any potential impact of climate change. For example, wind resource availability in recent years has generally been lower than projected, which has lowered the plant load factors and energy generation at several of our projects. In addition, climatic conditions may be adversely affected by nearby objects (such as buildings, other large-scale structures or wind turbines) developed later by third parties. Therefore, the electricity generated by our wind energy projects may not meet our anticipated production levels. If the wind resources at a particular site are below the levels we expect including in terms of quality, our rate of return for that project would be below our expectations.
We base our investment decisions with respect to each solar energy project on the findings of related solar studies conducted on -site prior to construction. However, actual climatic conditions at a project site may not conform to the findings of these studies. Unfavourable weather and atmospheric conditions could impair the effectiveness of our projects or reduce their output to levels below their rated capacity Reduced availability groundwater as an impact of climate change could increase costs. Water scarcity could impact the health and productivity of ReNew’s workforce. Furthermore, components of our generation and transmission systems could be damaged by severe weather conditions, such as hailstorms, tornadoes or lightning strikes or levels of pollution, dust and humidity. The operational performance of a particular solar energy project also depends on the contour of the land on which the project is situated. In case of highly variable contour land, the output of the solar farm situated on such a surface may be sub-optimal. Our solar power projects are also affected by the monsoon season, which generally lasts from May through September.
Our hydroelectric power generating projects will be dependent upon hydrological conditions prevailing from time to time in the broad geographic regions in which our plants are / will be located. There can be no certainty that the water flows at our existing and future sites will be consistent with our expectations, or that climatic and environmental conditions will not change significantly from the prevailing conditions at the time our projections were made. Water flows vary each year, and depend on factors such as rainfall, snowfall, rate of snowmelt and seasonal changes. Our existing and future hydropower plants may be subject to substantial variations in climatic and hydrological conditions which may reduce water flow and thus our ability to generate electricity. While we plan to select hydropower plants for bidding on the basis of their projected outputs, the actual water flow required to produce those outputs may not exist or be sustained. If hydrological conditions result in droughts or other conditions that adversely affect our existing or proposed hydroelectric generation business, our results of operations or cash flows could be materially and adversely affected.
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A sustained adverse change in environmental and other conditions at our wind, solar or hydro energy projects could materially and adversely decrease the volume of electricity generated and could also impact market demand for wind, solar and hydro projects. As a consequence, our business, financial condition, results of operations, cash flows and prospects may be materially and adversely affected.
There are a limited number of purchasers of utility-scale quantities of electricity, which exposes us and our energy projects to risks.
We generated 63% of our total income from PPAs with central and state government-utility companies in the year ended March 31, 2024, while the remaining 37% of our total income is primarily attributable to transmission sales, open market sales, sales to commercial and industrial businesses, financial income and other income. Further, we have one customer that is a state distribution company which accounted for over 10% of our total income in the year ended March 31, 2024. Since distribution of electricity is controlled by central and state government-utility companies in India, there is a concentrated pool of potential purchasers for grid connected, utility-scale electricity generated by solar, wind and hydro energy projects. Such concentration may increase our exposure to the credit risk of a limited number of customers. If any of these utilities or power purchasers become unable or unwilling to fulfil their contractual obligations under the relevant PPA or refuses to accept power delivered under the PPAs or otherwise terminates such agreements prior to the expiration thereof, our assets, liabilities, business, financial condition, results of operations and cash flows could be materially and adversely affected. Furthermore, if the financial condition of these utilities or power purchasers deteriorates or other government policies to which they are currently subject to change, demand for electricity produced by our utility-scale wind, solar and hydro projects could be adversely impacted.
The majority of our revenue is exposed to fixed tariffs, changes in tariff regulation and structuring.
A substantial portion of our income is derived from the sale of electricity based on the tariffs specified in the PPAs, which are mostly determined through the competitive bidding process. Tariffs for our commercial and industrial customers are based on bilateral negotiations. Tariff rates for our PPAs for utility-scale wind energy projects, utility-scale solar energy projects and our utility-scale firm power projects are determined under a feed -in tariff mechanism, or “FiT,” or a bidding regime or are bilaterally agreed with third- party off-takers. The majority of our PPAs provide for fixed tariff rates. Under a few PPAs, the tariff is subject to escalation provisions. As a result, thereof, any reductions in tariffs may adversely affect our financial condition.
The term of our PPAs with central government agencies and state electricity distribution companies is generally 25 years from the date commercial operations commence for each of our projects. The terms of our PPAs with commercial and industrial customers range from three to 25 years. Further, we have three agreements in the transmission business with the Government of India (“GoI”) for a term of 35 years each. Under our long-term PPAs, we typically sell power generated from our projects to state distribution companies at pre-determined, fixed tariffs. Accordingly, if there is an industry-wide increase in tariffs or if we seek an extension of the term of the PPA, we may not be able to renegotiate the terms of the PPA to take advantage of the increased tariffs. In addition, in the event of increased operational costs, we may also not have the ability to reflect a corresponding increase in tariffs and pass through these costs to our off-takers. Therefore, the prices at which we supply power generally have little or no relationship with the costs incurred in generating power. While some of our PPAs provide for tariff increase due to “change in law,” any such increase in tariff requires regulatory approvals which can be time consuming and expensive. Further, the majority of our PPAs have a term of up to 25 years, which is less than the useful life of our power generating assets, which averages 30 years. In the event a PPA is not renewed, we may be unable to sell the power we generate on favourable terms or at all, which could negatively impact the amount revenue we derive from the underlying asset.
We may face difficulties in recovering the costs (whether by tariff increases or litigation) of such corrective measures from the respective state governments/authorities in a timely manner and may also face resistance from the regulators when we seek an increase in tariff rates. This may lead to disputes and impact our cash flows and results of operations.
The Company has various claims before electricity regulatory commissions, tribunals, and courts. These generally relate to PPAs where "change in law" events, such as the implementation of amendments to the Indian goods and services tax (“GST”) law, have led the Company to seek tariff adjustments for additional expenditures. In some cases, there are precedents supporting such claims. However, there is a risk that certain claims may be dismissed, reconciliation processes may fail, or other deficiencies may prevent the Company from obtaining the sought relief. This could impact the Company's cash flow, as these costs are either already incurred or will be incurred under various PPAs. While not a litigation matter involving the Company, the Appellate Tribunal for Electricity (“APTEL”) has allowed certain events as valid ground for “change in law" claims under a PPA. The judgment was challenged before the Supreme Court of India. Supreme Court has stayed the enforceability of APTEL’s order only with respect to limited portions of the original claim, specifically for carrying cost expenses incurred after the commercial operation date and Operation and Maintenance (“O&M”) expenses. A number of companies' favourable "change in law" claims are pending implementation. Recovery for those claims could be limited to carrying cost expenses incurred after the commercial operation date and O&M expenses, which are subject to the Supreme Court's decision. Unfavourable decisions may impact our profitability, revenue and cash flows.
Counterparties to our PPAs may not fulfil their obligations, which could result in a material adverse impact on our business, financial condition, results of operations and cashflows.
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We generated 63% of our total income from PPAs with central and state government-utility companies in the year ended March 31, 2024. Some of the off -takers may become subject to insolvency or liquidation proceedings during the term of our PPAs, and the credit support received from such off-takers may not be sufficient to cover our losses in the event of a failure to perform. In addition, external events, such as an economic downturn or failure to obtain regulatory approvals, could also impair the ability of some our off-takers to fulfil their obligations under the PPAs.
There may also be delays associated with collection of receivables from off-takers because of their financial condition. Government entities to which we sell power do not have international credit ratings that we can use to evaluate their credit condition. While we are entitled to charge interest for delayed payments, the delay in recovering the amounts, including interest, due under these PPAs could adversely affect our operational cash flows. As of March 31, 2024, we had gross trade receivables of Rs. 24,212 million, of which receivables from government owned or controlled entities accounted for Rs. 21,079 million.
Although the central and state governments in India have taken steps to improve the liquidity, financial condition and viability of state electricity distribution utility companies, there can be no certainty that these utility companies will have the resources to pay us on time or at all. Any failure to recover from these distribution companies could have an adverse impact on our financial condition, results of operations and cash flows.
Further, to the extent any of our off-takers are, or are controlled by, governmental entities, bringing actions against them to enforce their contractual obligations is often difficult. Our facilities may also be subject to legislative or other political action that may impair their contractual performance.
Our PPAs may be terminated upon the occurrence of certain events.
Our profitability is largely a function of our ability to manage our costs during the terms of the PPAs and operate our power projects at optimal levels. If we are unable to manage our costs effectively or operate our power projects at optimal levels, our business and results of operations may be adversely affected. Our PPAs typically allow an off-taker to terminate the agreement or demand penalties from us upon the occurrence of certain events, including but not limited to, the failure to comply with prescribed minimum shareholding requirements; complete project construction or connection to the transmission grid by a certain date; supply the minimum amount of power specified; comply with prescribed operation and maintenance requirements; obtain regulatory approvals and licences; comply with technical parameters set forth in grid codes and regulations; and comply with other material terms of the relevant PPA. Furthermore, most of our PPAs allow termination on a case-by-case basis in the event force majeure event(s) continue for an extended period of time. We have terminated certain projects on account of force majeure event(s), delay in allotment of land due to changes in government allotment policy(ies), which are pending adjudication before various courts/ judicial forums in India. For example, ReNew Solar Power Private Limited along with two of our subsidiaries, sought termination of their respective PPAs on account of force majeure and impossibility of performance. The Uttar Pradesh Electricity Regulatory Commission permitted termination of the PPAs without financial penalties. The counterparty SECI has filed an appeal against the order which is pending before the Appellate Tribunal for Electricity. Additionally, we may be required to terminate our PPAs on the grounds of force majeure and / or delay in tariff adoption. If a PPA is held to be terminated invalidly, we could be exposed to additional financial and legal liability, reputational damage, and we might not be able to enter into a new PPA on favourable terms or at all.
In a matter before CERC, one of our subsidiaries, has sought for extension of scheduled commercial operation date in the PPA on account of force majeure and change in law events. While established CERC precedents suggest a favourable outcome is likely, there remains a risk that the subsidiary could be liable for liquidated damages if the outcome of the petition is otherwise.
In instances of PPA termination where we are entitled to receive termination payments from a counterparty or distribution company due to such counterparty’s or distribution company’s material breach, there can be no certainty that such counterparty or distribution company will make such payments on time or at all. Further, it is unlikely that termination payments will be adequate to pay all the outstanding third-party debt that we have borrowed for the project.
Certain of our PPAs allow our off-takers to purchase a portion of the relevant project from us under certain circumstances. Some of the PPAs also entitle our lenders to appoint another party as the operator of our projects, under certain circumstances, such as the creation of security contravening the terms of the relevant PPAs, bankruptcy, insolvency or winding up proceedings against a power generator, or a change in control event without the lender’s consent. If any such third party is not appointed within the stipulated time, the PPAs may be terminated by the off-takers and we may be required to acquire the project on mutually agreed terms in the relevant PPAs. If we are unable to acquire the project, the lenders may enforce their mortgage rights under the respective credit agreements. If such buy-outs or step-ins occur and we are unable to locate and acquire suitable replacement projects on time or at all, our business, financial condition and results of operations may be materially and adversely affected.
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If the term of a PPA is less than the expected life of a project, this may expose us to the risk of being unable to sell the power generated after the term of the PPA or being required to sell power at less favourable tariffs and terms than stipulated under the original PPA for such project. Failure to re-enter into or renew PPAs in a timely manner and on terms that are acceptable to us could adversely affect our business, results of operations and cash flows. There could also be accounting consequences if we are unable to extend or replace expiring PPAs, including writing down the carrying value of assets at such power project.
Our in-house EPC operations expose us to certain risks.
We undertake EPC- related services for our solar, wind, transmission and manufacturing projects, which exposes us to certain risks that would ordinarily be borne by third parties. As a result, we are exposed to the following construction related risks, which if we had entered into a third-party EPC contract on fixed price would have insulated us:
Additionally, we are primarily responsible for all equipment and construction defects, potentially adding to the cost of construction of our projects. Although we generally obtain warranties from our equipment suppliers, we cannot assure that we will be successful with any warranty claims against all our suppliers. If our EPC programs and policies are insufficient and fail to ensure the smooth operation of our plants and development activities, we may incur additional costs in engaging third party service providers to undertake our EPC activities or experience significant delays or disruption of our operations. We also enter into solar and wind energy project contracts on a business-to-business basis under which we are responsible for designing, constructing, and installing and maintaining these projects. Any delay, default, malfunctioning or unsatisfactory performance by our in-house teams could result in significant losses, damage our reputation and expose us to claims which we may not be able to recover from any third party, and therefore, adversely affect our business, cash flows and results of operations. The construction projects are capital intensive, requires significant time and are subject to delays or cost overruns, which could require us to expend additional capital and adversely affect our business and operating results. Such potential events include shortages and late delivery of building materials and facility equipment, installation, commissioning and qualification of equipment, labour disputes, delays or failure in securing the necessary governmental approvals, building sites or land use rights, and other changes to plans necessitated by changes in market conditions. Such delays could adversely affect our business, cash flows and results of operations.
Operation and maintenance of renewable energy projects involve significant risks that could result in unplanned outages, reduced output, interconnection or termination issues, or other adverse consequences
There are risks associated with the operation of our projects including but are not limited to:
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These and other factors could have adverse consequences on our projects. Unanticipated capital expenditures associated with maintaining or repairing our projects would reduce profitability. In addition, due to supply chain disruptions, replacement and spare parts for solar panels, wind turbines and other key pieces of equipment may be difficult or costly to acquire or may be unavailable.
Any of the risks described above could significantly decrease or eliminate the revenues of a project, significantly increase a project’s operating costs, or give rise to damages or penalties as per the contract owed by us to an offtaker, another contractual counterparty, a governmental authority or another third party. Any of these events could have a material adverse effect on our business financial condition and results of operations.
We are subject to credit and performance risk from third-party suppliers and contractors.
We enter into contracts with third-party suppliers of equipment, materials and other goods and services for the development, construction and operation of our projects as well as for other business operations. Our major equipment is covered through vendor warranty ranging from two to three years for wind turbines, up to 30 years for solar modules and 5 years for inverters. While we maintain a diversified set of vendors, we remain subject to the risk that vendors will not perform their obligations. If our vendors do not perform their obligations, or if they deliver any components that have a manufacturing defect or do not comply with the specified quality standards and technical specifications, it may result in a material breach of the relevant supply agreement. While we may be able to make a claim against the applicable warranty to cover all or a portion of the expenses or losses associated with the defective product, such claims may not be sufficient to cover all of our expenses and losses resulting from the defect. In addition, our suppliers could cease operations and no longer honour their warranties, which would leave us to cover the expense and losses associated with the defective products. If our third- party providers are unable to perform their obligations, including due to bankruptcy, winding up or any injunction, we may incur additional costs in finding a replacement service provider in a timely manner and could experience significant delays in performing our related obligations.
Contractors and suppliers in our projects are generally subject to liquidated damages for failures to achieve timely completion or for performance shortfalls. Our O&M contractors may fail to plan their operational strategy for the complete lifecycle of a given project, which could potentially create problems such as an inability to service turbines or solar modules over the project lifecycle, or failure to maintain the required site infrastructure or adequate resources at project sites. If our O&M contractors fail to perform as required under O&M agreements, affected projects may experience decreased performance, reduced useful life or shutdowns, any of which may adversely affect our operational performance, financial condition and results of operations. Liquidated damages payable under third- party engineering, procurement and construction services (“EPC”) and O&M contracts are generally limited to a specified amount or a percentage of the contract price or the annual fees payable. As a result, the liquidated damages recovered from defaulting vendors may not be sufficient to cover our losses. Furthermore, in instances where our contractors or suppliers are involved in disputes, litigations, or regulatory issues, their ability to fulfil their contractual obligations to us may be compromised, leading to project delays, additional costs, and potential legal liabilities for us. We may also face the risk that our contractors may subcontract critical tasks to third parties who may not meet our standards or requirements, further increasing the risk of non-performance or substandard performance. In such events, our recourse against the primary contractor may be limited, and we may have to directly address the deficiencies of the subcontractors, leading to increased complexity and cost in executing our projects.
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Our business has grown rapidly since its inception, and it may not be able to sustain its rate of growth.
Given the size of our project portfolio has grown considerably since inception, we may not be able to grow at similar rates in the future. Although we intend to continue to expand our business significantly with a number of new projects in both existing and new geographies, we may not be able to sustain our historical growth rate for various reasons. Success in executing our growth strategy is contingent upon, among others:
Our existing operations, personnel and systems may not be adequate to support our growth and expansion plans and we may need to make additional investments in people, processes and systems to support our growth. As we grow, we also expect to encounter additional challenges in relation to project selection, construction management and capital commitment processes, as well as our project financing capabilities. These factors may restrict our ability to take advantage of market opportunities, execute our business strategies successfully, respond to competitive pressures and maintain our historical growth rates.
Restrictions on solar equipment imports, and other factors affecting the price or availability of solar equipment, may increase our business costs.
A substantial portion of our equipment, mainly solar cells, wafer and modules, are imported from China and certain other countries. Any restrictions or additional duties imposed by the governments of India or China, or of any other exporting countries could adversely affect our business, results of operations and prospects. For example, in March 2021, the GoI imposed customs duties on the import of solar modules and solar cells after March 31, 2022. As a result, we were subject to imposition of customs duties by government authorities for importing solar modules from China. There is no assurance that other such duties will not be levied in the future. Such duties could result in an increase in our input costs for our solar business, especially if the costs cannot be passed on to our off-takers, which could have a material adverse impact on our business, financial condition , cash flows and results of operations.
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The Ministry of New and Renewable Energy, GOI exempted projects commissioned by March 31, 2024, from procuring modules only from approved suppliers. Effective April 1, 2024, the Approved List of Models and Manufacturers requirement has been reinstated for government-sponsored or subsidised solar projects. These regulations may increase our input costs and affect project timelines, creating challenges for procuring imported photovoltaic modules due to domestic capacity constraints. Reliance on domestic modules may impact projects with tariffs based on lower imported module prices. Government measures to promote domestic manufacturing and reduce import dependence may lead to additional regulatory changes and compliance costs, potentially affecting our project economics and operational flexibility.
The Company through its subsidiaries had also secured registrations under the Project Import Regulations, 1986 for import of goods required for setting up certain solar power projects, including solar modules, at a lower rate of customs duty than otherwise applicable individually on such goods. The GoI has amended the Project Import Regulations, 1986 as well as the Customs Tariff Act, 1975 (by way of the Finance Act, 2023 notified with effect from April 1, 2023), resulting in the removal of such lower rate of customs duty for goods required for solar power projects. These amendments have been challenged before the High Court of Delhi, and a favourable interim order has been secured by the Company. If the court rules against us, we may face significant adverse financial implications due to the increased customs duties on our imports. The final decision on this matter is still pending. Further, measures addressing the use of forced labour in the global solar supply chain by the United States and other countries are disrupting global solar supply chains and may impact our operations. The Uyghur Forced Labor Prevention Act, in effect in the United States from June 21, 2022 creates a presumption that imports of any goods made either wholly or in part in Xinjiang have been produced with forced labour. That presumption is rebuttable if the U.S. Customs and Border Protection (“CBP”) determines, based on “clear and convincing evidence,” that the goods in question were not produced “wholly or in part by forced labour,” and submits a report to the U.S. Congress setting out its findings. Other jurisdictions have also been enacting similar legislation or are in the process of doing so.
Though we ask our vendors to represent that they abide by international labours norms and do not allow forced labour in their operational set-ups, we cannot determine with certainty whether all our suppliers comply with such norms. If they were found not to follow them, we might have to find alternative suppliers on short notice, resulting in construction delays, disruption and higher costs. While we have developed multiple supply sources in a number of countries, we could still be adversely affected by increased costs, negative publicity, or other materially adverse consequences to business. If we are not in compliance with these or other similar export restrictions or other similar laws and regulations that apply to our operations, we may be subject to civil or criminal penalties and other materially adverse consequences.
Delays in obtaining, or a failure to maintain, governmental approvals and permits required to construct and operate our projects may adversely affect such projects and our business.
The design, construction and operation of our projects are highly regulated, require various governmental approvals and permits, and may be subject to conditions that may be stipulated by relevant government authorities which vary from state to state. There can be no certainty that all permits required for a given project will be granted on time or at all. If we fail to obtain or renew such licences, approvals, registrations and permits in a timely manner, we may not be able to commence or continue operating our projects in accordance with our contracted schedules or at all, which could adversely affect our business and results of operations. An example of such delay is the approval required for “change in land use from agricultural to non-agricultural” in the state of Karnataka, India. Such approvals can take between six months to two years, which could impact our ability to meet the timelines under our PPAs. In such circumstances, we may have to begin the development of projects while the relevant approvals are pending. In another matter, an agreement with a distribution company was terminated due to delays caused by the unavailability of the transmission system, which was beyond our control. The distribution company has filed an appeal before APTEL, which is pending. Similarly, our 200 MW solar project with MSEDCL was terminated for the same reason, and MSEDCL has also filed an appeal before APTEL, and the same is currently pending. Additionally, delays in granting connectivity for the total contracted or LOA capacity have been challenged by an industry developer, and the matter is pending before the AP High Court. These matters, if decided adversely against us, may have a detrimental impact on our projects and business operations.
We have also received notices from regulatory authorities on our compliance with certain wind and solar generation regulations and the billing rates with respect to power consumption, and we have filed petitions with regulatory authorities regarding the billing methodology. There is no certainty that relevant government authorities will not take any action in the future which may expose us to penalties or have a material adverse impact on our operations and cash flows.
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We are also exposed to changes in the legal and regulatory environment, including taxes, tariffs, and data privacy laws, which could increase operating costs or result in litigation. Delays may persist due to government office backlogs and our projects may be hindered or terminated due to the government prohibiting different aspects of our operations.
Ongoing legislative and regulatory changes could further impose additional compliance burdens and uncertainties, affecting our long-term strategic planning and operational efficiency.
Implementing our growth strategy requires significant capital expenditure and will depend on our ability to maintain access to multiple funding sources on acceptable terms.
We require significant capital for the installation and development of our projects and to grow our business. We believe that we have benefitted from a well-balanced mix of equity, corporate debt and project financing that has contributed to the rapid growth of our business. We might not be able to continue financing or refinancing our projects with an effective combination of equity and debt as we have done in the past and the interest rates and the other terms of available financing might not remain attractive. We may also from time to time divest certain assets to monetise their value for our wider business. These plans are subject to various contingencies and uncertainties, and the performance of the relevant asset.
Any changes to our growth strategy could impair our ability to expand our project portfolio and growth into new business lines or territories. In addition, high interest rates could adversely affect our ability to secure financing on favourable terms and increase our cost of capital. Our ability to obtain external financing on favourable terms is subject to a number of uncertainties, including our financial condition, results of operations and cash flows; interest rates; our ability to comply with financial covenants in other financing arrangements; our credit rating and those of our project subsidiaries; the general conditions of the global equity and debt capital markets and the liquidity in the market. If we are unable to obtain financing on attractive terms or sustain the funding flexibility we have enjoyed in the past, our business, financial condition, results of operations and prospects may be materially and adversely affected.
The delay between making significant upfront investments in our wind, solar and hydro power projects and receiving revenue could materially and adversely affect our liquidity, business, results of operations and cash flows.
There are generally many months or even years between our initial bid in renewable energy auctions to build solar, wind and hydro energy projects and the date on which we begin to recognise revenue from the sale of electricity generated by such projects. Our initial investments include legal, accounting and other third-party fees, costs associated with project analysis and feasibility studies, payments for land rights, payments for interconnection and grid connectivity arrangements, government permits, engineering and procurement of solar panels, modules, balance of system costs or other payments, which may be non-refundable. As such, projects may not be fully monetised for 25 years from commencement of commercial operations given the typical length of the PPAs, but we bear the costs of our initial investment upfront. Furthermore, we have historically relied on our own equity contribution and debt to pay for costs and expenses incurred during project development. We typically recognise revenue from energy projects only when they are operational and we commence supply of power to off-takers. There may be long delays from the initial bid to projects becoming shovel- ready, due to the timing of auctions, permits and the grid connectivity process. The timing gap between our upfront investments and actual generation of revenue, or any added delay in between due to unforeseen events, could put strains on our liquidity and resources and materially and adversely affect our profitability, results of operations and cash flows.
If we cannot develop our projects and convert them into operational projects for any reason, our business will not grow and we may have significant write-offs and penalties.
We may be unable to meet our development targets because we may have difficulty in converting our under-construction projects into operational projects. Completing construction of the under-construction projects into operational projects as anticipated, or at all, involve numerous risks and uncertainties. From time to time, we have been constrained to either partially abandon projects on which we had started development work, or re-categorise projects to a less advanced stage than previously assigned to them.
Abandonment or re-categorization of our projects may make it difficult for us to achieve our capacity goals by target dates if at all. Substantial expenses may also be incurred in the construction and development of the projects. If such projects cannot be developed into operational projects, we may have to write-off such expenses, which could have a material adverse effect on our business, cash flows, financial condition and results of operations. We may also face significant transmission penalties if we are unable to execute our projects. In addition, those projects that begin commercial operations may not meet the return expectations due to schedule delays, cost overruns or revenue shortfalls or they may not generate the capacity that we anticipate or generate revenue in the originally anticipated time period or at all.
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Our ability to deliver electricity to various counterparties requires the availability of and access to interconnection facilities and transmission systems, and we are exposed to the extent and reliability of the Indian power grid and its dispatch regime.
Our ability to sell electricity is impacted by the availability of, and access to, relevant and adequate evacuation and transmission infrastructure required to deliver power to our contractual delivery point and the arrangements and facilities for interconnecting our generation projects to the transmission systems, which are owned and operated by third parties or state electricity boards. The operational failure of existing interconnection facilities or transmission facilities or the lack of adequate capacity of such interconnection or transmission facilities or evacuation infrastructure may adversely affect our ability to deliver electricity to our counterparties which may subject us to penalties under the PPAs.
India’s physical infrastructure, including its electricity grid, is less developed than that of many countries. As a result of grid constraints, such as grid congestion and restrictions on transmission capacity of the grid, the transmission and dispatch of the full output of our projects may be curtailed. We may have to stop producing electricity during periods when electricity cannot be transmitted for instance, when the transmission grid malfunctions. Further, in certain cases, the interconnection approval to the grid is granted on a temporary basis. If interconnection approvals are not regularised, it may result in lack of evacuation facilities being available for projects. This may affect our ability to supply the contracted amount of power to the off-taker which may result in penalties being imposed on us under the PPAs. Furthermore, if construction of power projects in India, particularly in the states and regions that we operate in, outpaces transmission capacity of power grids, we may not be in a position to transmit all of our potential electricity to the power grid and therefore are dependent on the availability of the grid infrastructure.
If transmission infrastructure does not already exist, is inadequate or is otherwise unavailable, we are responsible for establishing a connection with the grid interconnection ourselves. In such cases, we will be exposed to additional costs and risks associated with developing transmission lines and other related infrastructure, including the ability to obtain rights of way from landowners for the construction of transmission grids, which may delay or increase the cost of our projects.
Although the GoI has accorded renewable energy “must-run” status (which means that any renewable power that is generated must always be accepted by the grid), power producers and government entities are required to undertake planned generation and drawing of power in order to maintain the safety of the power grid. The GoI also imposes deviation charges for shortfall or excess in the generation of power in order to facilitate grid integration and stability of solar and wind power generating stations. In some cases, this may curtail our ability to transmit electricity into the power grid, which may adversely affect our financial condition and results of operations.
Technical problems may reduce energy production below our expectations.
Our generation assets, including transmission lines and facilities that we construct or own, may not continue to perform due to equipment failure, wear and tear, latent defects, design error or operator error, early obsolescence or force majeure events, among other things, which may lead to unexpected maintenance needs, unplanned outages or other operational issues and have a material adverse effect on our projects, business, financial condition and results of operations. In addition, spare parts for wind and solar turbines and key pieces of electrical equipment may be hard to acquire, or may have significant sourcing lead time. Specifically, for wind turbines, we utilise the proprietary technology of some of our vendors and any failure by that vendor in supplying the technology or providing periodic maintenance or upgrade in a timely basis could adversely impact our operations. Further, our sources for some significant spare parts and other equipment are located outside of India. If there is a shortage of critical spare parts or replacement solar modules, we could incur significant delays in returning our facilities to full operation. There also may be unforeseen expenses if vendors default on their warranty obligations.
Any mechanical failure or shutdown of equipment could result in us having to shut down the entire project. Such events could materially and adversely impact our generating capacity. If any shutdowns continue for extended periods, this may give rise to contractual penalties or liabilities, loss of off -takers and damage to our reputation. Although we are entitled to be compensated by manufacturers for certain equipment failures and defects in certain cases, these arrangements may not be enough to cover all losses suffered. While manufacturing defects are typically covered under the warranty agreements, we may have to bear the costs of repairing the equipment for any damages not foreseeably covered under our supply agreements. Our business, financial condition, results of operations and cash flows could be materially and adversely affected if we cannot recover the expense and losses associated with the faulty component from these warranty providers.
The growth of our business depends on developing and securing rights to sites suitable for the development of projects.
Our ability to realise our business and growth plans is dependent on our ability to develop and secure rights to sites suitable for the development of projects. Suitable sites are determined on the basis of cost, wind, solar and hydro resource levels, topography, grid connection infrastructure and other relevant factors, which may not be available in all areas. Further, wind, solar and hydro energy projects must be interconnected to the power grid in order to deliver electricity, which requires us to find suitable sites with adequate evacuation and transmission infrastructure, including right of way. Solar energy and transmission infrastructure projects also require sufficient contiguous
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land for development, which may be difficult to procure on suitable terms. Some locations used for evacuation and transmission facilities are not owned by us and are located on land owned by third parties. Land used for our projects is subject to other third-party rights such as rights of passage and rights to place cables and other equipment on the properties, which may interfere with our right to use the land and ultimately impair our operations.
If any of the above factors occur, our successful land procurement cannot be assured. Any failure by us to secure suitable sites may materially impact the development of a project and may also result in non-compliance with related conditions under project agreements. If this occurs across a number of our projects, our business and prospects could be materially and adversely affected.
We do not own all the land on which we operate.
Some of the land area we utilise or intend to utilise for our projects is leased and we may be subject to conditions under the lease agreements through which we acquire rights to use such land. Conditions under lease agreements typically include restrictions on leasehold interest or rights to use the land, continual operating requirements, and other obligations which include obtaining requisite approvals, payment of necessary statutory charges and giving preference to local workers for construction and maintenance. We are also exposed to the risk that these leases will not be extended or will be terminated by the relevant lessors. Some of our projects are located, or will be located, on revenue land that is owned by the state governments or on land acquired or to be acquired from private parties. The timeline for transfer of title in the land is dependent on the type of land on which the projects are, or will be, located, and the policies of the relevant state government in which such land is located. In the case of land acquired from private parties, which is agricultural land, the transfer of such land from agriculturalists to non -agriculturalists such as our Company and the use of such land for non-agricultural purposes may require an order from the relevant state land or revenue authority allowing such transfer or use. For revenue land, we obtain a lease from the relevant government authority. In certain cases, the land leased for the development of renewable energy projects is obtained on a sub-lease. Such land may be subject to disputes on account of right of way, encroachment and other related issues.
There is no certainty that the outstanding approvals would be received on time, or that lease or sub-lease deeds would be executed in a timely manner, such that the operation of the projects will continue unaffected. In certain cases, any delay in the construction or commissioning of a project may result in termination of the lease. Further, the terms of lease and sub-lease agreements may also not be co-terminus with the lifetime of the power projects, taken together with the period of time required for construction and commissioning of the project. Accordingly, we will have to obtain extensions of the terms of such leases and/or sub-leases for the remainder of the operational life of the project. In the event that the relevant lessor does not wish to renew the lease or sub-lease agreements, we may be forced to remove our equipment at the end of the lease and/or sub-leases and we may not be able to find an alternative location in the short term or at all and our business, results of operations, cash flows and financial condition could be adversely affected.
Further, some of the wind energy projects which we have acquired from OEMs are located on government revenue land leased to the OEM. In such cases, the OEM has typically sub-leased the land to us. If the original lease for such land is terminated due to any action or omission by the OEM (over which we have no control), we may lose our sub-leasehold rights as well. If any of the above factors occur, our successful land procurement cannot be assured. Any failure by us to secure suitable sites may materially impact the development of a project and may also result in non-compliance with related conditions under project agreements. If this occurs across a number of our projects, our business and prospects could be materially and adversely affected.
We may face difficulties as we expand our operations into new areas of business or geographies within renewable/ green energy generation in which we have limited or no prior operating experience.
Our capacity for continued growth depends in part on our ability to expand our operations into, and compete effectively in, new areas of business and geographies. We continue to explore entering into new business segments, such as green hydrogen through strategic partnerships with other entities. We have also entered in the business of building electricity transmission infrastructure, battery storage solutions, manufacturing of solar modules and trading of carbon credits. Additionally, we have established a power trading subsidiary to explore opportunities for earning revenue from the power exchange. Selling power on the energy exchange instead of selling power on predetermined rates under the long term PPAs, may result in fluctuations in our revenue as the price at which power is sold may vary and would depend on the demand and supply for energy in the short-term energy exchange market.
Each new line of business is subject to distinct competitive and operational dynamics. Operating in such different areas may also impact our ability to bid competitively and ensure power generation in accordance with the terms of the bid, or as the case may be, PPAs entered into with the customers, all of which may affect our results of operations, and key business metrics. It may be difficult for us to understand and accurately predict the impact of varying customer preferences and assess the financial impact of operating in new lines of businesses that we may enter into in the future. In addition, the market for each such new line of business may have unique regulatory dynamics of its own that are not common to other areas/lines of business that we already operate in. These include laws and regulations that can directly or indirectly affect our ability to set up and operate projects in such areas within renewable energy generation as well as analyse
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the costs associated with, among others, setting up new projects (including entering into arrangements with third parties with respect to EPC and/or operation and maintenance for such projects), insurance, support and monitoring such projects.
We are also exploring new geographies for our various businesses. During the past year we have entered into term sheets and framework agreements with various organizations regarding new technologies. Entry into new geographies may expose us to country specific regulatory, trade, taxation and geopolitical risks. While we believe these new businesses and geographies will increase our vertical integration and the range of addressable business opportunities, they may not be successful in the timeframe and manner we anticipate. If we invest substantial time and resources to expand our operations and are unable to manage these risks effectively, our business, financial condition, cash flows, reputation and results of operations could be adversely affected.
We may not be successful in pursuing strategic partnerships, acquisitions and capital recycling, and future partnerships and acquisitions may subject us to additional risks and not bring us anticipated benefits.
A principal component of our strategy is to expand our operations by growing our project portfolio through selective acquisitions of existing or committed projects, and capital recycling. We are continuing to explore joint venture, partnership and capital recycling opportunities with complementary and strategic businesses.
We may not be able to identify suitable strategic investment or joint venture or capital recycling opportunities at acceptable cost/price and on commercially reasonable terms, obtain the financing necessary to complete and support such investments or integrate such businesses or investments effectively. Further, this strategy may also subject us to uncertainties and risks, including acquisition and financing costs, potential ongoing and unforeseen or hidden liabilities, diversion of resources and cost of integrating acquired businesses. Successful integration of acquired projects will depend on our ability to effect any required changes in operations or personnel and may require capital expenditure. We could face difficulties in integrating the technology and employees of acquired businesses with our existing technology and organisation, and it could take substantial time and effort to integrate the business processes being used in the acquired businesses with our existing business processes. Any failure to successfully integrate the portfolio of projects may limit our ability to grow our business.
We may encounter difficulties in selling assets, finding investors for asset sale, or joint ventures or integrating the acquired projects in a timely and cost-effective manner, difficulties in cultural alignment, difficulties in establishing effective management information and financial control systems, and unforeseen legal, regulatory, contractual or other issues which may potentially impact growth and impact investor sentiments. In addition, we may not be able to complete the asset recycling envisaged in case the investor rescinds the contract, changes in regulatory framework or any other unforeseen events which may make the transaction unviable and may potentially impact our profitability, projections and cashflows.
While we evaluate acquisition opportunities based on our targeted return, operational scale and diversification criteria and on whether we consider these opportunities to be available at reasonable prices, acquisitions involve risks that could materially and adversely affect our business, including the failure of the new acquisitions or projects to achieve the expected investment results, adverse impact of purchase price adjustments, and the inability to achieve potential synergies in a profitable manner, risks associated with the diversion of our management’s attention from our existing business and risks associated with entering into any markets. In addition, liabilities may exist that we do not discover in our due diligence prior to the consummation of an acquisition, or circumstances may exist with respect to the entities or assets acquired that could lead to liabilities, litigation or reputational risk and unforeseen payments by us. In each case, we may not be entitled to sufficient, or any, recourse against the vendors or contractual counterparties to an acquisition agreement. The discovery of any material liabilities after an acquisition, as well as the failure of a new acquisition to perform according to expectations, could adversely affect our business, financial condition, cash flows and results of operations.
Additionally, changes in regulatory or market conditions post-acquisition could affect the anticipated benefits of the acquisition and require adjustments to our strategic plans. We may also face increased scrutiny from regulators or stakeholders as a result of acquiring new businesses, which could lead to additional compliance costs and potential delays in the integration process.
We face competition from conventional and other renewable energy producers.
Our primary competitors include domestic and foreign conventional and renewable energy project developers, independent power producers and utilities. We compete with renewable energy project developers in India on many factors including the success of other alternative energy generation technologies (such as fuel cells, nuclear and biomass), site selection, access to vendors, access to project land, efficiency and reliability in project development and operation and auction bid terms. The deregulation of the Indian power sector and increased private sector investment have intensified the competition we face. The Electricity Act, 2003 removed certain licensing requirements for power generation companies, provided for open access to transmission and distribution networks and also facilitated additional capacity generation through captive power projects, which are projects where captive power plants generate electricity for consumption by the project as opposed to relying on energy provided by the grid, or the power plant providing electricity to the grid. These reforms provide opportunities for increased private sector participation in power generation. Specifically, the open access reform enables
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private power generators to sell power directly to distribution companies and, ultimately, to the end consumers, enhancing the financial viability of private investment in power generation. Through the competitive bidding process, we compete for project based on many factors including pricing, technical and engineering expertise, financial conditions, including specified minimum net worth criteria, financing capabilities and track record. Submitting a competitive bid at a wind or solar power project auction requires extensive research, planning, due diligence and a willingness to operate with lower operating margins for sustained periods of time. If we miscalculate our tariff rates and incorrectly factor costs for construction, development, land acquisition and price of components (including due to increase in duties and other levies), the economics of our bid may be affected and the project may become economically unviable. Further, competition may force us bid for the lower tariffs which may impact our IRR levels. Coupled with an expected surplus in solar power capacity in India, such developments could lead to greater pricing pressures for energy producers in the future. We cannot assure you that we will be able to compete effectively, and our failure to do so could result in an adverse effect on our business, results of operations and cash flows.
Further, we compete with both conventional and renewable energy companies for the financing needed to develop and construct projects. We also compete for the limited pool of qualified engineers and personnel with requisite industry knowledge and experience, equipment supplies, permits and land to develop new projects. Our operational projects may compete on price if we sell electricity into power markets at wholesale market prices. We may also compete with other conventional energy (whose tariffs may be more competitive) and renewable energy generators when we bid on, negotiate or renegotiate a long-term PPA. Additionally, some state utilities may prefer entering into PPAs with conventional energy suppliers.
Any growth in the scale of our competitors may result in the establishment of advanced in-house engineering, EPC and O&M capabilities, which may offset any current advantage we may have over them. These competitors may also decide to enter into new business avenues such as round-the-clock projects and firm power projects which directly compete with our current position. Moreover, any merger of our suppliers or contractors with any of our competitors may limit our choices of suppliers or contractors and reduce our overall project execution capabilities.
Furthermore, technological progress in conventional forms of electricity generation or the discovery of large new deposits of conventional fuels could reduce the cost of electricity generated from those sources or make them more environmentally friendly. Demand for renewable energy may also be adversely impacted by public perceptions of the direct and indirect benefits of adopting renewable energy technology as compared against using conventional forms of electricity generation. As a result, demand for electricity from renewable energy sources may reduce rendering our projects uncompetitive which may affect our business, financial condition, cash flows and prospects.
Our operations have inherent safety risks and hazards that require continuous oversight.
Our results depend on our ability to identify and mitigate the risks and hazards inherent to operating in the power generation and transmission industry. We seek to minimise these operational risks by carefully installing and maintaining our equipment and conducting our operations in a safe and reliable manner. However, failure to manage these risks effectively could impair our ability to operate and result in unexpected incidents, including structural collapse, equipment failure, fire and industrial accidents including due to electrocution, working at height and handling heavy equipment. These and other hazards, including natural disasters, can cause or result in personal injury or death, damage to and destruction of property, plant and equipment and disruption or suspension of operations.
We are required to comply with anti-corruption laws and regulations of the United States government, United Kingdom and India. The implementation of compliance procedures and related controls may be time consuming and expensive and possibly not effective, and our past non-compliance or our future failure to comply, if any, may subject us to civil or criminal penalties and other remedial measures.
We are subject to a number of anti-corruption laws, including the Foreign Corrupt Practices Act or “FCPA” of the United States, the Bribery Act 2010, or “Bribery Act,” of the United Kingdom and the Prevention of Corruption Act, 1988 in India. The current and future jurisdictions in which we operate our business may have experienced governmental corruption to some degree, and, in certain circumstances, strict compliance with anti-bribery and anti-corruption laws may conflict with local customs and practices. Any failure to comply with anti-corruption laws applicable to us could result in fines, penalties, criminal sanctions on our officers, disgorgement of profits and prohibitions on doing business, which could harm our reputation and business, financial condition, results of operations and prospects. Any violations of these laws (including other U.S. laws and regulations as well as non-U.S. and local laws), regulations and procedures by our personnel, vendors and agents could expose us to administrative, civil or criminal penalties, fines or restrictions on activities and adversely affect our business, financial condition, cash flows and results of operations.
Further, any non-compliance in such acts and regulations may adversely affect our reputation and could cause some of our investors to sell their interests in our Company to be consistent with their internal investment policies or to avoid reputational damage, and some investors might forego the purchase of our equity shares, all of which may adversely impact the market prices of our Class A ordinary Shares and Warrants. Moreover, we may face increased scrutiny from regulators and stakeholders, which could lead to additional
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compliance costs and operational disruptions. The potential for reputational harm and financial penalties might also hinder our ability to secure new business opportunities and partnerships, affecting our growth prospects and competitive position.
Material weaknesses in our internal controls over financial reporting could materially and adversely affect our financial condition and results of operations and our ability to operate our business.
While we manage regulatory compliance by monitoring and evaluating our internal controls to ensure that we follow all relevant statutory and regulatory requirements, there can be no certainty that deficiencies in our internal controls and compliances will not arise, or that we will be able to implement, and continue to maintain, adequate measures to rectify or mitigate any such deficiencies in our internal controls, in a timely manner or at all. We are exposed to operational risks arising from inadequacy or failure of internal processes or systems. Our growth may outpace these internal controls resulting in exposure to various risks. In addition, we are exposed to risk associated with fraud or misconduct of our employees. While we incur significant accounting and auditing expenses and spend significant management time complying with the requirements to evaluate and test our internal controls, we may not be safeguarded against all fraud or misconduct by employees or outsiders, unauthorised transactions by employees and operational errors. Employee or executive misconduct could also involve the improper use or disclosure of confidential information or data breach or other illegal acts, which could result in regulatory sanctions and reputational or financial harm, including harm to our brand.
As discussed in Item 15 “Controls and Procedures,” in connection with our assessment of internal control over financial reporting for Fiscal 2023, we concluded that there were material weaknesses pertaining to: delayed performance of review controls and absence of adequate evidence with respect to operation of review controls, including those related to significant estimates and financial statement close process, such as control attributes, the precision levels applied, and completeness and accuracy of data and reports used; and inadequate segregation of duties for recording and review of manual journal entries. These deficiencies were successfully remediated during the year ended March 31, 2024. Although we have instituted remedial measures to address the material weakness identified and continually review and evaluate our internal control systems to allow management to report on the sufficiency of our internal controls, we cannot assure you that we will not discover additional weaknesses in our internal controls over financial reporting. Further, the Company’s management continually improves, simplifies and rationalises the Company’s internal control framework where possible. However, any additional weaknesses or failure to adequately remediate the existing weakness could materially and adversely affect our financial condition or results of operations and/or our ability to accurately report our financial condition and results of operations in a timely and reliable manner.
The loss of any of our senior management or key employees may adversely affect our ability to conduct business and implement our strategy.
We depend on our management team and the loss of any key executives could adversely impact our business. We also depend on our ability to retain and motivate key employees and attract qualified new employees. Because the renewable energy industry is relatively new in India, there is a scarcity of skilled personnel with experience in the industry. If we lose a member of our management team or a key employee, we may not be able to replace him or her. Integrating new executives into our management team and training new employees with no prior experience in the renewable energy industry could prove disruptive to our operations, require a disproportionate number of resources and management attention which may ultimately prove unsuccessful. An inability to attract and retain sufficient technical and managerial personnel could limit our ability to effectively manage our operational projects and complete our under-development projects on schedule and within budget, which may adversely affect our business and strategy implementation.
The order of the Supreme Court of India directing a conversion of existing overhead transmission lines into underground transmission lines in certain environmentally protected areas might adversely impact the business and operation of certain Group entities.
A writ petition was filed in 2019 before the Supreme Court of India seeking the conservation of two critically endangered species of birds, the Great Indian Bustard and the Lesser Florican, majorly existing in the states of Rajasthan and Gujarat. The petitioner through an interim application sought directions to ensure predator proof fencing, barring installation of overhead powerlines, installation of solar infrastructure in priority and potential area as identified by the Wildlife Institute of India in the states of Rajasthan and Gujarat (“Designated Area”), and installation of divertors for certain powerlines (as listed in the application) for the conservation of these two species. The Supreme Court has directed that all low voltage overhead powerlines in the Designated Area shall be converted into underground powerlines. In relation to the conversion of the high voltage overhead powerlines in the Designated Area into underground powerlines, the Supreme Court specified a list of powerlines where the bird divertors shall be installed and a list of powerlines where an assessment shall be made by a committee with regards to the feasibility of their undergrounding.
By its order dated April 21, 2022, the Supreme Court directed the installation of bird diverters on overhead transmission lines in specified priority areas by July 20, 2022, and instructed the Central Electricity Authority to set quality standards for these bird diverters in consultation with an appointed committee. An application to modify these directions was filed by the Wind Independent Power Producers Association, and the Supreme Court adjusted its directive to place all transmission lines underground, allowing for modifications based on the relevant needs of the Great Indian Bustard. The Court appointed a new 9-member Expert Committee to assess the feasibility and extent
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of overhead and underground electric lines in the Priority Area. The Expert Committee must submit its report to the Supreme Court by July 31, 2024. The directive, as adjusted, narrows the requirement to place all transmission lines underground, meaning only certain portions will need to be underground based on the Expert Committee’s recommendations. The petition before the Supreme Court is still pending. For more details, refer to the section titled “Consolidated Statements and Other Financial Information — Legal Proceedings” under Item 8.A.
We have substantial indebtedness and are subject to restrictive and other covenants under our debt financing arrangements.
As of March 31, 2024, we had total borrowings (which consisted of long-term interest-bearing loans and borrowings including current maturities of long-term interest-bearing loans and borrowings and short-term interest- bearing loans and borrowings) of Rs. 647,316 million (including compulsorily convertible debentures of Rs. 18,536 million). We expect to continue to finance a significant portion of our project development costs with debt financing. Our ability to meet payment obligations under our outstanding debt depends on our ability to generate significant cash flow. This, to some extent, is subject to general economic, financial, competitive, legislative and regulatory factors as well as other factors that are beyond our control, such as, the general condition of global equity and debt capital markets, economic and political conditions and development of the renewable energy sector. If we are unable to generate sufficient cash flow to satisfy our debt obligations or other liquidity needs, we may have to undertake alternative financing plans, such as refinancing or restructuring our debt, selling assets, reducing or delaying capital investments or seeking to raise additional capital. There is no certainty that any refinancing or restructuring of debt would be possible, that any assets could be sold or, if sold, of the timing of the sales and the amount of proceeds that may be realised from those sales, or that additional financing could be obtained on acceptable terms, if at all. Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms may result in default on our debt obligations and make it more difficult for us to obtain financing in the future, which in turn would materially and adversely affect our financial condition and results of operations.
Our existing credit agreements contain a number of covenants that in certain cases could limit our ability and our subsidiaries’ ability to, among other things, effect changes in the control, management or capital structure of our company, change or amend the constitution or articles and memorandum of association, transfer or dispose of assets, pay dividends or make distributions, incur additional indebtedness, create liens, make investments, loans and acquisitions, engage in transactions with affiliates, merge or consolidate with other companies or sell substantially all of its assets. If we are unable to comply with the terms of our credit agreements, our lenders may choose to accelerate our obligations under our credit agreements and foreclose upon the collateral, or we may be forced to sell assets, restructure our indebtedness, or seek additional equity capital, which would dilute our shareholders’ interests. Failure to comply with any covenant could result in an event of default under the agreement and the lenders (or any subsequent lender) could make the entire debt immediately due and payable. In the past, however, in the rare instance when such covenants have been breached, no lender has called an event of default or exercised their rights to accelerate the repayment of debt.
Some of our subsidiaries previously have not been in compliance with certain financial ratios under their respective financing agreements. Moreover, some of our subsidiaries have not created security within specified timelines agreed with lenders in the relevant financing arrangements, typically due to reasons including delay in obtaining change in land use permissions from relevant authorities, which can be a time-consuming process in India. We have historically been able to cure these breaches, refinance the relevant facility or procure waivers or extensions in timelines from the relevant lenders. Further, certain similar breaches exist as of the date of this Report for which we have applied to the lenders for relevant waivers or extensions and relief from penalty interest provisions under the relevant facilities. To date none of our lenders have issued a notice of default or accelerated repayment on the basis of such breaches. There can be no assurance that lenders will not choose to enforce their rights or that we will be able to remedy these current breaches in the same manner as was done previously.
Impairment of our long-term assets may have an adverse impact on our results of operations and financial condition.
We recognised goodwill of Rs. 11,596 million as of March 31, 2024. Goodwill has an indefinite life under IFRS. This amount is allocated to our cash generating units or groups of cash generating units, which, if they contain goodwill, are tested at least annually for impairment or more frequently when there is an indication that the units may be impaired. If the recoverable amount of the cash generating unit is less than it 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 the statement of profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
We are subject to events and circumstances that can lead to an impairment loss, including macroeconomic industry and market conditions, significant adverse shifts in our operating environment or the manner in which an asset is used, pending litigation or other regulatory matters and current or forecasted reductions in operating income or cash flows associated with the use of an asset. Impairment loss can adversely impact our results of operations and financial condition.
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We are involved in various tax and legal proceedings that may cause us to incur significant fees, costs and expenses and may result in unfavourable outcomes.
We are involved in various tax and legal proceedings that involve claims for various amounts of money or how we conduct our business. Such proceedings could divert our management’s time and attention and consume financial resources. As of March 31, 2024, we had disputes with various tax authorities, including the commercial taxes departments of certain states, concerning, among other things, income tax and entry tax. We are also involved in certain disputes with off-takers, including in relation to the recovery of overdue payments from our off -takers and delay in setting up of projects and supply of electricity. Changes in regulations or tax policies, or adoption of differing interpretations of existing provisions, and enforcement thereof by governmental, taxation or judicial authorities in India relating to us may result in legal proceedings from time to time. We have ongoing disputes with certain of our off-takers in connection with claims for increased tariffs due to “change in law,” “force majeure events” and others. See the section titled “Consolidated Statements and Other Financial Information — Legal Proceedings” under Item 8.A.
Additionally, claims may be brought against or by us from time to time regarding, for example, defective or incomplete work, defective products, accidents or deaths, damage to or destruction of property, breach of warranty, late completion of work, delayed payments or regulatory non-compliance, and may subject us to litigation, arbitration and other legal proceedings, which may be expensive, lengthy, and occasionally disrupt normal business operations and require significant attention from our management.
The Company regularly receives notices from various authorities regarding its business operations. We carefully track these notices and generally respond in a timely manner. However, there is a risk that some notices may not be responded to in timely/adequate manner, due to various internal and external reasons. These reasons may include delayed receipt or receipt of notices at an incorrect office address or delay due to internal assessment and document collation to verify facts, strategise and adequately respond to such notices. This may result in adverse impact to the Company in the nature of fines, penalties, and / or sanctions.
Unfavourable outcomes or developments relating to these proceedings, could have a material adverse effect on our business, financial condition and results of operations. Moreover, legal proceedings, particularly those resulting in judgments or findings against us, may harm our reputation and competitiveness in the market. See the section titled “Consolidated Statements and Other Financial Information — Legal Proceedings” under Item 8.A.
If we incur an uninsured loss or a loss that significantly exceeds the limits of our insurance policies, the resulting costs may adversely affect our financial condition.
We, including our directors and officers may face contractual or civil liabilities or fines in the ordinary course of business as a result of damages suffered by PPA counterparties or third parties, which may require us to make indemnification or other damage payments under contract or otherwise in accordance with law, and our contracts may not have adequate limitations of liability for direct or indirect damage.
Our insurance coverage may not be sufficient to cover all losses and our insurance coverage is subject to deductibles, caps, exclusions and other limitations. Our policies may not be sufficient to cover our losses which may arise due to natural disasters, terrorist attacks, or changes in climate conditions, amongst other calamities. Further, due to rising insurance costs and changes in the insurance markets, there is no certainty that our insurance coverage will continue to be available at all or at rates or on terms similar to those presently available. A loss for which we are not fully insured or any losses not covered by insurance could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Changes in technology may render our technologies obsolete or require us to make substantial capital investments.
We attempt to maintain the latest international technology standards and the technology requirements for our business. However, the technology relevant to our business is continuously evolving. Some of our existing technologies and processes in the wind, solar including solar cell and module manufacturing, and hydro energy business may become obsolete or perform less efficiently compared to newer and better technologies and processes. Currently, many of our plants utilise older technologies, and while we are actively working on adapting and developing newer technologies, the transition is ongoing and may not be completed in the time frames or within the economic terms we have anticipated. Further, we may not be able to access newer technologies at competitive prices or at all, which may restrict us from participating in bids competitively.
The cost of upgrading to these new technologies and processes, along with the potential need to retrofit or replace existing systems, can be substantial. The cost of upgrading or implementing new technologies, upgrading our existing equipment, or expanding capacity could be significant and may adversely affect our results of operations if we are unable to pass on such costs to our off-takers. The development and implementation of such technology entail technical and business risks and significant costs of implementation. Failure to
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respond to technological changes effectively and timely may adversely affect our business, results of operations, hinder our ability to secure future projects, and adversely impact our long-term financial performance and growth prospects.
In addition, we may adopt new technologies such as peak power supply, round the clock supply and storage services for growth and cost effectiveness. We could face difficulties implementing and integrating new technologies, on account of substantial time and effort for adoption, stabilization and unbudgeted cost escalations. Any failure to successfully deploy new technologies may limit our ability to grow our business.
We may not be able to adequately protect our intellectual property rights, including the use of the “ReNew” name and the associated logo, which could harm our competitiveness.
We have obtained the trademark registration for the “ReNew” marks and logos under various classes in India and the United Kingdom. We have also applied for the “ReNew” marks and logos under various classes in the United States. These applications are in currently at different stages and may or may not fructify into successful registrations. We believe that the use of our name and logo is vital to our competitiveness and success and for us to attract and retain our customers and business partners. Any improper use or infringement by any party could adversely affect our business, financial condition and results of operations. Furthermore, some of our applications for the registration of trademarks under various classes have been refused in the past, and to the extent our current pending applications are refused, we may be unable to adequately protect our trademarks. There is no assurance that the measures we have taken will be sufficient to prevent any misappropriation of our intellectual property.
Enforcement of any intellectual property rights could be time consuming and costly. We may not be able to establish our rights to such intellectual property in the absence of relevant registrations and accordingly may not be able to take appropriate action or prevent the use of such name or logo by third parties. If the measures we take do not adequately safeguard our intellectual property rights, we could suffer losses due to competing offerings of services that exploit our name and logo. We may also be subject to claims for breach of intellectual property by third parties if we are unable to secure adequate protection in relation to our name and logo.
We have entered into a number of related party transactions and may continue to enter into related party transactions in the future.
In the ordinary course of our business, we enter into transactions with related parties. While we believe that all such transactions have been conducted on an arm’s length basis, there can be no assurance that we could not have achieved more favourable terms if such transactions had not been entered into with related parties. Furthermore, it is likely that we will continue to enter into related party transactions in the future. There can be no assurance that these or any future related party transactions that we may enter into, individually or in the aggregate, will not have an adverse effect on our business, financial condition and results of operations. Further, the transactions with our related parties may potentially involve conflicts of interest. Additionally, there can be no assurance that any dispute that may arise between us and related parties will be resolved in our favour.
Our results of operations and cash flows could be adversely affected by strikes, work stoppages or increased wage demands by our employees or any other kind of disputes with our employees.
As of March 31, 2024, we had 3,988 full-time employees. While we have not had any instances of strikes or lock -outs since we commenced operations, we may experience disruptions in our operations due to disputes or other problems with our workforce, and efforts by our employees to modify compensation and other terms of employment may divert management’s attention and increase operating expenses. From time to time, we also enter into contracts with independent contractors to complete specific assignments and these contractors are required to provide the labour necessary to complete such assignments. Although we do not engage these labourers directly, we may be held responsible for wage payments to labourers engaged by contractors should the contractor’s default on wage payments. The occurrence of such events could materially adversely affect our business, prospects, financial condition, cash flows and results of operations.
Fluctuations in foreign currency exchange rates may adversely affect our expenditures and could result in exchange losses.
The business activities of the Group are primarily carried out in Indian Rupees. However, some of our capital expenditures, particularly those for equipment and raw materials imported from international suppliers, such as solar module panels, and external borrowings are denominated in foreign currencies and some of our other obligations, including our external commercial borrowings, are also denominated in these currencies. Revenues from some of our new business such as carbon credit are denominated in foreign currency.
While we have hedged our external commercial borrowings and our costs denominated in foreign currency against currency fluctuations, changes in exchange rates may still adversely affect our results of operations and financial condition. Any amounts spent to hedge the risks to our business due to fluctuations in currencies may not adequately hedge against any losses we incur due to such fluctuations. There is no assurance that we will be able to reduce our foreign currency risk exposure, through the hedging transactions we have already entered into or will enter into, in an effective manner, at reasonable costs, or at all.
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Natural and catastrophic events and terrorist attacks may reduce energy production below our expectations.
A natural disaster, severe weather conditions or an accident that damages or otherwise adversely affects any of our operations could materially and adversely affect our business, financial condition and results of operations. Severe floods, lightning strikes, earthquakes, extreme wind conditions, severe storms, wildfires, adverse monsoons and other unfavourable weather conditions (including those from climate change) or natural disasters could damage our property and assets or require us to shut down plants or related equipment and facilities, impeding our ability to maintain and operate our projects and decreasing electricity production levels and revenues from operations. In addition, catastrophic events such as explosions, terrorist acts or other similar occurrences could result in similar consequences or in personal injury, loss of life, environmental danger or severe damage to or destruction of the projects or suspension of operations, in each case, adversely affecting our ability to maintain and operate the projects and decreasing electricity production levels and revenues from operations. Further, any social unrest or local law and order issues arising from our operational activities may lead to business disruption and reputational loss. Any of these events could adversely affect our business, financial condition, cash flows, results of operations and prospects.
In addition, India, the United States or other countries from where we import equipment may enter into armed conflict or war with other countries or extend pre-existing hostilities. South Asia has, from time to time, experienced instances of civil unrest and hostilities among neighbouring countries. Military activity or terrorist attacks or concerns regarding regional stability, could adversely affect the economy by, for instance, disrupting communications and supply chains. Such events could also create a perception that investments in companies involve a higher degree of risk. This, in turn, could adversely affect customer confidence in the economy on the markets for our solutions and on our business.
Further, global markets are currently operating in a period of economic uncertainty, volatility and disruption as the armed conflicts between Russia and Ukraine, and Israel and Palestine continue. Such armed conflict and the effect of the resulting economic sanctions imposed on these countries and certain citizens and enterprises thereof, as well as the potential responses to such sanctions or any further sanctions, could have an adverse effect on the global economy and are highly uncertain and difficult to predict. As a result, many entities outside the conflict region may be adversely affected by rising prices of commodities such as oil, gas and wheat, or by a potential slowdown in the global economy. The occurrence of large -scale business disruptions potentially give rise to liquidity issues for certain entities and there may also be consequential impacts on the credit quality of some suppliers. As of the date of this Report, while we are not directly involved in the region and, therefore, our exposure to these countries is limited, considering the uncertainties surrounding the impact of the conflict on global economy, we are unable to estimate the extent of any potential effects of the conflict or any escalation of the conflict on our business, results of operation, cash flows or financial condition.
Our business could be adversely affected by security threats, including cybersecurity threats and system failures.
As a renewable energy utility company, we face security threats, including cybersecurity threats to gain unauthorised access to sensitive information, to misappropriate financial assets or to render data or systems unusable; threats to the security of our facilities and infrastructure or third-party facilities and infrastructure, such as evacuation grids and interconnection facilities. The potential for such security threats has subjected our operations to increased risks that could have a material adverse effect on our business. In particular, our implementation of various procedures and controls to monitor and mitigate security threats and to increase security for information, facilities and infrastructure may result in increased capital and operating costs. Moreover, there can be no assurance that such procedures and controls will be sufficient to prevent security breaches from occurring. If any of these security breaches were to occur, they could lead to losses of financial assets, sensitive information, critical infrastructure or capabilities essential to our operations and could have a material adverse effect on our reputation, financial position, results of operations or cash flows.
Cybersecurity attacks in particular are becoming more sophisticated and include, but are not limited to, malicious software, attempts to gain unauthorised access to data and systems, and other electronic security breaches that could lead to disruptions in critical systems, unauthorised release of confidential or otherwise protected information, and corruption of data. Risk could arise from system defects, such as failures, faults, or incompleteness in computer operations, or illegal or unauthorised use of computer systems. For example, the recent Microsoft outage severely impacted business operations across different industries. These events could lead to financial losses, loss of business or potential liability and may even lead to our projects coming to a complete standstill.
Further, we depend on various external vendors for certain elements of our operations and are exposed to the risk that external vendors or service providers may be unable to fulfil their contractual obligations to us (or will be subject to the same risk of operational errors by their respective employees) and the risk that their (or their vendors) business continuity and data security systems prove to be inadequate. If our external vendors or service providers fail to perform any of these functions, it could materially and adversely affect our business, cash flows and results of operations.
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The solar industry may experience periods of structural imbalance between global PV module supply and demand that result in periods of pricing volatility. If our competitors reduce module pricing to levels near or below their manufacturing costs, or are able to operate at minimal or negative operating margins for sustained periods of time, or if global demand for PV modules decreases relative to installed production capacity, cash flows, our business, financial condition, and results of operations could be adversely affected.
In the aggregate, manufacturers of solar cells and modules have significant installed production capacity, relative to global demand, and the ability for additional capacity expansion. We believe the solar industry may from time-to-time experience periods of structural imbalance between supply and demand, and that excess capacity will continue to put pressure on pricing. There may be additional pressure on global demand and average selling prices in the future resulting from fluctuating demand in certain major solar markets, such as China. If our competitors reduce module pricing to levels near or below their manufacturing costs, or are able to operate at minimal or negative operating margins for sustained periods of time, or if global demand for PV modules decreases relative to installed production capacity, our business, financial condition, cash flows and results of operations could be adversely affected.
Problems with product quality or performance may cause us to incur significant and/or unexpected contractual damages and/or warranty and related expenses, damage our market reputation, and prevent us from maintaining or increasing our market share.
We perform a variety of module quality and life tests under different environmental conditions upon which we base our assessments of future module performance over the duration of the warranty. However, if our solar modules perform below expectations, we could experience significant warranty and related expenses, damage to our market reputation, and erosion of our market share. With respect to our modules, we provide a limited warranty covering defects in materials and workmanship under normal use and service conditions for up to 12 years. We also typically warrant those modules installed in accordance with agreed-upon specifications will produce at least 98% of their labelled power output rating during the first year, with the warranty coverage reducing by a degradation factor every year thereafter throughout the limited power output warranty period of up to 25 years to 30 years based on geography of the contract. Among other things, our solar module warranty also covers the resulting power output loss from cell cracking.
If any of the assumptions used in estimating our module warranties prove incorrect, we could be required to accrue additional expenses, which could adversely impact our financial position, operating results, and cash flows. Although we have taken significant precautions to avoid a manufacturing excursion from occurring, any manufacturing excursions, including any commitments made by us to take remediation actions in respect of affected modules beyond the stated remedies in our warranties, could adversely impact our reputation, financial position, operating results, and cash flows.
Our solar modules could suffer various failures, including breakage, delamination, corrosion, or performance degradation in excess of expectations, and our manufacturing operations or supply chain could be subject to materials or process variations that could cause affected modules to fail or underperform compared to our expectations. These risks could be amplified as we implement design and process changes in connection with our efforts to improve our products and accelerate module wattage as part of our long-term strategic plans. In addition, if we increase the number of installations in extreme climates, we may experience increased failure rates due to deployment into such field conditions. Any widespread product failures may damage our market reputation, cause our net sales to decline, require us to repair or replace the defective modules or provide financial remuneration, and result in us taking voluntary remedial measures beyond those required by our standard warranty terms to enhance customer satisfaction, which could have material adverse effect on our operating results and cash flows
The majority of our manufacturing equipment is sourced from China and Europe. If our manufacturing equipment fails or if our equipment suppliers fail to perform under their contracts, we could experience production disruptions and be unable to satisfy our contractual requirements.
The majority of our manufacturing equipment is sourced from China and Europe, is not readily available from multiple vendors and would be difficult to repair or replace if it were to become delayed, damaged, or stop working. If any piece of equipment fails, production along the entire production line could be interrupted. In addition, the failure of our equipment manufacturers to supply equipment in a timely manner or on commercially reasonable terms could delay our expansion or conversion plans, otherwise disrupt our production schedule, and/or increase our manufacturing costs, all of which would adversely impact our operating results and cash flows.
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Several of our key raw materials and components, and manufacturing equipment are either single-sourced or sourced from a limited number of suppliers, and their failure to perform could cause manufacturing delays, especially as we expand or seek to expand our business, and/or impair our ability to deliver solar modules to customers in the required quality and quantities and at a price that is profitable to us.
Our failure to obtain raw materials and components that meet our quality, quantity, and cost requirements in a timely manner could interrupt or impair our ability to manufacture our solar modules, or increase our manufacturing costs. Several of our key raw materials and components, and manufacturing equipment are either single-sourced or sourced from a limited number of suppliers. As a result, the failure of any of our suppliers to perform could disrupt our supply chain and adversely impact our operations. We may be unable to identify new suppliers or qualify their products for use on our production lines in a timely manner and / or on commercially reasonable terms. A constraint on our production may result in our inability to meet our capacity plans and/or our obligations under our customer contracts, which would have an adverse impact on our business. Additionally, reductions in our production volume may put pressure on suppliers, resulting in increased material and component costs.
Our failure to effectively manage module manufacturing production costs and selling costs, including costs related to raw materials which are majorly imported, and logistics services and exchange rate fluctuations, could render our solar modules uncompetitive and reduce our net sales, profitability, and/or market share.
Certain of our key raw material purchase contracts include variable pricing terms, which are driven by underlying indices for certain commodities, including aluminium, steel, and natural gas, among others. Fluctuations in such underlying commodity indices may increase our raw material costs. Additionally, an increase in price levels generally, such as inflation related to the cost of raw materials, key manufacturing equipment, labour, and logistics services and exchange rate fluctuations, could adversely impact our profitability.
A disruption in our supply chain for key raw materials, or equipment could interrupt or impair our ability to manufacture solar modules and could adversely impact our profitability and long-term growth prospects.
Our supply chain could be limited if any of our current or future suppliers fail to perform or are unable to acquire an adequate supply in a timely manner or at commercially reasonable prices. If our current or future suppliers cannot obtain sufficient raw materials or key equipment, they could substantially increase prices or be unable to perform under their contracts. Additionally, we may also be unable to effectively manage fluctuations in the availability and cost of logistics services associated with the procurement of raw materials or equipment used in our manufacturing process. If we are unable to pass such cost increases to our customers, a substantial increase in prices or any limitations or disruptions in our supply chain could adversely impact our profitability and long-term growth objectives.
Risks Relating to India
Our ability to acquire land may be subject to governmental policies.
The government may exercise rights of compulsory acquisition in respect of any land owned by us and compensation for such acquisition paid by the government to us may be inadequate. We are subject to the risk that governmental agencies in India may exercise rights of compulsory purchase of lands. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, or the “Land Acquisition Act” in India allows the central and state governments to exercise rights of compulsory purchase of land if such acquisition is for a “public purpose,” which, if used in respect of our land, could require us to relinquish land. Further, compensation paid for acquiring our land may not be adequate to compensate us for the loss of the property. The likelihood of such actions may increase as the central and state governments seek to acquire land for the development of infrastructure projects such as roads, airports and railways in India. Additionally, the provisions of the Land Acquisition Act cover various aspects related to the acquisition of land which may affect us, including provisions stipulating: (i) restrictions on acquisition of certain types of agricultural land; and (ii) compensation, rehabilitation and resettlement of affected people residing on such acquired land. Further, we may face difficulties in complying with the Land Acquisition Act as it is a relatively recent statute with limited case-law interpreting its provisions. Any action under the Land Acquisition Act in respect of any of our major current or proposed developments could adversely affect our business, financial condition, results of operations, cash flows or prospects.
Our ability to raise foreign capital may be constrained by Indian law.
We are subject to exchange controls (including Foreign Exchange Management Act, 1999) that regulate borrowing in foreign currencies. Such regulatory restrictions limit the Group’s financing sources and hence could constrain the Group’s ability to obtain financings on competitive terms and refinance existing indebtedness. There is no certainty that the required approvals will be granted to us without onerous conditions, or at all. Limitations on raising foreign debt may have an adverse impact on the Group’s business growth, financial condition, results of operations and cash flows.
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A substantial portion of our business and operations are located in India and we are subject to regulatory, economic, social and political uncertainties in India.
A substantial portion of our business and employees are located in India, and we intend to continue to develop and expand our business in India. Consequently, our financial performance will be affected by changes in exchange rates and controls, interest rates, changes in government policies, including taxation policies, social and civil unrest and other political, social and economic developments in or affecting India. An election or a new administration in India or in any of the states could result in uncertainty in the renewable energy market, which could harm our operations.
India has a mixed economy with a large public sector and an extensively regulated private sector. The GoI has exercised and continues to exercise significant influence over many aspects of the Indian economy. Since 1991, successive Indian governments have generally pursued policies of economic liberalization and financial sector reforms, including by significantly relaxing restrictions on the private sector. Nevertheless, the role of the Indian central and state governments in the Indian economy as producers, consumers and regulators has remained significant and there is no assurance that such liberalization policies will continue. The GoI in the past, among other things, imposed controls on the prices of a broad range of goods and services, restricted the ability of businesses to expand existing capacity and reduce the number of their employees, determined the allocation to businesses of raw materials and foreign exchange and reversed their policies of economic liberalization. The performance and growth of our business are necessarily dependent on economic conditions prevalent in India, which may be adversely affected by such developments. We may not be able to react to such changes promptly or in a cost-effective manner. Increased regulation or changes in existing regulations may require us to change our business policies and practices and may increase the cost of providing services to our customers which would have an adverse effect on our operations and our financial condition, cash flows and results of operations.
Our long-term growth is also dependent upon the targets set by the GoI for renewable energy. Any significant change in the government policy, a reduction in the targets set by the GoI for renewable energy or a failure to meet the GoI’s targeted installed capacity may result in a slowdown in our growth opportunities and adversely affect our ability to achieve our long-term business objectives, targets and goals. For example, as per the Electricity Act, the state distribution companies in India are required to procure minimum prescribed energy from renewable energy sources in the form of renewable purchase obligation. In the past, most of the states have been in non-compliance with the obligation to purchase such minimum amount of energy produced from renewable energy sources, on account of low penalties associated with such non-compliance. However, the revised RPO notification announced in 2023 which is enforceable under the Energy Conservation Act 2001 (EC), is expected to lead to significant penalties for non-compliance. Nevertheless, there may still be an adverse impact on our profitability if, despite the increase in penalties certain entities remain non-compliant.
The course of market interest rates continues to be uncertain due to high inflation, the increase in the fiscal deficit and the GoI’s borrowing program. Any continued or future inflation because of increases in prices of commodities such as crude oil or otherwise, may result in a tightening of monetary policy and could materially and adversely affect our business, financial condition, cash flows and results of operations. Any increase in interest rates or reduction in liquidity could adversely impact our business.
Our business is dependent on the regulatory and policy environment affecting the renewable energy sector in India.
The regulatory and policy environment in which we operate is evolving and subject to periodic change, and our business, results of operations, cash flows and prospects and financial performance could be adversely affected by any unfavourable changes in or interpretations of existing laws, or implementation of new laws. Uncertainty in the applicability, interpretation or implementation of any amendment to, or change in, governing law, regulation or policy in the jurisdictions in which we operate, including by reason of an absence, or a limited body, of administrative or judicial precedent may be time consuming as well as costly for us to resolve and may impact the viability of our business currently or in the future.
For example, under the General Network Access Regulations 2022, we have sought certain reliefs and appropriate directions from the Commissions, which are currently pending. Similarly, Company, through Wind Independent Power Producers Association (“WIPPA”) has challenged the levy of penalty under the Central Electricity Regulatory Commission (Deviation Settlement Mechanism and Related Matters) Regulations, 2022. See the section titled “Consolidated Statements and Other Financial Information — Legal Proceedings” under Item 8.A.
Our business and financial performance could be adversely affected by any change in laws or interpretation of existing, or the promulgation of, laws, rules and regulations applicable to us. There can be no assurance that the GoI will not implement new regulations and policies which will require us to obtain additional approvals and licences from the government and other regulatory bodies or impose onerous requirements and conditions on our operations, which could result in increased compliance costs as well as divert significant management time and other resources. For instance, KERC's order reducing the banking period for renewable generators from one year to six months was overturned by APTEL. This decision has been challenged by distribution licensees in the Supreme Court, where the case is currently pending. Such events are frequent in renewable energy industry and power producers, like us, are always exposed to such modifications from time to time.
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Further, we depend in part on government policies that support renewable energy and enhance the economic feasibility of developing renewable energy projects. The GoI and several of the states in which we operate or plan to operate provide incentives that support the generation and sale of renewable energy, and additional legislation is regularly being considered that could enhance the demand for renewable energy and obligations to use renewable energy sources. In addition, regulatory policies in each state in India currently provide a favourable framework for securing attractive returns on capital invested. If any of these incentives or policies are adversely amended, eliminated or not extended beyond their current expiration dates, or if funding for these incentives is reduced, or if governmental support of renewable energy development, particularly wind, solar and hydro energy, is discontinued or reduced, it could adversely affect our ability to obtain financing, the viability of new renewable energy projects constructed based on current tariff and cost assumptions or the profitability of our existing projects. The GoI has accorded renewable energy “must-run” status, which means that any renewable power that is generated must always be accepted by the grid. However, certain state utilities may order the curtailment of renewable energy generation despite this status and there have been instances of such orders citing grid safety and stability issues being introduced in the past. This may occur as a result of the state electricity boards purchasing cheaper power from other sources or transmission congestion owing to a mismatch between generation and transmission capacities. There can be no assurance that the Government of India will continue to maintain the “must-run” status for renewable energy or that the state electricity boards will not make any orders to curtail the generation of renewable energy.
With regard to group captive matters, the company has to follow the proportionality principle for its past and future projects, as laid down by the Supreme Court in the matter of M/s Dakshin Gujarat Vij Company Limited v. Ms. Gayatri Shakti Paper and Board limited and others. In accordance with this order, the Supreme Court overruled the order laid down by APTEL in Tamil Nadu Power Producers Association v. Tamil Nadu Electricity Regulatory Commission and others. See the section titled “Consolidated Statements and Other Financial Information — Legal Proceedings” under Item 8.A.
The Company and its subsidiaries have secured Long Term Access (“LTA”) for transmission of energy from its wind power projects under various power purchase agreement(s), and signed various LTA Agreements, in accordance with the regulations. However, the Company has received demand notices seeking payment of LTA charges calculated from the date of operationalization of the respective LTA despite the projects not being commissioned on account of delay / termination on account of Force Majeure Events and the Company and its subsidiaries have filed petitions before the Central Electricity Regulatory Commission (“CERC”), seeking alignment of the LTA start date with the actual date of commissioning of the project and for cases where the associated project has been terminated on account of force majeure - a declaration that the Company/its subsidiary is exempted from paying LTA charges for such terminated capacity on account of force majeure. Following the order of CERC, the Company has filed an appeal in APTEL regarding the alignment of LTA with the scheduled commencement of operation date. Recently, in the said pending cases of other developers, APTEL has granted an interim stay against recovery of transmission charges by CTUIL subject to partial payment as directed by the Tribunal. See the section titled “Consolidated Statements and Other Financial Information — Legal Proceedings” under Item 8.A.
Such regulatory changes, through various forums including the order of the Supreme Court may adversely impact our financial performance and require significant management resources to address the issues. Additionally, such evolving laws and new regulations may impose additional approvals and onerous conditions, further straining our resources and affecting our business operations.
The GoI had also removed the upper ceiling on tariffs for solar power bids to facilitate greater participation. Further, pursuant to its priority sector lending scheme classification, the Reserve Bank of India increased the cap of bank loans to Rs. 300 million for borrowers that are generators of solar, biomass, wind, micro- hydro power and for renewable energy based public utilities in order to increase liquidity in the renewable energy sector. In order to boost the Indian economy, the Government of India also proposed the production linked incentive scheme through which 14 critical sectors would benefit from incentives to enhance manufacturing capabilities and exports. These critical sectors include high -efficiency solar photovoltaic modules and advanced chemistry cell batteries, which may boost our business prospects. However, there is no assurance that the GoI or the state governments will give effect to such incentives in future which may, in turn, materially and adversely affect our business, financial condition, results of operations and prospects.
We benefit from a number of other government incentives, including; preferential charges on transmission, wheeling and banking facilities; generation-based incentives schemes for certain wind power assets; tax holidays; and availability of accelerated depreciation for wind and solar power assets. There is no assurance that the GoI and state governments will continue to provide incentives and allow favourable policies to be applicable to us, and these incentives may be available for limited period.
For instance, the Ministry of Power has currently waived inter-state transmission charges until June 30, 2025 subject to certain conditions. However, we may face a reduction in the incentives for wind and solar projects once such waiver is lifted. Changes to government policies curtailing renewable energy generation may adversely affect our business. If governmental authorities stop supporting, or reduce or eliminate their support for, the development of renewable energy projects, it may become more difficult to obtain financing, our economic return on certain projects may be reduced and its financing costs may increase. A delay or failure by governmental authorities to administer incentive programs in a timely and efficient manner could also adversely affect our ability to obtain financing for its projects. These may, in turn, materially and adversely affect our business, financial condition, cash flows, results of operations and prospects.
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Environmental obligations and liabilities could have a substantial negative impact on our business, financial condition, cash flows and results of operations.
Our operations involve the use, handling, generation, processing, storage, transportation, and disposal of hazardous materials and are subject to extensive environmental laws and regulations at the national, state, local, and international levels. These environmental laws and regulations include those governing the discharge of pollutants into the air and water, the use, management, and disposal of hazardous materials and wastes, the clean-up of contaminated sites, and occupational health and safety. As we expand our business into foreign jurisdictions worldwide, our environmental compliance burden may continue to increase both in terms of magnitude and complexity. We have incurred and may continue to incur significant costs in complying with these laws and regulations. In addition, violations of, or liabilities under, environmental laws or permits may result in restrictions being imposed on our operating activities or in our being subject to substantial fines, penalties, criminal proceedings, third-party property damage or personal injury claims, clean-up costs, or other costs. While we believe we are currently in substantial compliance with applicable environmental requirements, future developments such as more aggressive enforcement policies, the implementation of new, more stringent laws and regulations, or the discovery of presently unknown environmental conditions may require expenditures that could have a material adverse effect on our business, financial condition, cash flows and results of operations.
We face uncertainty of title to our land. If we are unable to identify or cure any defects or irregularities with respect to title to such land, our business and operations may be adversely affected.
Property records in India are generally maintained at the state and district level and are updated manually through physical records. Therefore, all land related documents and may not be available online for inspection or updated in a timely manner. This could result in investigations into property records taking a significant amount of time or being inaccurate in certain respects, which may impact the ability to rely on them. Land records are often handwritten, in local languages and not legible, which makes it difficult to ascertain the content. In addition, land records are often in poor condition and are at times untraceable, which materially impedes the title investigation process. In certain instances, there may be a discrepancy between the extent of the areas stated in the land records and the areas stated in the title deeds, and the actual physical area of some of lands on which our projects are constructed or proposed to be constructed. Further, improperly executed, unregistered or insufficiently stamped conveyance instruments in a property’s chain of title, unregistered encumbrances in favour of third parties, rights of adverse possessors, ownership claims of family members of prior owners or third parties, or other defects that a purchaser may not be aware of, can affect the title to a property. Any misrepresentation with respect to title by third parties from whom we purchase land may render such land liable to confiscation and action by other parties who may claim ownership of such land. As a result, potential disputes or claims over title to the land on which our projects are developed or used for operations or will be constructed may arise.
While we carry out due diligence before acquiring land in connection with any project, all risks, onerous obligations and liabilities associated with the land for each project may not be fully assessed or identified, which could include the nature of faulty or disputed title, unregistered encumbrances, adverse possession rights, claims by third parties or potential expropriation by Government of India, which could have an adverse impact on our operations.
We are subject to various labour laws, regulations and standards in India. Non-compliance with and changes in such laws may adversely affect our business, results of operations, cash flows and financial condition.
We are required to comply with various labour and industrial laws in India, which include the Factories Act, 1948, the Industrial Disputes Act, 1947, the Employees State Insurance Act, 1948, the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, the Workmen Compensation Act, 1923, the Payment of Gratuity Act, 1972, the Contract Labour (Regulation and Abolition)Act, 1970 and the Payment of Wages Act, 1936 in India. The GoI had approved the enactment of the Social Security Code 2020, the Occupational Safety, Health and Working Conditions Code 2020 and the Industrial Relations Code 2020. The three new codes have been enacted to abridge, rationalise and consolidate Indian central labour laws. The GoI has also approved implementing the Code on Wages, 2019 alongside the three new labour codes. The Code on Wages, 2019 proposes to subsume four existing laws—the Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976. The new codes, when implemented, will introduce several new changes, such as introducing a single registration and licence for Indian companies, increasing threshold for applicability of certain laws for factories, increase in threshold for engaging contract workers, and government approval for retrenchment (termination) of workers. There is no assurance that our costs of complying with current and future labour laws and other regulations will not adversely affect our business, results of operations or financial condition. There is a risk that we may fail to comply with such regulations, which could result in us being exposed to sanctions and fines and, which may lead us to stop operations which could have an adverse impact on our operations.
Global economic conditions and trade conditions have been challenging and continue to affect the Indian market, which may adversely affect our business, financial condition, results of operations, cash flows and prospects.
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The Indian economy and its securities markets are influenced by economic developments and volatility in securities markets in other countries. Investors’ reactions to developments in one country may adversely affect the market price of securities of companies located in other countries, including India. Adverse economic developments, such as rising fiscal or trade deficits, or a default on national debt, in other emerging market countries may also affect investor confidence and cause increased volatility in Indian securities markets and indirectly affect the Indian economy in general. Furthermore, global events such as supply chain constraints, rising retail and wholesale inflation, volatility in global oil prices and other commodity prices and events such as the COVID-19 pandemic, the war in Ukraine and Israel and Palestine have impacted the macro-economic conditions. Further, worldwide financial instability could have an adverse impact on the Indian economy, including the adverse foreign exchange rates and higher interest rates. Any other global economic developments or the perception that any of them could occur may adversely affect global economic conditions and the stability of global financial markets, and may significantly reduce global market liquidity and restrict the ability of key market participants to operate in certain financial markets. Any of these factors could depress economic activity and restrict our access to capital, which could have an adverse effect on our business, financial condition, cash flows and results of operations.
The geopolitical situation between China and rest of the world including India, as well as broader international dynamics, poses significant risks to our renewable energy business. Tensions between China and India have led to regulatory changes and trade restrictions, impacting the import of crucial components like Solar PV modules, cells, and other solar equipment from China. Any escalation in these tensions could result in further restrictions, increased tariffs, or even bans on imports, severely disrupting our supply chain. Given that a substantial portion of our raw materials and components are sourced from China, these disruptions could lead to project delays, increased costs, and difficulty in maintaining competitive pricing etc. Additionally, shifting global trade policies and alliances could further complicate our ability to secure necessary materials, impacting our operational efficiency and long-term strategic planning. Such geopolitical uncertainties could adversely affect our ability to complete projects on time and within budget, ultimately adversely affecting our financial performance and market position.
Any downgrading of India’s sovereign debt rating by an international rating agency could adversely impact our business, cash flows and results of operations.
India’s sovereign rating is Baa3 with a “Stable” outlook (Moody’s), BBB- with a “positive” outlook (S&P) and BBB- with a “stable” outlook (Fitch). Any adverse revisions to India’s credit ratings by international rating agencies may adversely affect our ratings, terms on which it is able to finance capital expenditure or refinance any existing indebtedness. This could adversely affect our business, financial condition, results of operations, cash flows and prospects.
A judgment of a foreign court may not be able to be enforced against us, certain of our directors or our key management, except by way of a suit in India on such judgment.
Substantially all of the Group’s operating subsidiaries are incorporated under the laws of India, some of our directors and substantially all of our key management personnel are residents of India and substantially all of our assets are located in India. As a result, it may not be possible to effect service of process upon such persons outside India, or to enforce judgments obtained against such parties outside India. In India, recognition and enforcement of foreign judgments are provided for under Section 13 and Section 44A of the Civil Code on a statutory basis. Section 13 of the Civil Code provides that a foreign judgment to which this section applies shall be conclusive regarding any matter directly adjudicated upon, except: (i) where the judgment has not been pronounced by a court of competent jurisdiction; (ii) where the judgment has not been given on the merits of the case; (iii) where it appears on the face of the proceedings that the judgment is founded on an incorrect view of international law or a refusal to recognise the law of India in cases to which such law is applicable; (iv) where the proceedings in which the judgment was obtained were opposed to natural justice; (v) where the judgment has been obtained by fraud; and (vi) where the judgment sustains a claim founded on a breach of any law then in force in India. Under the Civil Code, a court in India shall, upon the production of any document purporting to be a certified copy of a foreign judgment, presume that the judgment was pronounced by a court of competent jurisdiction unless the contrary appears on record.
India is not a party to any multilateral international treaty in relation to the recognition or enforcement of foreign judgments. Section 44A of the Civil Code provides that where a foreign judgment has been rendered by a superior court, within the meaning of such section, in any country or territory outside India, which the GoI has by notification declared to be a reciprocating territory, it may be enforced in India by proceedings in execution as if the judgment had been rendered by the relevant court in India. However, Section 44A of the Civil Code is applicable only to monetary decrees not being in the nature of any amounts payable in respect of taxes, other charges of a like nature or in respect of a fine or other penalty and does not apply to arbitration awards. Further, the execution of a foreign decree under Section 44A of the Civil Code is also subject to the exceptions under Section 13 of the Civil Code.
The United Kingdom has been declared by the GoI to be a reciprocating territory for the purposes of Section 44A. However, the United States has not been declared by the GoI to be a reciprocating territory for the purposes of Section 44A of the Civil Code. Accordingly, a judgment of a court in a country which is not a reciprocating territory may be enforced in India only by a new proceeding instituted in a
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court in India and not by proceedings in execution. Such a suit has to be filed in India within three years from the date of the judgment in the same manner as any other suit filed in India to enforce a civil liability in India. It is unlikely that a court in India would award damages on the same basis as a foreign court would, if an action were brought in India. Further, it is unlikely that an Indian court would enforce foreign judgments if that court were of the view that the amount of damages awarded was excessive or inconsistent with Indian public policy. A party seeking to enforce a foreign judgment in India is required to obtain approval from the RBI to repatriate outside India any amount recovered pursuant to the execution of such judgment and such amount may be subject to income tax in accordance with applicable laws.
In addition, any judgment awarding damages in a foreign currency would be converted into Indian Rupees on the date of the judgment and not the date of payment. The Group cannot predict whether a suit brought instituted in an Indian court will be disposed of in a timely manner or be subject to considerable delay.
A decline in India’s foreign exchange reserves may adversely affect liquidity and interest rates in the Indian economy.
As of March 31, 2024, India’s foreign exchange reserve was US$ 645.58 billion. A sharp decline in these reserves could result in reduced liquidity, increased hedging costs and higher interest rates in the Indian economy.
Reduced liquidity, increased hedging costs or an increase in interest rates in the economy following a decline in foreign exchange reserves could have a material adverse effect on our financial performance and ability to obtain financing to fund our growth on favourable terms or at all.
Changes in the taxation system in India could adversely affect our business.
Our operations, profitability and cash flows could be adversely affected by any unfavourable changes in central and state-level statutory or regulatory requirements in connection with direct and indirect taxes and duties, including income tax, goods and service tax, (“GST”) in India, or by any unfavourable interpretation taken by the relevant taxation authorities and/or courts and tribunals in India. Any amendments to Indian tax laws could adversely affect our operations, profitability and cash flows. For example, the GoI levied GST on renewable energy devices as well as on service of construction for solar power plant and wind operated electricity generators.
Under Indian tax laws, generally a domestic company is liable to corporate tax rate of 30 % (plus applicable surcharge and cess). However, a lower corporate tax rate of 25 % (plus applicable surcharge and cess) is applicable for domestic companies in the year ending March 31, 2024 whose annual turnover or gross receipts does not exceed Rs. 4 billion in the year ended March 31, 2022. Additionally, the Income Tax Act, 1961 provides for a minimum alternate tax, or “MAT,” of 15 % (plus applicable surcharge and cess) on the book profits of the companies computed in the prescribed manner, if the normal corporate tax liability of the company is less than 15 % of such book profits.
The Indian tax laws also provide an option to the domestic companies to pay a reduced statutory corporate income tax of 22% plus applicable surcharge and cess (15% plus applicable surcharge and cess, for newly set up domestic manufacturing companies, subject to certain conditions), provided such companies do not claim certain specified deduction or exemptions. Further, where a company has opted to pay the reduced corporate tax rate of 15% or 22% plus applicable surcharge and cess, the MAT provisions would not be applicable. Thus, we and our subsidiaries operating in India may choose not to claim the specified deductions or exemptions and claim the lower corporate tax, in which case, the MAT provisions would not be applicable. Alternatively, we and our subsidiaries may choose to pay the higher of corporate tax, i.e., 30% or 25%, as the case may be, plus applicable surcharge and cess, after claiming the applicable deductions and exemptions or the MAT at the rate of 15% plus applicable surcharge and cess. Considering the impact of these provisions may vary from company to company and the option exercised, there is no certainty on the impact that these amendments may have on our business and operations or on the industry in which we operate.
Further, as per the Income Tax Act, 1961, a company incorporated outside India is to be treated as a resident in India if its place of effective management, or “POEM” is in India. POEM has been defined to mean a place where key management and commercial decisions that are necessary for the conduct of business of an entity as a whole are, in substance, made. If a company incorporated outside India is treated as a resident in India, global income of such company would be taxable in India at the rate of 40 % plus applicable surcharge and cess (Union Budget 2024-25 has proposed to change this rate to 35% plus applicable surcharge and cess with effect from 1 April 2024).
Separately, if a foreign company carries on any of its business activities in India through its employees or agent or any other personnel, such foreign company could be deemed to have taxable presence (Permanent Establishment or Business Connection) in India, in which case, income of the foreign company attributable to its India presence would be taxed on a net basis in India at 40% plus applicable surcharge and cess (Union Budget 2024-25 has proposed to change this rate to 35% plus applicable surcharge and cess with effect from 1 April 2024), subject to benefit, if any, under applicable double taxation avoidance agreements.
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Capital gain arising on transfer of unlisted shares in an Indian company is taxable in the hands of foreign company at 10 % plus applicable surcharge and cess (Union Budget 2024-25 has proposed to change this rate to 12.5% plus applicable surcharge and cess with effect from 23 July 2024) if such shares have been held for a period of more than 24 months, otherwise at 40 % plus applicable surcharge and cess (Union Budget 2024-25 has proposed to change this rate to 35% plus applicable surcharge and cess with effect from 1 April 2024), subject to benefit, if any, under applicable agreements. Indexation of cost of acquisition may not allowed to such foreign shareholders. Any further upstreaming of funds by the foreign company to its shareholders by way of dividend in cash should not be subject to tax in India.
If the non-resident shareholders of the foreign company exit by way of redemption of the shares held by them in the foreign company or by selling the shares in foreign company, such non-resident shareholders could be taxed in India where the foreign company derives substantial value from India subject to shareholders being either entitled to small shareholder exemption available under Income Tax Act, 1961 or a benefit under the applicable double taxation avoidance agreement.
Dividends distributed by domestic companies are taxable in the hands of shareholders with effect from the year started April 1, 2020. Domestic companies are required to withhold tax at applicable rates. Until the year ended March 31, 2020, the domestic company distributing dividend was liable to pay dividend distribution tax at a rate of 15 % plus applicable surcharge and cess on grossed up amount and such dividend was exempt in the hands of the shareholders.
Indian resident shareholders exiting from a foreign company either by way of redemption or sale of shares would be liable to capital gains tax at 20 % (with cost indexation benefit) plus applicable surcharge and cess (Union Budget 2024-25 has proposed to change this rate to 12.5% without cost indexation benefit plus applicable surcharge and cess with effect from 23 July 2024) where the shares have been held for a period of more than 24 months, otherwise at the applicable tax rates.
Under the Income Tax Act of India, interest income paid by the Company to non-resident investors on long -term bonds (until June 30, 2023) are subject to tax at the rate of 5% (plus applicable surcharge and health and education cess), subject to satisfaction of prescribed conditions.
Where the above beneficial rates are not available, interest income will be taxed in the hands of non-resident investors at rates varying from 20-35% (plus applicable surcharge and cess), depending on the nature of debt. Non-resident investors may claim benefit of the applicable tax treaty, if any, in respect of such interest income.
India has signed and ratified the Multilateral Instrument, or “MLI,” which modifies the existing bilateral tax treaty, to implement tax treaty related measures to prevent base erosion and profit shifting or “BEPS.” As a result, MLI has entered into force for India on October 1, 2019 and its provisions have effect on India’s tax treaties, including tax rates specified therein, from the year ended March 31, 2021 onwards where the other country has also deposited its instrument of ratification with the Organization of Economic Co-operation and Development (“OECD”) and both countries have notified the relevant tax treaty as a Covered Tax Agreement.
The General Anti-Avoidance Rules (“GAAR”) under Indian tax law seeks to deny the tax benefit claimed in “impermissible avoidance arrangements.” An impermissible avoidance arrangement is defined under Indian tax laws as any arrangement, the main purpose of which is to obtain a tax benefit, subject to satisfaction of certain tests. If GAAR provisions are invoked, then the tax authorities have wide powers, including the denial of tax benefit or the denial of a benefit under a tax treaty. In the absence of sufficient judicial precedents interpreting GAAR provisions, the consequential effects on us cannot be determined yet and there can be no assurance that such effects would not adversely affect our business, future financial performance.
There is no assurance that any of the aforementioned provisions in Indian tax law and amendments thereto in the future would not adversely affect our business, prospects, financial condition, results of operations and cash flows.
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Risks Relating to the Company’s Securities
Sales of a substantial number of our securities in the public market by certain of our existing security holders could cause the price of our Class A Ordinary Shares and Warrants to fall.
Certain existing shareholders can resell a number of our Class A Ordinary Shares constituting a substantial majority of our issued and outstanding Class A Ordinary Shares (assuming that all of our Warrants have been exercised) as well as a number of Warrants, and all of our Class C Ordinary Shares. Sales of a substantial number of Class A Ordinary Shares and/or Warrants in the public market by such security holders and/or by our other existing security holders, or the perception that those sales might occur, could depress the market price of our Class A Ordinary Shares and Warrants and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that such sales may have on the prevailing market price of our Class A Ordinary Shares and Warrants.
Fluctuations in operating results or quarter-to-quarter earnings may result in significant decreases or fluctuations in the price of our securities.
The stock markets experience volatility that is often unrelated to operating performance. These broad market fluctuations may adversely affect, or cause significant volatility in, the market price of our Class A Ordinary Shares and Warrants. Separately, if we are unable to operate as profitably as investors expect, the market price of our Class A Ordinary Shares and Warrants will likely decline when it becomes apparent that the market expectations may not be realised. In addition to operating results, many economic and seasonal factors outside of our control could have an adverse effect on the price of our Class A Ordinary Shares and Warrants and increase fluctuations in earnings from them. These factors include certain of the risks discussed herein, operating results of other companies in the same industry, changes in financial estimates or recommendations of securities analysts, speculation in the press or investment community, negative media coverage or risk of proceedings or government investigation, change in government regulation, foreign currency fluctuations and uncertainty in tax policies, the possible effects of war, terrorist and other hostilities, other factors affecting general conditions in the economy or the financial markets or other developments affecting the renewable energy industry.
The rights of the holders of Class C Ordinary Shares are different with respect to voting and conversion rights.
Holders of Class A Ordinary Shares are entitled to one vote per share in respect of matters requiring the votes of shareholders generally, while holders of Class C Ordinary Shares are not entitled to vote on such matters. Subject to the ReNew Global Articles, a Class C Ordinary Share may be automatically re-designated as one Class A Ordinary Share when transferred under certain circumstances however, a transferee may continue to hold Class C Ordinary Shares if the conditions of re-designation under the ReNew Global Articles are not met. The Class C Ordinary Shares are not listed and there is no public market for such shares. Consequently, the holder of Class C Shares may not be able to sell any Class C Ordinary Shares that it acquires at the prevailing market price of the Class A Ordinary Shares or at any other price or at the time that it would like to sell them.
We are dependent upon distributions or payments from our subsidiaries to pay taxes and cover our corporate and other overhead expenses.
We have no independent means of generating revenue, and we are dependent upon our subsidiaries for distributions or payments to pay taxes and corporate and overhead expenses to the extent that we need funds and a subsidiary is restricted from making such distributions or payments under applicable law or regulation or under the terms of any financing arrangements due to restrictive covenants or otherwise, or are otherwise unable to provide such funds, our liquidity and financial condition could be materially adversely affected.
We may issue additional securities without requiring shareholder approval in certain circumstances, which would dilute existing ownership interests and may depress the market price of our Class A Ordinary Shares and Warrants.
We may issue additional securities of equal or senior rank in the future in connection with, among other things, our equity incentive plan or a Founder Investor Put Financing Issuance under the terms of the Registration Rights, Coordination and Put Option Agreement (for details, see the section titled “Related Party Transactions — Registration Rights, Coordination and Put Option Agreement” under Item 7.B) without further shareholder approval, in a number of circumstances. Pursuant to a Founder Investor Put Financing Issuance, we may issue up to 11,437,725 additional Class A Ordinary Shares to finance the purchase of ReNew India Ordinary Shares held by the Founder Investors.
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There can be no assurance that we will not issue further shares or convertible securities or other equity-linked securities or that our existing security holders will not dispose of, pledge, or otherwise encumber their holdings of shares or other securities. Further, our partners and other strategic investors in our businesses may dispose of their stakes at a value which may significantly affect the valuation of our businesses which may, in turn, affect the market price of the Class A Ordinary Shares and Warrants. In addition, any perception by investors that such issuances or sales might occur could also affect the market price of our Class A Ordinary Shares and Warrants.
In case of any negative media coverage or if securities or industry analysts do not publish research, publish inaccurate or unfavourable research or cease publishing research about the Company, the market price of our Class A Ordinary Shares and Warrants, and trading volume could decline significantly.
The market for our Class A Ordinary Shares and Warrants will depend in part on the media coverage and the research/ reports that securities/ industry analysts publish about us or our business. In the event of negative media coverage or analysts who cover our Company downgrade their opinions about our Class A Ordinary Shares and Warrants, publish inaccurate or unfavourable research about us or our industry, or cease publishing about us or our industry regularly, demand for our Class A Ordinary Shares and Warrants could decrease, which might cause the market price of our Class A Ordinary Shares and Warrants, and trading volume to decline significantly.
We are incurring higher costs as a result of being a public company.
We are incurring additional legal, accounting, insurance and other expenses, including costs associated with public company reporting requirements following completion of the Business Combination. We incur higher costs associated with complying with the requirements of the U.S. federal securities laws and related rules implemented by the SEC and the Nasdaq, as well as similar legislation in applicable jurisdictions such as the U.K. The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. These laws and regulations have increased our legal and financial compliance costs since the Business Combination and render some activities more time-consuming and costlier, although we are currently unable to estimate these costs with any degree of certainty. We may need to hire more employees or engage outside consultants to comply with these requirements, which will increase our costs and expenses. These laws and regulations could make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our Board, board committees or as executive officers. Furthermore, if we are unable to satisfy our listing and other obligations as a public company, we could be subject to delisting of our shares, fines, sanctions and other regulatory action and potentially civil litigation.
As a “foreign private issuer” under the rules and regulations of the SEC, we are permitted to, and may, file less or different information with the SEC than a company incorporated in the United States or otherwise not filing as a “foreign private issuer,” and will follow certain home country corporate governance practices in lieu of certain Nasdaq requirements applicable to U.S. issuers.
We are considered a “foreign private issuer” under the Exchange Act and are therefore exempt from certain rules under the Exchange Act, including the proxy rules, which impose certain disclosure and procedural requirements for proxy solicitations for U.S. and other issuers. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or within the same time frames as U.S. companies with securities registered under the Exchange Act. We currently prepare our financial statements in accordance with IFRS. We will not be required to file financial statements prepared in accordance with or reconciled to U.S. GAAP so long as our financial statements are prepared in accordance with IFRS as issued by the IASB. We are not required to comply with Regulation FD, which imposes restrictions on the selective disclosure of material information to shareholders. In addition, our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of our securities. Accordingly, if you continue to hold our securities, you may receive less or different information about the Company than you currently receive about a U.S. domestic public company.
In addition, as a “foreign private issuer” whose shares are listed on the Nasdaq, we are permitted to follow certain home country corporate governance practices in lieu of certain Nasdaq requirements. For a summary of the significant differences between our corporate governance practices and those required of U.S. listed companies, see the section titled “Board Practices — Foreign Private Issuer Status” under Item 6.C.
We could lose our status as a “foreign private issuer” under current SEC rules and regulations if more than 50% of our outstanding voting securities become directly or indirectly held of record by U.S. holders and any one of the following is true: (i) the majority of our directors or executive officers are U.S. citizens or residents; (ii) more than 50% of our assets are located in the United States; or (iii) our
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business is administered principally in the United States. If we lose our status as a foreign private issuer in the future, we will no longer be exempt from the SEC rules and Nasdaq requirements described above and, among other things, will be required to file periodic reports and annual and quarterly financial statements as if we were a company incorporated in the United States. If this were to happen, we would likely incur substantial costs and management time in fulfilling these additional regulatory requirements.
As we are an English public limited company, certain capital structure decisions will require shareholder approval, which may limit our flexibility to manage our capital structure.
We are a public limited company incorporated under the laws of England and Wales. The U.K. Companies Act 2006 (“U.K. Companies Act”) provides that a board of directors may only allot shares (or grant rights to subscribe for or to convert any security into shares) with prior authorization granted by an ordinary resolution of our shareholders (being a resolution passed by a majority of the votes cast) or in the ReNew Global Articles. This authorization must state the aggregate nominal amount of shares that it covers, can be valid up to a maximum period of five years and can be varied, renewed or revoked by shareholders. An exception applies in respect of the allotment of shares in pursuance of an employees' share scheme (as defined in the U.K. Companies Act).
Subject to certain limited exceptions, the U.K. Companies Act generally provides shareholders with pre-emption rights when new ordinary shares in the Company are allotted (or rights to subscribe for, or to convert securities into, such ordinary shares are granted, or such ordinary shares held as treasury shares are sold) wholly for cash. However, it is possible for these pre-emption rights to be disapplied by the ReNew Global Articles or a special resolution of our shareholders (being a resolution passed by at least 75% of the votes cast). Such a disapplication of pre-emption rights cannot apply for longer than the duration of the authority to allot shares to which it relates.
Subject to certain limited exceptions, the U.K. Companies Act generally prohibits a public limited company from repurchasing its own shares without the prior approval of its shareholders by ordinary resolution, being a resolution passed by a simple majority of votes cast, and other formalities. Such approval may be provided for a maximum period of up to five years.
There can be no assurance that circumstances will not arise that would cause such shareholder approvals in respect of the authorization of the allotment of shares, disapplication of pre-emption rights, or repurchase of shares, not to be obtained, which would affect our capital management.
English law requires that we meet certain additional financial requirements before we can declare dividends or repurchase shares.
Under English law, we will (among other restrictions) be able to declare dividends, make distributions or repurchase shares only out of profits available for distribution, being our accumulated, realised profits, to the extent not previously utilised by distribution or capitalization, less our accumulated, realised losses, to the extent not previously written off in a reduction or reorganization of capital duly made.
Dividends are authorised and determined by our Board of Directors in its sole discretion and depend upon a number of factors, including:
Additionally, our Board of Directors has authorised a $250 million share repurchase program, of which approximately $11 million of repurchase authority remained as of March 31, 2024. Our share repurchase program does not obligate us to acquire a specific number of shares during any period, and our decision to commence, discontinue or resume repurchases in any period will depend on the same factors that our Board of Directors may consider when declaring distributions, among others.
Any downward revision in the number of shares we purchase under our share repurchase program could have an adverse effect on the market price of our Class A Ordinary Shares and Warrants.
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The ReNew Global Articles provide that the courts of England and Wales will be the exclusive forum for the resolution of all shareholder complaints other than complaints asserting a cause of action arising under the Securities Act or the Exchange Act, and that the United States District Court for the Southern District of New York will be the exclusive forum for the resolution of any shareholder complaint asserting a cause of action arising under the Securities Act or the Exchange Act.
The ReNew Global Articles provide that the courts of England and Wales will be the exclusive forum for resolving all shareholder complaints other than shareholder complaints asserting a cause of action arising under the Securities Act or the Exchange Act, and that the United States District Court for the Southern District of New York will be the exclusive forum for resolving any shareholder complaint asserting a cause of action arising under the Securities Act and the Exchange Act. This choice of forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favourable for disputes with the Company or our directors, officers or other employees, which may discourage such lawsuits. If a court were to find either choice of forum provision contained in our ReNew Global Articles to be inapplicable or unenforceable in an action, we might incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our results of operations and financial condition.
A change in our tax residency could have an adverse effect our future profitability and cash flows and may trigger taxes on dividends or exit charges.
Under current U.K. legislation, a company that is incorporated in the U.K. is regarded as resident in the U.K. for taxation purposes unless it is treated as resident in another jurisdiction pursuant to any appropriate double tax treaty with the U.K. Other jurisdictions such as India may also seek to assert taxing jurisdiction over us.
We intend to conduct our affairs so that we will be treated as solely resident in the U.K. for tax purposes. However, as certain members of our Board are likely to be tax residents or citizens of other countries, there is a risk that, even if we are managed and controlled from the U.K., we may be considered to be tax resident in, or have a permanent establishment in such other countries.
If we were to be treated as resident in more than one jurisdiction or to have a permanent establishment in another jurisdiction, we could be subject to taxation in multiple jurisdictions. If we were considered to be a tax resident of another country, we could become liable for income tax on our worldwide income in that country. Further, in such circumstance any dividend declared by us to our shareholders would (subject to treaty relief) be subject to that country’s income tax in the hands of the shareholders and consequent withholding of taxes by us. If we were found to be solely resident in another country based on a mutual agreement between tax authorities, we would be similarly liable for that country’s taxes and withholding taxes. Alternatively, if we were to be treated as having a permanent establishment in India but not be a tax resident in India, our income attributable to such permanent establishment would be taxed in India.
If we cease to be resident in the U.K. and become a resident in another jurisdiction for any reason, we may be subject to U.K. exit charges, and could become liable for additional tax charges in the other jurisdiction (including corporate income tax charges).
We may encounter difficulties in obtaining lower rates of Indian withholding income tax envisaged by the DTAA for dividends distributed from India.
Under the Income Tax Act, 1961 (ITA), any dividend distribution by an Indian company to a shareholder who is not tax resident in India is subject to withholding of tax at 20 % (plus applicable surcharge and cess). This rate can be reduced for such shareholders who are eligible for a reduced rate under the applicable DTAA.
If we satisfy certain conditions, we can benefit from the provisions of the DTAA between the U.K. and India, such as a reduced rate of 10 % for Indian withholding tax from dividend distributions received from ReNew India. The conditions that we must satisfy to benefit from the provisions of the DTAA include, but are not limited to, the Company being the beneficial owner of any such distributed dividend income, not having a permanent establishment in India, having a valid tax residency certificate issued by the U.K. authorities, meeting the test of substance in the U.K. and the existence of a commercial rationale for setting up the Company in U.K. as required by the anti-abuse provisions under the DTAA and General Anti-Avoidance Rules (“GAAR”) under the ITA.
Although we will seek to claim protection under the DTAA on dividends distributed to us from ReNew India, there is a risk that the applicability of the reduced rate of 10 % may be challenged by the Indian tax authorities. As a result, there can be no assurance that we would be able to avail ourselves of the reduced withholding tax rate in practice and we may not get any credit for our withholding tax and thereby any additional withholding tax could reduce our after-tax profits.
Any downgrading of our bond ratings could adversely impact our business and results of operations.
We regularly access the Indian and international bonds and non-convertible debentures market, allowing us to raise funds from a range of institutional investors. From 2017 until March 2024, we raised over $3.9 billion through overseas dollar bonds. Our dollar bonds
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are currently rated BB- by Fitch and Ba3 by Moody’s, and we have a corporate rating of Ba2 by Moody’s. Any adverse revisions to these ratings by rating agencies may adversely affect the terms on which we are able to raise new funds and refinance existing borrowings. This could adversely affect our business, financial condition, cash flows and results of operations.
ITEM 4. INFORMATION ON THE COMPANY
A. History and Development of the Company
ReNew Energy Global Plc is a public limited company incorporated under the laws of England and Wales (company number 13220321) as a private limited company on February 23, 2021, and re-registered as a public limited company on May 12, 2021.
We are a leading decarbonization solutions company. Our clean energy portfolio of approximately 15.64 GWs of total capacity as of May 31, 2024, is one of the largest globally. We are one of the largest utility-scale renewable energy solutions providers in India. We operate wind, solar and hydro energy projects in India and as of May 31, 2024, we had a total operational capacity of 9.52 GW, out of which 8.87 GW is commissioned and 650 MW is generating pre-commissioning revenue through sales in the merchant market, and an additional 6.12 GW of committed capacity. In addition to being one of the largest independent power producers in India, we provide clean energy solutions and value-added energy offerings through digitalization, storage, and carbon market services that increasingly are integral to addressing climate change. We were founded in 2011 and are committed to driving change in India’s energy portfolio by delivering cleaner and smarter energy solutions. We commenced operations in 2012 and our portfolio has grown from a 25.2 MW wind energy project in the state of Gujarat in India to more than 150 renewable energy projects with a commissioned and committed capacity of 15.64 GW across nine states in India as of May 31, 2024. As of May 31, 2024, the Company has signed approximately 2.2 GW of contracts subsequent to the year ended March 31, 2024.
Our total income has grown from Rs. 69,195 million in the year ended March 31, 2022, to Rs. 96,531 million in the year ended March 31, 2024.
See the section titled “Liquidity and Capital Resources — Cash Flows Analysis — Capital Expenditure” under Item 5.B for a description of our capital expenditure and section titled “Liquidity and Capital Resources — Indebtedness” under Item 5.B for a description of our indebtedness.
ReNew Global’s registered office is C/O Vistra (UK) Ltd Suite 3, 7th Floor, 50, Broadway, London, England, SW1H 0DB, United Kingdom. The Company’s principal operational office in India is C/O ReNew, Commercial Block-1, Zone 6, Golf Course Road, DLF City Phase V, Gurugram 122009, Haryana, India, Telephone: (+91) 124 489 6670. ReNew Global’s principal website address is https://renew.com/. We do not incorporate the information contained on, or accessible through, ReNew Global’s websites into this Report, and you should not consider it a part of this Report. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding registrants that file electronically with the SEC. The SEC’s website is www.sec.gov.
B. Business Overview
We are a leading decarbonization solutions company. Our clean energy portfolio of approximately 15.6 GWs on a gross basis as of May 31, 2024, is one of the largest globally. We are one of the largest utility- scale renewable energy solutions providers in India in terms of total commissioned capacity. We operate wind, solar and hydro energy projects in India and as of May 31, 2024, we had a total operational capacity of 9.52 GW, out of which 8.87 GW is commissioned and 650 MW is generating pre-commissioning revenue through sales in the merchant market, and an additional 6.1 GW of committed capacity. In addition to being one of the largest independent power producers in India, we provide end-to-end solutions in the areas of clean energy, value- added energy offerings through digitalization, storage, and carbon markets that increasingly are integral to addressing climate change. During the year, we signed Memorandum of Understandings (MoU) with various financial institutions such as PFC, REC, and ADB to the tune of ~$13 bn to enable financing of RE projects. We also signed an MoU with JERA for evaluating investments in green hydrogen. In addition, during the year, Gentari purchased a 49% equity stake in our 403 MW Peak Power project and we also signed a MOU with Gentari for a joint investment in renewable energy projects of up to 5 GW.
Our projects are based on proven wind, solar and storage technologies, typically covered under long-term PPAs with creditworthy offtakers including central government agencies, state electricity utilities and private industrial and commercial consumers in India. We are supported by high quality long-term global investors such as CPP Investments, ADIA (Abu Dhabi Investment Authority), JERA (a joint venture between TEPCO Fuel & Power, a wholly owned subsidiary of Tokyo Electric Power Company, and Chubu Electric Power Co., Inc.), South Asia Clean Energy Fund and public markets shareholders and we are led by an experienced management team under the leadership of our Founder, Chairman and Chief Executive Officer, Mr. Sumant Sinha, who has extensive experience across our operational and strategic focus areas.
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Our strong track record of organic and inorganic growth is demonstrated by an increase in our operational capacity which has grown 4.8 times from the year ended March 31, 2017, to March 31, 2024. We are one of the largest independent power producers (in terms of total commissioned capacity) in the Indian renewable energy industry which has been achieved by delivering wind and solar energy projects, against the backdrop of Government of India’s policies to promote the growth of renewable energy in India. We have a robust financial position and demonstrated access to diversified pool of capital from Indian and international investors, lenders and other capital providers.
We are also a provider of intelligent energy solutions. We have an experienced in-house team focused on forecasting renewable energy demand and modelling energy distribution profiles. These solutions underpin grid infrastructure developed around renewable energy, minimise intra-day and seasonal demand variations and cost less than building new thermal power resources.
Our market opportunity
Key drivers of growth in renewable energy in India include structural policy reforms in India’s power sector, overall growth in power demand, economically viable tariffs compared to other fuel sources, “must- run” status to renewable power plants (which means that renewable power that is generated must always be accepted by the grid), fixed price over long-term contracts allowing risk diversification and greater mix of central government offtakers (with better credit ratings) in recently awarded projects. India had approximately 190 GW of total renewable installed generating capacity (comprising of wind, solar and large hydro assets) as of March 31, 2024, and it has announced a target of 500 GW of clean energy by 2030. In addition, under the National Green Hydrogen Mission, one of the key mission outcomes projected by 2030 entails development of green hydrogen production capacity of at least 5 Million Metric Tons (“MMT”) per annum and abatement of nearly 50 MMT of annual greenhouse gas emissions, which may require 125 GW of additional RE capacity.
We believe that through our disciplined bidding approach and vast project execution expertise, we are well positioned to tap this potential and grow our capacity through a combination of (i) our committed projects of 3.93 GW as on March 31, 2024 and 6.12 GW as on May 31, 2024; and (ii) uncontracted pipeline capacity of 5.8 GW, which will continue to be auctioned by central and state government agencies as part of the Government of India’s objective to achieve India’s renewable energy targets. Considering the importance of the corporate PPA market, ReNew has a separate department which exclusively looks at clean energy solutions for corporate customers. We pursue business with these customers through channel partners and also by responding to tenders.
Our competitive strengths
Market leadership in India’s high growth renewable energy sector
We are one of India’s largest utility-scale renewable energy solutions providers in terms of total commissioned capacity. During Fiscal 2023-24, bidding activities in India picked up considerably, driven by the Indian government’s 50 GW annual bids plan. ReNew dominated the utility segment bidding landscape by winning over 13% of the bids in Fiscal 2023-24. Our total operational capacity has grown at a CAGR of 25% from 2.0 GW in March 2017 to 9.52 GW in March 2024. We contributed 11% of new renewable generating capacity (comprised of wind and solar assets) added in India in Fiscal 2023-24. As of March 31, 2024, the total installed capacity in India, comprised of solar and wind assets, was 128 GW, and 18 GW increase over Fiscal 2022-23.
Presence across value chain through extensive in-house end-to-end project execution capabilities
We have a proven track record of developing, operating and maintaining projects at high standards. Our Board closely monitors project performance and actively guides our senior management in addressing operational issues. Our key competitive advantage is having in-house, project execution capabilities with a focus on execution and operational excellence. We believe that our range of wind and solar capabilities across project selection, resource assessment, project funding, land acquisition, project execution and project O&M positions us well for bidding for larger projects. For example,
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Building expertise in intelligent energy solutions and services
We believe that we are transforming renewable energy from real-time energy to dispatchable and controllable energy through digitization and use of storage solutions to support the economy-wide shift to a carbon-neutral electricity mix in India. Over the past four years, we have transitioned from a mainstream utility scale renewable energy company to an intelligent energy utility platform to solve digital integration of energy sources requirement.
Our ability to provide fixed power and on-demand schedulable peak power, enables us to solve for key issues that our offtakers face on scheduling and peak power, thereby giving us a competitive advantage.
We are working with global battery OEMs and system integrators to build a pipeline of utility-scale battery energy storage systems in India. The growth areas for this segment include battery pack assembly and building battery asset management capabilities. We actively look out for and partner with developers of renewable technology to remain competitive and enhance our capabilities. . We have formed a 50:50 JV with Fluence to bring market-leading energy storage technology and global experience to Indian customers by localizing and integrating Fluence’s energy storage products and packages in India.
While our business is not directly exposed to seasonality on the demand side, weather conditions can have a significant effect on our power generation and construction activities. The profitability of our wind and solar energy projects is directly correlated to wind and solar conditions at our project sites. The generation profile of these projects therefore does not always correlate with power demand. ReNew is therefore aiming to provide more balanced renewable power supply. We are among the few renewable energy producers with wind, solar and hydro assets and have won three intelligent energy solution projects, Peak Power (322 MW wind and 81 MW solar), Round-The-Clock (901 MW wind and 400 MW solar) and SJVN Firm & Dispatchable Renewable Energy (“FDRE I”) (500 MW solar and 450 MW wind) as of May 31, 2024. Our competitive differentiators are our ability to handle multiple renewables technologies, forecast generation profiles to minimise deviations from demand and sell excess power economically to the market, notwithstanding fluctuation generation profiles.
Project portfolio diversification across resources, geography, offtakers and vendors
Our portfolio is well diversified between wind and solar energy projects across eight states in India. We also enjoy a diversified base of offtakers and vendors. This diversification mitigates the operational volatility due to seasonal weather conditions, reduces concentration risk and places us at an advantage in bidding and winning bids for projects. Our offtakers include central government agencies and public utilities including state electricity utilities, and private industrial and commercial consumers. We focus particularly on the credit profile of our offtakers. As of March 31, 2024, approximately 44% of our offtakers (in terms of total capacity) included central agencies such as Solar Energy Corporation of India Ltd., or “SECI”, National Thermal Power Corporation Limited, or “NTPC” and PTC India Limited, or “PTC”. In addition, approximately 16% of our total offtaker base comprised of corporate and industrial customers. We also work with a broad range of OEM suppliers for sourcing wind and solar equipment. We continue to build in-house O&M capabilities for wind energy projects, thereby reducing our dependence on third parties and managing our costs.
Predictive analytics and centralised monitoring
We closely monitor the performance of our wind and solar energy projects through our central and state monitoring centres, namely ReNew Diagnostics Centre and ReNew Command and Control Centres. Our dedicated team equipped with digital tools continuously tracks real-time data on energy generation at each site, promptly identifying any anomalies for immediate resolution. Moreover, our team analyses each project for potential issues, enabling us to enhance operational efficiency, monitor asset health, and optimise OEM maintenance processes. To support these efforts, our comprehensive ReD (ReNew Digital) Analytics Lab brings together cross-functional teams to develop advanced analytics solutions.
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Strong and stable financial position with access to diverse sources of funding
We benefit from a strong financial position which we leverage prudently to support our growth. We have raised a mix of equity and debt to finance our projects. Our equity investors include a diversified pool of well-known international private equity, sovereign wealth and pension funds as well as renewables and infrastructure focused investors. We also have access to a range of project finance and debt instruments from multiple Indian and international investors. Our broad base of long -standing, equity investors include CPP Investments, ADIA, JERA, South Asia Clean Energy Fund and public markets shareholders. Since our incorporation in 2011, our equity investors have invested a total of $2.1 billion in the Group in various tranches, helping us retain an efficient capital structure with no mezzanine capital instruments. We have long-standing relationships with our project finance, corporate debt lenders and other capital providers including public and private commercial banks, non-banking financial companies, institutional investors, mutual funds and pension funds as well as specialised infrastructure lenders.
We routinely refinance our projects once they are operational. We have benefited from refinancing as it gives us the opportunity to create additional liquidity through top -up as well as release of existing cash, enhanced accrual of internal cash flows due to bullet repayment structures in bonds and easier restricted payment conditions. The additional liquidity can be utilised for various distributions, including to fund additional capital expenditure and optimise capital structure across the broader portfolio. We have had access to the on- shore bonds and non-convertible debentures market, allowing us to raise funds from institutional investors. We also deploy innovative structures to raise finance for our projects. From 2017 to March 2024, we have raised over $3.9 billion through overseas dollar green bonds. Our dollar bonds are currently rated BB- by Fitch and Ba3 by Moody’s, and we have a corporate rating of Ba2 by Moody’s.
Recurring and long-term cash flows supported by stable and long-term offtaker contracts
Our projects benefit from long-term PPAs, thereby enhancing the offtake security and long-term visibility of our cash flows. The term of our PPAs with central government agencies and state electricity distribution companies is generally 25 years from the commercial operation date of the project. The term of our PPAs with commercial and industrial customers, that constitute approximately 16% of our portfolio, ranges from 8 to 25 years. These PPAs provide for fixed tariff rates with limited escalation provisions, thus providing stream of visible, predictable and long-term cash flows.
Experienced professional management team.
We are led by a professional and extensively experienced management team, which has a deep understanding of managing renewable energy projects and a proven track record of performance. We draw on the knowledge of our Board, which brings us expertise in the areas of corporate governance, business strategy, and operational and financial capabilities, among others. Our shareholders and investors also have extensive experience of investing in the renewable energy industry, which we believe is key to a number of our growth strategies, including our measured approach to project selection, our expansion into solar energy projects and our development of internal capabilities across several operational areas.
Capital discipline
We target levered project equity IRRs of 16-20%. We are also focusing on raising capital through asset sales and minority stake sales, which have helped improve our returns by 20-25%. In the case of minority stake sale, we typically reduce our capital deployed to 5-10% of project cost (compared to 25% if we were to hold 100% equity in the project). For asset sale, we typically sell assets at ~2x book value. The capital released from such capital recycling may be deployed in greenfield bids and new growth opportunities. In April 2022, we finalised a partnership with Mitsui & Co., Ltd., a leading global general trading and investment firm to invest in the RTC renewable energy project being developed by us, with Mitsui taking a 49% stake in the project. In May 2023, we entered into a partnership with PETRONAS’ clean energy subsidiary Gentari, where Gentari purchased a 49% equity stake in our 403 MW Peak Power project. Under the partnership, we invested approximately Rs. 3,130 million (approximately $38 million) for our 51% stake in the project and through our affiliates, will provide EPC, O&M, and project management services for the project. In addition, during Fiscal 2023-24, we sold 400 MW of operating solar assets (100 MW to Technique Solaire and 300 MW to IndiGrid), wherein we realised cash inflow of approximately $104 million (including $8 million to be received against change in law claims) from the asset sales.
Our strategies
Maintain market position as India’s leading clean energy solutions provider
Against the backdrop of supportive regulatory and industry trends in India’s renewable energy sector, we intend to continue to strengthen our market leading position (in terms of total commissioned capacity) in our core utility-scale wind and solar energy businesses, maintain our diversified portfolio between wind and solar energy projects and focus on new geographical clusters to increase our economies of scale. We also aim to continue to be the leader in developing and deploying new technologies in the renewable energy sector. We intend to leverage our experience in executing large wind and solar energy projects to further win bids for firm power energy solutions, which
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places us in a unique position to provide our offtakers innovative energy solutions. We will also look at growth opportunities through corporate PPAs where overall capacity as well as average capacity per site has grown significantly. We believe that our capabilities in group captive and open access projects as well as our ability to deliver multiple solutions to corporate customers, including firm power solutions, will enable us to capture a greater share of this fast-growing market which we consider will be a key renewable energy business in the future.
We will also continue to evaluate accretive acquisition opportunities opportunistically based on our targeted returns, available synergies and offtaker criteria.
Continue to employ prudent bidding approach, financial discipline and efficient capital management to drive value for our shareholders.
Our prudent bidding approach and financial discipline is aimed at achieving pre- determined internal rate of returns from our projects. We have won over 1.25 GW, 1.90 GW and 1.20 GW of new bids in the years ended March 31, 2020, 2021 and 2022, respectively. In the year ended March 31, 2023, we did not win in a large number of bids as it would have resulted in lower IRRs than our target. During Fiscal 2023-24, we have won more than ~8 GW of auctions, of this about 2.15 GW have already been converted to power purchase agreements, as of May 2024. We have also enhanced our capacity in innovative, market defining bids such as round-the-clock, peak power along with regular wind and solar energy projects. We have a systematic bid evaluation framework based on various parameters to optimise for execution capacity and cash flows. In order to maintain this growth rate and to achieve our internal rate of returns, we intend to continue deploying a prudent approach which is backed by thorough diligence and data analysis. We also intend to add to our pipeline of projects. We believe that we are well positioned to enhance our committed capacity at attractive internal rate of returns and be competitive in our bids.
Deepening value chain presence in wind and solar energy projects
We plan to deepen our presence across the core renewable value chain, including the manufacturing of solar modules and cells, EPC and O&M. We manage solar EPC and O&M in-house and have built our capabilities for wind O&M and EPC to improve margins and execution efficiency. We continue to build our in-house transmission capabilities for solar energy projects, relying on our own EPC teams for the development of transmission lines in addition to external EPC providers to further control costs. We are vertically integrated for our solar module supplies, with our 4 GW Jaipur and 2.4 GW Dholera module manufacturing facilities coming online during Fiscal 2023-24 and Fiscal 2024-25 respectively. Further, our 2.5 GW solar cell facility at Dholera will become operational by the year end of Fiscal 2024-25. The plants are currently producing MonoPerc technology but will move to TOPCon during Fiscal 2024-25.
Focus on innovation in hybrid and storage capabilities and invest in future decarbonising solutions
We are investing in our capabilities in new energy storage solutions and associated technologies to provide stability of our wind and solar energy projects and increase our competitiveness and profitability. Our approach to integrate storage solutions aligns well with our broader strategy of incorporating reliable technologies into our projects and Government of India’s innovative tenders for wind, solar and energy storage. We intend to invest in future energy solutions which is a focus of the Government of India. Our strategy is to leverage our renewable capabilities and develop products and establish partnerships across the supply chain to sell it to our end-consumers.
Continue to drive cost reductions and yield improvements through digitization to improve efficiency
We seek to further enhance our project execution efforts in order to control our costs and optimise the output of our projects. At the project execution stage, we continue to focus on reducing our costs by using in-house EPC capabilities for both wind and solar projects. Similarly, we continue to use in-house O&M capabilities at the operational stage to improve project efficiency and reduce costs. We intend to implement new technologies, including new turbine and solar module technologies, which are capable of higher generation levels, as part of this effort. We are incorporating robotic cleaning, auxiliary power consumption, forecast and scheduling and e-surveillance of our plants, as well as utilizing drones and new maintenance technologies as part of enhanced project monitoring and O&M efforts. Our in-house team of technical designers intend to continue refining and enhancing our solar plant design and execution capabilities, and we intend to work with leading wind OEMs to deploy new turbine technologies.
Leading the Path in Sustainable Practices
Our organization's core principles and long-term goals are fundamentally based on sustainability, guiding all aspects of our operations. This means that every decision we make is influenced by a commitment to planet stewardship, social responsibility, and ethical governance. By embedding sustainability into our foundation, we ensure that our growth benefits both our stakeholders and the planet.
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We align our values with global commitments and are proud signatories of
We are progressing towards the release of our first Annual Integrated Report, which adheres to the International Integrated Reporting Council (IIRC) framework and is aligned with Global Reporting Initiative (GRI) standards and International Finance Corporation (IFC) guidelines. This approach ensures a comprehensive and transparent depiction of our strategy, governance, performance, and prospects, encompassing both financial and non-financial aspects of our operations by integrating these facets into a unified narrative.
As a business at the forefront of India’s clean energy transition, we are committed to enhancing our environmental performance through various initiatives. These include installing solar rooftops at our manufacturing units, transforming illumination systems for sustainable hydro business operations, transitioning to electric vehicles (EVs), piloting solar-based power systems for site infrastructure, and implementing advanced solar module cleaning technologies. We are focused on reducing our greenhouse gas emissions and carbon footprint as a signatory to the Business Ambition for 1.5°C Commitment, aiming to achieve net-zero emissions by 2050.
We are a founding member of the First Movers Coalition of the World Economic Forum that brings together pioneering organizations committed to driving innovation and positive change in various global sectors. Our strategic CSR interventions around energy access, digital literacy, women empowerment, and water conservation among others have impacted millions of lives and communities near our operational sites. Implementation of equal opportunity policy, fair treatment of employees, and gender parity initiatives has built an empowered workforce and a culture centred on safety contributing to a cohesive and secure work environment.
In terms of governance, we have established an ESG committee at the Board level to oversee and advise on the company’s ESG strategy and targets, as well as monitor progress towards these goals and is supported by a management-level steering committee led by the Chief Sustainability Officer. Additionally, we have integrated ESG risks into our Enterprise Risk Management system to ensure comprehensive risk oversight and management across the organization.
Our Projects
We are strategically focused on developing a pan-India portfolio of utility-scale wind energy projects, utility-scale solar energy projects, corporate wind energy projects, corporate solar energy projects and utility-scale firm power projects. These projects generate power and feed into the grid, supplying a utility or corporate offtaker with energy. Most of the operational projects have a PPA with a utility or corporate offtaker, guaranteeing a market for its energy for a fixed period of time.
As of May 31, 2024, we had a total operational capacity of 9.52 GW, out of which 8.87 GW is commissioned and 650 MW is generating pre-commissioning revenue through sales in the merchant market, and an additional 6.1 GW of committed capacity. “Commissioned projects” are projects for which a commissioning certificate has been issued and which have already started commercial operations and/or supply power to offtakers. “Committed projects” are projects for which a PPA has been signed for project development.
The following table provides a breakdown of our portfolio of our utility-scale wind energy projects, utility scale solar energy projects, corporate wind energy projects, corporate solar energy projects, hydro power project and utility-scale firm power projects by status (commissioned, committed and pre-commissioning revenue generating) as of March 31, 2024.
Particulars |
Commissioned Capacity |
Committed Capacity |
Pre-Commissioning |
Utility-scale wind energy projects |
3,680 MW |
300 MW |
|
Utility-scale solar energy projects |
3,284 MW |
1,987 MW |
|
Corporate wind energy projects |
391 MW |
455 MW |
|
Corporate solar energy projects |
875 MW |
430 MW |
|
Utility-scale firm power projects |
291 MW |
763 MW |
650 MW |
Other projects |
350 MW |
— |
|
Total |
8,871 MW |
3,934 MW |
650 MW |
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Utility-Scale Wind Energy Projects
The following tables provide a breakdown of our utility-scale wind energy projects by commission status (commissioned and committed) and by offtaker as of March 31, 2024.
Commissioned projects
S.No. |
Project Name |
Location (Indian State) |
Capacity (MW) |
Capacity Commission date, or “COD” (1) |
Tariff Model (2) |
Tariff (Indian Rupees/kWh) |
Offtaker |
PPA tenor (from COD) |
|
1 |
Jasdan |
Gujarat |
25.2 |
Mar-12 |
APPC (8) +REC (9), 3rd Party |
For 23.1MW-APPC (8) Rate escalating in line with State APPC tariff; For 2.1MW- Rs. 3.25/unit |
GUVNL (23.1), Third Party (10) (2.1) |
|
25 years for 23.1 MWs & 10 years (5) for 2.1 MW |
2 |
Vinjalpur |
Gujarat |
12.0 |
Sep-15 |
State PPA (4) |
4.15 |
GUVNL |
25 |
|
3 |
Sadla |
Gujarat |
38.0 |
Mar-17 |
State PPA |
3.86 |
GUVNL |
25 |
|
4 |
Sadla |
Gujarat |
10.0 |
May-17 |
State PPA |
3.86 |
GUVNL |
25 |
|
5 |
Patan |
Gujarat |
50.0 |
Mar-17 |
State PPA |
4.19 |
GUVNL |
25 |
|
6 |
GUVNL |
Gujarat |
35.0 |
Oct-19 |
State PPA |
2.45 |
GUVNL |
25 |
|
7 |
Ellutala |
Andhra Pradesh |
119.7 |
Nov-16 |
State PPA |
4.84+Tax Passthrough (5) |
APSPDCL |
25 |
|
8 |
Veerabhadra |
Andhra Pradesh |
100.8 |
Mar-17 |
State PPA |
4.84+Tax Passthrough (5) |
APSPDCL |
25 |
|
9 |
KCT Gamesa 40 Molagavalli |
Andhra Pradesh |
40.0 |
Feb-17 |
State PPA |
4.84+Tax Passthrough (5) |
APSPDCL |
25 |
|
10 |
KCTGE 39.1 Molagavalli |
Andhra Pradesh |
39.1 |
Aug-16 |
State PPA |
4.83+Tax Passthrough (5) |
APSPDCL |
25 |
|
11 |
KCT Gamesa 24 Kalyandurg |
Andhra Pradesh |
24.0 |
Aug-15 |
State PPA |
4.83+Tax Passthrough (5) |
APSPDCL |
25 |
|
12 |
Molagavalli |
Andhra Pradesh |
46.0 |
Mar-17 |
State PPA |
4.84+Tax Passthrough (5) |
APSPDCL |
25 |
|
13 |
Ostro - |
Andhra Pradesh |
100.0 |
Sep-16 |
State PPA |
4.84+Tax Passthrough (5) |
APSPDCL |
25 |
|
|
Nimbagallu |
|
|
|
|
|
|
|
|
14 |
Ostro - Ralla Andhra |
Andhra Pradesh |
98.7 |
Mar-17 |
State PPA |
4.84+Tax Passthrough (5) |
APSPDCL |
25 |
|
15 |
Ostro - Ralla AP |
Andhra Pradesh |
98.7 |
Mar-17 |
State PPA |
4.84+Tax Passthrough (5) |
APSPDCL |
25 |
|
16 |
Borampalli |
Andhra Pradesh |
50.4 |
Mar-18 |
State PPA |
4.84+Tax Passthrough (5) |
APSPDCL |
25 |
|
17 |
Vaspet-I |
Maharashtra |
25.5 |
Nov-12 |
State PPA |
5.73 |
MSEDCL |
13 |
|
18 |
Vaspet-I |
Maharashtra |
19.5 |
Jan-14 |
State PPA |
5.73 |
MSEDCL |
13 |
|
19 |
Jamb |
Maharashtra |
28.0 |
May-13 |
State PPA |
5.81 |
MSEDCL |
13 |
|
20 |
Jath |
Maharashtra |
34.5 |
Nov-12 |
State PPA |
5.75 |
MSEDCL |
13 |
|
21 |
Jath |
Maharashtra |
50.2 |
Jun-13 |
State PPA |
5.75 |
MSEDCL |
13 |
|
22 |
Vaspet-II & III |
Maharashtra |
49.5 |
Jun-13 |
State PPA |
5.81 |
MSEDCL |
13 |
|
23 |
Welturi-I |
Maharashtra |
50.4 |
Sep-13 |
State PPA |
5.81 |
MSEDCL |
13 |
|
24 |
Budh-I |
Maharashtra |
30.0 |
Feb-14 |
State PPA |
5.81 |
MSEDCL |
13 |
|
25 |
Welturi-II |
Maharashtra |
23.1 |
Mar-14 |
State PPA |
5.81 |
MSEDCL |
13 |
|
26 |
Vaspet-IV |
Maharashtra |
49.5 |
Nov-14 |
State PPA |
5.79 |
MSEDCL |
13 |
|
27 |
MSEDCL Bid |
Maharashtra |
76.0 |
Dec-19 |
State PPA |
2.85 |
MSEDCL |
25 |
|
28 |
Bakhrani |
Rajasthan |
14.4 |
Mar-13 |
State PPA |
5.39(6) |
JVVNL |
25 |
|
29 |
Dangri |
Rajasthan |
30.0 |
Oct-14 |
State PPA |
5.78(7) |
AVVNL |
25 |
|
30 |
Pratapgarh |
Rajasthan |
46.5 |
Mar-15 |
State PPA |
6.08(7) |
JVVNL, AVVNL |
25 |
|
31 |
Pratapgarh |
Rajasthan |
4.5 |
Jul-15 |
State PPA |
6.08(7) |
JVVNL, AVVNL |
25 |
|
31 |
Rajgarh |
Rajasthan |
25.6 |
Oct-15 |
State PPA |
5.88(7) |
AVVNL |
25 |
|
33 |
Bhesada |
Rajasthan |
100.8 |
Dec-15 |
State PPA |
5.88(7) |
JdVVNL |
25 |
|
34 |
Ostro – Tejuva |
Rajasthan |
50.4 |
Jul-15 |
State PPA |
5.88(7) |
JdVVNL |
25 |
|
35 |
Ostro – Rajgarh |
Rajasthan |
25.6 |
Oct-15 |
State PPA |
5.88(7) |
AVVNL |
25 |
|
36 |
SREI |
Rajasthan |
60.0 |
May-12 |
State PPA |
4.74(6) |
JVVNL, AVVNL |
20-25 |
|
37 |
Batkurki |
Karnataka |
60.0 |
Jan-17 |
State PPA |
4.50+Tax Passthrough (5) |
HESCOM |
25 |
|
38 |
Bableshwar |
Karnataka |
50.0 |
Mar-17 |
State PPA |
4.50+Tax Passthrough (5) |
HESCOM |
25 |
|
39 |
Ostro – Sattegiri |
Karnataka |
60.0 |
Mar-17 |
State PPA |
4.50+Tax Passthrough (5) |
HESCOM |
25 |
|
40 |
Ostro – Taralkatti |
Karnataka |
100.0 |
Feb-18 |
State PPA |
4.50+Tax Passthrough (5) |
GESCOM |
25 |
|
40 |
Bableshwar 2 |
Karnataka |
40.0 |
Mar-18 |
State PPA |
3.74+Tax Passthrough (5) |
BESCOM |
25 |
|
41 |
Bapuram |
Karnataka |
50.0 |
Mar-18 |
State PPA |
3.74+Tax Passthrough (5) |
GESCOM |
25 |
|
42 |
Nirlooti |
Karnataka |
60.0 |
Mar-18 |
State PPA |
3.74+Tax Passthrough (5) |
GESCOM |
25 |
|
43 |
Kushtagi – 1 |
Karnataka |
71.4 |
Mar-18 |
State PPA |
3.72+Tax Passthrough (5) |
HESCOM, GESCOM |
25 |
|
44 |
Nipaniya |
Madhya Pradesh |
40.0 |
Feb-16 |
State PPA |
5.92 |
MPPMCL |
25 |
|
45 |
Mandsaur |
Madhya Pradesh |
28.8 |
Oct-15 |
State PPA |
5.69 |
MPPMCL |
25 |
|
46 |
Mandsaur |
Madhya Pradesh |
7.2 |
Mar-17 |
State PPA |
5.69 |
MPPMCL |
25 |
|
47 |
Kod and Limbwas |
Madhya Pradesh |
90.3 |
Mar-16 |
State PPA |
5.92 |
MPPMCL |
25 |
|
48 |
Amba-1 |
Madhya Pradesh |
44.0 |
Mar-17 |
State PPA |
4.78 |
MPPMCL |
25 |
|
49 |
Amba-2 |
Madhya Pradesh |
8.0 |
Mar-17 |
State PPA |
4.78 |
MPPMCL |
25 |
|
50 |
Limbwas 2 |
Madhya Pradesh |
18.0 |
Oct-16 |
State PPA |
4.78 |
MPPMCL |
25 |
|
51 |
Lahori |
Madhya Pradesh |
26.0 |
Mar-17 |
State PPA |
4.78 |
MPPMCL |
25 |
|
52 |
Ostro – Lahori |
Madhya Pradesh |
92.0 |
Mar-16 |
State PPA |
5.92 |
MPPMCL |
25 |
|
53 |
Ostro – Amba |
Madhya Pradesh |
66.0 |
Mar-16 |
State PPA |
5.92 |
MPPMCL |
25 |
|
54 |
Ostro – AVP Dewas |
Madhya Pradesh |
27.3 |
Mar-17 |
State PPA |
4.78 |
MPPMCL |
25 |
|
55 |
Ostro – Badoni Dewas |
Madhya Pradesh |
29.4 |
Mar-17 |
State PPA |
4.78 |
MPPMCL |
25 |
|
56 |
Ostro – Kutch (SECI 1) |
Gujarat |
250.0 |
Oct-18 |
Center PPA (3) |
3.46 |
PTC |
25 |
|
57 |
SECI II |
Gujarat |
230.1 |
Oct-19 |
Center PPA |
2.64 |
SECI |
25 |
|
58 |
SECI 6 |
Karnataka |
199.5 |
Dec-21 |
Center PPA |
2.82 |
SECI |
25 |
|
59 |
SECI 7 |
Gujarat |
50.6 |
Feb-22 |
Center PPA |
2.81 |
SECI |
25 |
|
60 |
SECI 3 |
Gujarat |
300.0 |
Dec-20 |
Center PPA |
2.44 |
SECI |
25 |
|
|
|
|
3,680.2 |
|
|
|
|
|
|
Notes:
45
Committed projects
|
Project |
Location (Indian |
Capacity |
Capacity Commission |
Tariff |
Tariff (Indian |
|
PPA tenor |
PPA or |
S.No. |
Name |
State) |
(MW) |
date, or “COD” (1) |
Model (2) |
Rupees/kWh) |
Offtaker |
(from COD) |
LOA (4) |
1 |
SECI XI |
Karnataka |
300.0 |
In the second half of the year ending March 31, 2026 |
Center PPA (3) |
2.69 |
SECI |
25 |
PPA Signed |
|
|
|
300 |
|
|
|
|
|
|
Notes:
46
Utility-Scale Solar Energy Projects
The following tables provide a breakdown of our utility-scale solar energy projects by commission status (commissioned and committed) and offtaker as of March 31, 2024.
Commissioned projects
|
|
Location |
Capacity |
Capacity Commission |
Tariff |
Tariff |
|
PPA tenor |
|
Project Name |
(Indian State) |
(MW) |
date, or “COD” (1) |
Model (2) |
(Indian Rupees/kWh) |
Offtaker |
(from COD) |
1 |
Charanka |
Gujarat |
40.0 |
Mar-17 |
Center PPA (3) |
4.43 |
SECI |
25 |
2 |
Bhadla |
Rajasthan |
50.0 |
Apr-19 |
Center PPA |
2.49 |
SECI |
25 |
3 |
Mahbubnagar 2 |
Telangana |
100.0 |
Nov-17 |
Center PPA |
4.66 |
NTPC |
25 |
4 |
Pavagada |
Karnataka |
50.0 |
Dec-17 |
Center PPA |
4.8 |
NTPC |
25 |
5 |
Ostro - Rajasthan |
Rajasthan |
60.0 |
Nov-17 |
Center PPA |
5.07 |
NTPC |
25 |
6 |
VS- Lexicon |
Rajasthan |
10.0 |
Feb-13 |
Center PPA |
8.69 |
NTPC |
25 |
7 |
VS- Symphony |
Rajasthan |
10.0 |
Feb-13 |
Center PPA |
8.48 |
NTPC |
25 |
8 |
Sheopur |
Madhya Pradesh |
50.0 |
Jun-15 |
State PPA (4) |
6.97 |
MPPMCL |
25 |
9 |
MPSolar II |
Madhya Pradesh |
51.0 |
Oct-17 |
State PPA |
5.46 |
MPPMCL |
25 |
10 |
Adoni |
Andhra Pradesh |
39.0 |
Mar-16 |
State PPA |
Rs. 5.98/unit for 1st year with escalation of 3% until 10th year, from 11th to 25th year 10th year tariff will apply |
APSPDCL |
25 |
11 |
Cumbum |
Andhra Pradesh |
21.0 |
Mar-16 |
State PPA |
Rs. 5.98/unit for 1st year with escalation of 3% until 10th year, from 11th to 25th year 10th year tariff will apply |
APSPDCL |
25 |
12 |
Mehbubnagar -1 |
Telangana |
100.0 |
May-16 |
State PPA |
6.73 |
TSSPDCL |
25 |
13 |
Sadashivpet |
Telangana |
24.0 |
Jun-16 |
State PPA |
6.8 |
TSSPDCL |
25 |
14 |
Dichipally |
Telangana |
143.0 |
Jun-17 |
State PPA |
5.59 |
TSNPDCL |
25 |
15 |
Mandamarri |
Telangana |
48.0 |
Feb-17 |
State PPA |
5.59 |
TSNPDCL |
25 |
16 |
Minpur |
Telangana |
65.0 |
Jun-17 |
State PPA |
5.59 |
TSSPDCL |
25 |
17 |
Mulkanoor |
Telangana |
30.0 |
Mar-17 |
State PPA |
5.59 |
TSNPDCL |
25 |
18 |
Ostro - Wanaparthy |
Telangana |
50.0 |
Sep-17 |
State PPA |
5.59 |
TSSPDCL |
25 |
19 |
Acquisition - Telangana |
Telangana |
260.0 |
Jun-17 |
State PPA |
5.65 |
TSNPDCL, TSSPDCL |
25 |
20 |
Alland |
Karnataka |
20.0 |
Mar-17 |
State PPA |
4.86 |
BESCOM |
25 |
21 |
Bhalki |
Karnataka |
20.0 |
Mar-17 |
State PPA |
4.85 |
BESCOM |
25 |
22 |
Chincholi |
Karnataka |
20.0 |
Apr-17 |
State PPA |
4.84 |
BESCOM |
25 |
23 |
Siruguppa |
Karnataka |
20.0 |
Mar-17 |
State PPA |
4.76 |
HESCOM |
25 |
24 |
Humnabad |
Karnataka |
20.0 |
Mar-17 |
State PPA |
4.86 |
HESCOM |
25 |
25 |
Devdurga |
Karnataka |
20.0 |
Sep-17 |
State PPA |
4.76 |
MESCOM |
25 |
26 |
Honnali |
Karnataka |
20.0 |
Nov-17 |
State PPA |
5.05 |
BESCOM |
25 |
27 |
Turuvekere |
Karnataka |
20.0 |
Nov-17 |
State PPA |
4.84 |
BESCOM |
25 |
28 |
Yadgir |
Karnataka |
20.0 |
Oct-17 |
State PPA |
4.85 |
BESCOM |
25 |
29 |
Kar 40bid (2) |
Karnataka |
40.0 |
Oct-19 |
State PPA |
3.22 |
MESCOM, BESCOM, GESCOM, CESC |
25 |
30 |
VS-Star Solar |
Rajasthan |
5.0 |
Jul-15 |
State PPA |
6.45 |
RREC |
25 |
31 |
VS-Sun Gold |
Rajasthan |
5.0 |
Jul-15 |
State PPA |
6.45 |
RREC |
25 |
32 |
Mah Ph I |
Rajasthan |
250.0 |
Oct-19 |
State PPA |
2.72 |
MSEDCL |
25 |
33 |
Mah PhII |
Rajasthan |
300.0 |
Nov-21 |
State PPA |
2.75 |
MSEDCL |
25 |
34 |
TN 100 |
Tamil Nadu |
100.0 |
Sep-19 |
State PPA |
3.47 |
TANGEDCO |
25 |
35 |
GUVNL |
Gujarat |
105.0 |
Apr-21 |
State PPA |
2.68 |
GUVNL |
25 |
36 |
SECI III |
Rajasthan |
300.0 |
Aug-21 |
Center PPA |
2.55 |
SECI |
25 |
37 |
SECI Raj |
Rajasthan |
110.0 |
Feb-21 |
Center PPA |
2.49 |
SECI |
25 |
38 |
SECI IV |
Rajasthan |
300.0 |
Dec-21 |
Center PPA |
2.54 |
SECI |
25 |
39 |
SECI IX |
Rajasthan |
388.0 |
Mar-24 |
Center PPA |
2.37 |
SECI |
25 |
|
Total |
|
3,284.0 |
|
|
|
|
|
Notes:
47
Committed projects
|
|
|
|
|
|
Tariff |
|
|
|
|
|
Location |
|
Capacity Commission date, or |
Tariff |
(Indian |
|
PPA tenor |
|
S.No. |
Project Name |
(Indian State) |
Capacity (MW) |
“COD” (1) |
Model (2) |
Rupees/kWh) |
Offtaker |
(from COD) |
PPA or LOA (5) |
1 |
SECI Raj IV |
Rajasthan |
975.0 |
In the second half of the year ending March 31, 2025 |
Center PPA (3) |
2.18 |
SECI |
25 |
PPA Signed |
2 |
PSPCL |
Rajasthan |
100.0 |
In the first half of the year ending March 31, 2026 |
State PPA (4) |
2.33 |
PSPCL |
25 |
PPA Signed |
3 |
GUVNL XIX |
Rajasthan |
400.0 |
In the first half of the year ending March 31, 2026 |
State PPA |
2.71 |
GUVNL |
25 |
PPA Signed |
4 |
SECI VIII |
Rajasthan |
200.0 |
In the second half of the year ending March 31, 2025 |
Center PPA |
2.51 |
SECI |
25 |
PPA Signed |
5 |
SECI IX |
Rajasthan |
312.0 |
In the second half of the year ending March 31, 2025 |
Center PPA |
2.37 |
SECI |
25 |
PPA Signed |
|
Total |
|
1,987 MW |
|
|
|
|
|
|
Notes:
Utility-Scale Firm Power Projects
S. No. |
Project Name |
Location (Indian State) |
Capacity (MW) |
Status |
Capacity Commission Date, or “COD” (1) |
Tariff Model(2) |
Tariff (Indian Rupees/kWh) |
Offtaker |
Type |
PPA tenor (from COD) |
1 |
PP-1 |
Karnataka |
322.0 |
270 MW – Generating pre- commissioning revenue 52 MW - Committed |
In the second half of the year ending March 31, 2025 |
Center PPA |
Off Peak(4) - 2.88 Peak(4) - 6.85 |
SECI |
Wind |
25 |
2 |
PP-1 |
Karnataka |
81.0 |
Committed |
In the second half of the year ending March 31, 2025 |
Center PPA |
SECI |
Solar |
25 |
|
3 |
RTC-1 |
Karnataka |
601.0 |
291.1 MW - Commissioned
309.9 - Committed |
291.1 MW – In the third & fourth quarter of year ended March 31, 2024 309.9 MW - by the second half of the year ending March 31, 2025 |
Center PPA |
Rs. 2.90/unit for 1st year with escalation of 3% until 15th year, from 16th to 25th year 15th year tariff will apply |
SECI |
Wind |
25 |
4 |
RTC-1 |
Maharashtra |
300.0 |
Committed |
By the second half of the year ending March 31, 2025 |
Center PPA |
SECI |
Wind |
25 |
|
5 |
RTC-1 |
Rajasthan |
400.0 |
380 MW – Generating pre-commissioning revenue 20 MW - Committed |
In the first half of the year ending March 31, 2025 |
Center PPA |
SECI |
Solar |
25 |
|
|
Total |
|
1,704.0 |
|
|
|
|
|
|
|
Notes:
48
Corporate Projects
The following tables provide a breakdown of our corporate solar and wind energy projects by commission status (commissioned and committed) as of March 31, 2024.
Corporate Wind Energy Commissioned Projects
|
|
Location |
Capacity |
Capacity Commission |
|
|
|
PPA tenor (from |
|
S.No. |
Project Name |
(Indian State) |
(MW) |
|
date, or “COD” (1) |
Tariff Model (2) |
Tariff (Indian Rupees/kWh) |
Offtaker |
COD) |
|
|
|
|
|
|
|
|
|
|
1 |
Various Corporate Wind Projects (4) |
Various |
391.4 |
|
Feb-13-Mar-23 |
Third Party (3) |
3.35 – 6.58 |
Multiple |
10-25 |
|
Total |
|
391.4 |
|
|
|
|
|
|
Notes:
Corporate Wind Energy Committed Projects
S.No. |
|
Project Name |
Location (Indian State) |
Capacity (MW) |
Capacity Commission date, or “COD” (1) |
Tariff Model (2) |
Tariff (Indian Rupees/kWh) |
Offtaker |
PPA tenor (from COD) |
PPA or LOA (3) |
1 |
|
Other Corporate Projects(3) |
Multiple |
454.5 |
Between the first half of the year ending March 31, 2025 and the second half of the year ending March 31, 2027 |
Third Party |
3.31 – 3.81 |
Third Party |
10-25 |
PPA/Contract Signed |
|
Total |
|
|
454.5 |
|
|
|
|
|
|
Notes:
Corporate Solar Energy Commissioned projects
|
|
|
|
Capacity |
|
|
|
|
|
|
Location (Indian |
|
Commission date, or |
|
|
|
PPA tenor |
S.No. |
Project Name |
State) |
Capacity (MW) |
“COD” (1) |
Tariff Model (2) |
Tariff (Indian Rupees/kWh) |
Offtaker |
(from COD) |
|
|
|
|
|
|
|
|
|
|
Solar Corporate |
|
|
|
|
|
|
|
1 |
Projects (3) |
Multiple |
875.0 |
Jan17-Feb-23 |
Third Party |
2.81 – 5.85 |
Third Party |
10 |
|
Total |
|
875.0 |
|
|
|
|
|
Notes:
Corporate Solar Energy Committed projects
S.No. |
Project |
Location (Indian State) |
Capacity (MW) |
Capacity Commission date, or “COD” (1) |
Tariff Model (2) |
Tariff (Indian Rupees/kWh) |
Offtaker |
PPA tenor (from COD) |
PPA or LOA (3) |
1 |
Corporate Projects (3) |
Multiple |
430.3 |
Between the second half of the year ending March 31, 2025 and the second half of the year ending March 31, 2026 |
Third Party |
3.16 – 3.81 |
Third Party |
20-25 |
PPA/Contract Signed |
|
Total |
|
430.3 |
|
|
|
|
|
|
49
Notes:
Other Projects
|
|
|
|
Location (Indian |
|
Capacity |
|
Capacity Commission |
|
|
|
Tariff (Indian |
|
|
|
PPA tenor |
|
S.No. |
|
Project Name |
|
State) |
|
(MW) |
|
date, or “COD” (1) |
|
Tariff Model (2) |
|
Rupees/kWh) |
|
Offtaker |
|
(from COD) |
|
1 |
|
Other Commissioned Projects(4) |
|
Multiple |
|
349.8 |
|
July, 2022(3) |
|
Merchant |
|
IEX |
|
Merchant |
|
— |
|
|
|
Total |
|
|
|
349.8 |
|
|
|
|
|
|
|
|
|
|
|
Notes:
Offtakers
We define offtakers as parties with whom we have signed a PPA or from whom we have received a LOA. We define customers as parties to whom we supply power from our commissioned projects under our PPAs with them and are eligible to receive tariffs from them.
We sell electricity to central and state government agencies, public utilities, private industrial and commercial offtakers (that includes consumers under the group captive scheme in India). Under the group captive scheme, applicable to industrial and commercial offtakers, a group of offtakers collectively own 26% equity interest in the power plant and have collectively committed to purchase at least 51% of the power generated at the power plant.
Of our total offtaker base as of March 31, 2024, government agencies and public utilities constituted approximately 81%, private industrial and commercial offtakers constituted approximately 16% while merchant constituted approximately 3%. For the year ended March 31, 2024, one customer, which is a state distribution company accounted for more than 10% of our revenue. See the section titled “Business Overview — Power purchase agreements” under Item 4.B below for more details on the terms of our PPAs with our offtakers, including these customers.
The following table sets forth our offtaker profile as a percentage of our total capacity as of March 31, 2024.
Total Capacity (commissioned and committed) |
|
% |
|
Central Agency (SECI/PTC/NTPC) |
|
44.14 |
% |
State |
|
|
|
Andhra Pradesh (1) |
|
5.78 |
% |
Gujarat (2) |
|
5.02 |
% |
Karnataka (3) |
|
5.29 |
% |
Maharashtra (4) |
|
7.33 |
% |
Madhya Pradesh (5) |
|
4.30 |
% |
Rajasthan (6) |
|
2.73 |
% |
Telangana (7) |
|
5.35 |
% |
Tamil Nadu (8) |
|
0.74 |
% |
Punjab (11) |
|
0.74 |
% |
Third Party (9) |
|
15.99 |
% |
Others (10) |
|
2.60 |
% |
Total |
|
100 |
% |
Notes:
50
Power purchase agreements
We sign long-term PPAs with central and state-run utilities, government-backed corporations and private commercial and industrial users. The long-term PPAs for our projects enhance the offtake security and long-term visibility of our revenues. As of March 31, 2024, our PPAs for our utility-scale projects had an average term of more than 24 years.
For our utility-scale wind and solar energy projects and our utility-scale firm power projects, our PPAs with central government and DISCOMs typically have a term of 25 years. As of March 31, 2024, all of our PPAs with central government agencies had a term of 25 years, while the PPAs with state DISCOMs had a term of 24.1 years. Similarly, our PPAs with private commercial and industrial users have a term ranging from eight to 25 years.
Our PPAs for utility-scale include, among other things, restrictions on contracted capacity and changes in management and ownership of our project subsidiary undertaking the relevant project (including changes in the specified minimum equity shareholding of the relevant holding company or selected bidder in such project subsidiary).
Events of default under our PPAs typically include failure or delay in commissioning, failure to supply power post the commercial operation date, failure to supply the minimum contracted power as defined in the relevant PPA, inability to meet our performance guarantees, assignment or transfer of assets or rights under the PPAs in contravention of the terms thereof, liquidation, our project subsidiary’s insolvency or similar events, and failure to operate and maintain our projects in accordance with the terms of the PPAs. Upon the occurrence of an event of default, we may face adverse consequences such as specific performance of the PPAs, termination of the PPAs, payment of liquidated damages, imposition of penalties, and exercise of step-in rights by our lenders or rights to replace the relevant holding company/selected bidder or our project subsidiary as operator of the project. Most of our PPAs also provide for relief to the party affected in the event of a change in law or a force majeure.
Tariff
Tariff rates for our PPAs for utility-scale wind energy projects, utility-scale solar energy projects and our utility-scale firm power projects are determined through bidding regime, feed-in tariffs mechanism, or are bilaterally agreed with third-party offtakers. The majority of our PPAs provide for fixed tariff rates. Under a few PPAs, the tariff is subject to escalation provisions.
Bidding
The bidding process for capacity allocations by government agencies is typically conducted in two stages. In the first stage, eligible and prospective bidders are shortlisted. In the second stage, the shortlisted bidders take part in a live online reverse auction to bid for capacity by submitting tariff bids. The bidder quoting the lowest bid is selected.
The objective of the first stage is to identify credible bidders who have the requisite technical and financial capacity to undertake the project. The bid documents, include a draft of the PPA and other information on the project which is provided to every bidder on payment of a processing fee. In addition to the processing fee, a bidder is typically required to deposit a bid security amount in the form of a demand draft or a bank guarantee.
51
The information sought from the bidders in the first stage is generally restricted to technical and financial capabilities that are relevant to the project. For a bidding consortium, the financial eligibility criteria are typically fulfilled by the lead member or parent company of the lead member, while the technical eligibility criteria are fulfilled by consortium members. Only those applicants that are shortlisted after the first stage are invited to participate in the second stage of the bidding process. The number and nature of the bidders shortlisted for the second stage are based on, among other things, initial bid tariffs and quantity of bidders.
Bidders are typically required to conduct their own surveys, investigations and other detailed examination of the project before submitting their bids, including ascertaining the site conditions, evacuation feasibility, location, surroundings, climate, availability of power, water and other utilities for construction, site access, handling and storage of materials and weather data.
Bid assessment
We utilise a multi-pronged process to effectively track all bid policies and bid updates in the public domain. Once a tender is identified, the relevant information about the bid is discussed with our finance, regulatory and technical teams. Before we submit the bid, it is approved by the investment committee. Our bid approval process begins with the proposal being prepared by our business development team. The proposal would typically list the key assumptions that we take into account for projections which are based on historical performance and the current trends in capex, procurement, financing, etc. The proposal is evaluated independently by our finance, execution, land, regulatory, O&M and other relevant teams. In addition, the bid proposal will then be reviewed by our investment team which is led by the CFO. Once the assumptions have been vetted, a 7-member senior management committee further reviews the proposal.
A number of factors are considered in our assessment of potential bids, including the credit rating of the offtaker, ease of doing business in the relevant state where the project is envisaged to be set up, availability and ownership of land, soil conditions and variability, solar irradiation levels, wind speeds and PLFs (if wind component is present) at the location of the project, land and capital costs, payment cycles, ease of construction, required wind turbine size, climate, topography and other location coordinates. We also evaluate the opportunity on the basis of the capacity being offered, grid connectivity and evacuation infrastructure, including assessing distance to the nearest substations and the capacity of the substations to evacuate the power produced.
As part of all stages of project and bid assessment, we conduct financial evaluations to determine asset and equity rates of return, expected project cost, sensitivity analysis based on realizable tariffs, financing costs and O&M costs. We only bid for projects that we consider will meet internally determined rate of return thresholds commensurate with the risk profile of the bids. If a bid is won, a LOA is issued and then the PPA is signed.
Investments
We use the same approach in assessing potential bids to assess proposed investments in existing projects. Financial, tax, land, technical and legal due diligence is conducted on the relevant asset. Each project under consideration is further evaluated by our internal development and O&M teams, as well as by external consultants. Assessments of project design performance are evaluated against the project’s historical performance. Current and future performance risks are also assessed. A detailed review is conducted to assess additional capital expenditure and operating expenditures required for the residual lifespan of the specific project. The proposal is then sent to the investment committee and, subsequently, to the Board for their approval. Once approved, investments are continuously monitored.
FiT
Generally, the renewable energy landscape in India has shifted away from a FiT structure to an auction bidding structure, we maintain internal protocols which help guide our FiT assessment for many of our utility-scale wind energy projects.
For projects on a turnkey model, we analyse the asset proposal from the relevant OEM supplier, which generally includes an energy yield estimation report, site suitability reports, on-site wind mast data, evacuation details and indicative project cost. A preliminary assessment of OEM assumptions is carried out based on our experience and market intelligence in the relevant region. We then evaluate power evacuation feasibility and the available wind resource data in-house. We also assess the impact of the current regulatory and policy framework.
The proposal prepared by the business team is analysed and tested against relevant technical, legal and financial considerations by a subgroup reporting to an investment committee. With the investment committee’s approval, we sign the term sheet and engage with external parties to conduct wind and evacuation infrastructure studies. Aspects covered include land profile, land access, evacuation feasibility, expected site plant load factor (the ratio of average power generated by the power plant to the maximum power that could have been generated within a period of time), grid availability and potential execution, regulatory and other risks.
52
After negotiating the preliminary commercial terms with the OEM and accounting for information related to wind resource, evacuation and execution as well as off-taker credit profile, if the proposed FiT based project is deemed viable based on the above factors, our investment committee may grant its final approval for the project.
Renewable energy certificates, or “RECs”
Renewable energy developers, such as us, also have the option to sell the power to state utilities at preferential tariff as set by the state regulator or at the average power purchase cost, or “APPC,” and sell the green component separately in the form of RECs. The CERC in India has issued terms and conditions for recognition and issuance of RECs. In the REC mechanism, the electricity and the green component are accounted for separately. The project developer can sell the power to an off -taker or to a third-party/captive consumer at a mutually negotiated price, while selling the REC component separately in the market. RECs are available for entities to procure based on APPC which is the weighted average cost of procurement of a distribution utility from all sources except short-term power and renewable power. One REC is issued to renewable energy generators for every MWh of electricity fed to the grid and metered at the bus-bar of the generator for projects set up under the REC scheme, and the two products, one being the attributes embodied in the REC and the other being the electricity itself, may be sold or traded separately. REC trading occurs on a monthly basis, while the pricing range for RECs regulated through a floor and a ceiling price set by the Indian regulator from time to time. When a REC is purchased, the owner is considered to have purchased renewable energy. Distribution utilities and customers can therefore fulfil their renewable energy purchase obligations by purchasing RECs. As per the REC Regulations, RECs issued are valid until they are redeemed.
Equipment Suppliers
We acquire key equipment such as turbines and solar modules from a diverse group of leading suppliers as highlighted in the tables below. We have rigorous vendor evaluation and quality control processes for equipment procurement to high standards. We analyse the wind data (for wind energy projects) or irradiation data (for solar energy projects) from each project site in order to determine the specifications of the equipment we require and engage with equipment suppliers accordingly. We typically assess an equipment contract based on price, warranty and insurance programs, equipment degradation rate, technical support and the reputation of the supplier, among other factors.
We typically enter into master contractual arrangements with our major suppliers that define the general terms and conditions of our purchases, including warranties, product specifications, indemnities, delivery and other customary terms. We normally purchase solar module panels and the balance of plant components on an as-needed basis from our suppliers at the then prevailing prices pursuant to purchase orders issued under our master contractual arrangements. We generally do not have any supplier arrangements that contain long-term pricing or volume commitments, although at times in the past we have made limited purchase commitments to ensure sufficient supply of components.
Suppliers for utility-scale wind energy projects
Operating equipment for utility-scale wind energy projects primarily consists of turbines, inverters, transformers. Costs for turbine typically represent majority of our utility -scale wind energy project investment costs. Our turbine supply strategy is largely based on developing strong relationships and establishing framework agreements with leading turbine suppliers. The following table sets forth our OEM suppliers for wind turbines based on contracted capacity as of March 31, 2024:
Wind Energy Projects - Contracted Capacity (1) |
(%) (2) |
|
Siemens Gamesa Renewable Power Private Limited |
38.6 |
% |
Suzlon Energy Limited |
19.0 |
% |
Envision Energy International Limited, Hongkong |
12.7 |
% |
Vestas Wind Technology India Pvt. Ltd |
8.0 |
% |
GE India Industrial Pvt. Ltd |
6.8 |
% |
Inox Wind Limited |
5.1 |
% |
ReGen Powertech Private Limited |
4.9 |
% |
Wind World (India) Limited |
3.2 |
% |
Senvion Wind Technology Pvt Ltd. |
1.2 |
% |
Kenersys India Private Limited |
0.6 |
% |
Total |
100 |
% |
Notes:
53
Suppliers for utility-scale solar energy projects
Operating equipment for solar energy projects primarily consists of solar module panels, inverters, cables, solar mounting structures, trackers, transformers and evacuation systems. We purchase major components such as solar module panels and inverters directly from multiple manufacturers. There are several suppliers in the market and we select our suppliers based on expected cost of equipment purchased, reliability, warranty coverage, ease of installation and other ancillary costs. The following table sets forth our OEM suppliers for solar panels based on contracted capacity as of March 31, 2024:
Utility-Scale Solar Energy Projects |
(%)(1) |
|
Self-Supply |
32.2 |
% |
Longi Solar Technology Co. Ltd. |
20.4 |
% |
JA Solar International Limited |
11.9 |
% |
Jinko Solar Co., Ltd |
6.0 |
% |
Hareon International Co., Limited |
4.1 |
% |
Canadian Solar International Limited |
3.8 |
% |
Talesun Solar |
3.4 |
% |
Risen Energy Co. Ltd. |
2.7 |
% |
ZNShine PV-Tech Co. Ltd. |
2.5 |
% |
Hanwha Q Cells (QIDONG) Co. Ltd. |
2.0 |
% |
Trina Solar Energy Development Pte Ltd. |
1.8 |
% |
Jinergy Solar |
1.7 |
% |
First Solar FE Holdings Pte. Ltd. |
1.7 |
% |
Vikram Solar Limited |
1.6 |
% |
BYD Company Limited |
1.3 |
% |
GCL System Integration Technology Co Ltd. |
1.2 |
% |
Renesola Singapore Pte Ltd. |
0.9 |
% |
Goldi Sun Pvt Ltd |
0.8 |
% |
Yingli Solar |
0.1 |
% |
Total |
100 |
% |
Notes:
54
Project Value Chain
There are several key activities that occur sequentially or concurrently before and throughout a project development cycle. The following chart provides a snapshot of our project development cycle.
Review of data and resource assessment
We conduct wind or solar resource assessments of a proposed project site to estimate the annual energy production of a project using a variety of wind and solar resource assessment tools, including both in-house and third-party resources. An initial assessment of favourable wind and solar resource potential is conducted for each potential site by reviewing publicly available wind and solar maps. Our in-house assessment teams use wind and solar flow modelling tools to estimate potential wind speeds, irradiation levels and other indicators of energy levels. We also engage with wind resource assessment firms to conduct and validate our own wind resource assessments and use solar GIS and meteonorm for solar assessment. Generally, solar resource is significantly more uniform and predictable than wind resource. The databases and software publicly available for assessing solar resource are substantially comprehensive, reflecting a higher degree of accuracy than analogous sources typically provide for wind resource. Accordingly, we find available databases and software to be substantially adequate for all of our solar resource assessment purposes.
Land procurement
The land acquisition process is generally administered and managed by our in-house land team, working with third-party aggregators or developers and EPC contractors, once a project site is identified and assessments and studies are completed. Most of our new projects are on private land and in cases of allotment of land by government, we closely work with the government to mitigate any delay in land allotment. Generally, the land procurement process begins with land assessment and feasibility studies even before development of a given project commences. Upon successfully winning a bid, we commence the process to secure land titles or attain the relevant land rights for land needed to construct and operate our projects, including those associated with turbines or solar plants.
We generally enter into conveyance deeds with landowners to secure the necessary title to build on the site, including meteorological masts, roads, electric lines and substations, turbines or solar plant and O&M and other associated facilities. Ownership of each project site (apart from government revenue land or forest land under Indian law wherein we enter into long-term leases) allows us to facilitate our efforts to ensure wind energy project optimization to maximise power generation. Further, we obtain necessary approvals such as, conversion certificates from the relevant government departments using land for non-agricultural purposes, forest clearances and environmental approvals, as applicable. Occasionally, such as in case of solar parks, the developer is solely responsible for land acquisition and various approvals. See also the section titled “Business Overview — Financing” under Item 4.B for more details.
55
Approvals
Upon identifying and acquiring or leasing the land needed for our projects, we begin the approvals process with relevant local and state agencies. For certain types of approvals, the process continues throughout the various stages of project development. The approvals process includes identifying required permits, holding preliminary meetings with relevant state and central agencies and stakeholder groups, determining and conducting relevant project studies, preparing permits and disclosure reports, participating in public meetings, and responding to information requests and seeking project approvals from the state or central government bodies.
Financing
Funding for our projects is typically obtained during both the development and operational phases. In the development phase, we typically fund projects through external long- term project construction financing and financing through group capital resources, either debt or equity. Before we commence the construction of a project, we typically arrange for funds for the project which significantly de-risks the project. Once the project is commissioned, we typically refinance the debt at lower interest rates, and/or with longer tenure and increased borrowing limits similar to stable projects. Such refinancing of projects allows us to recycle liquidity for our committed projects.
We obtain debt for our projects from multiple sources such as commercial banks (both state owned and private sector banks in India), non-banking financial companies, infrastructure debt funds, domestic and international capital markets, and development finance institutions that have the expertise to evaluate the risks associated with the construction and operation of a renewable energy project, including evaluation of the equipment technology, construction, operation and wind and/or solar resources. Few of our projects also include equity investments from third parties.
Transmission and interconnection
Since the availability of transmission infrastructure and access to a power grid or network is critical to a project’s feasibility, we evaluate the power evacuation capacity available at the nearby sub-stations, using our in-house expertise and from publicly available sources. Once we determine that the necessary transmission infrastructure is available or will be available once a project is commissioned, we undertake the necessary steps to establish a connection with the grid network. This process typically involves submitting various application with relevant public utilities, independent system operator and local electric utility. Power from our wind and solar energy projects is typically evacuated to the relevant grids through high voltage 33/66/110/132/220/400 kV transmission lines from dedicated pooling stations, which results in stable energy transmission and minimises grid instability and losses.
Equipment procurement
We have a rigorous quality assurance and vendor empanelment process, with a limited number of approved module suppliers, and in -line supervision and third-party testing of modules. We have master contractual arrangements with our top suppliers. For further details, see the section titled “Business Overview — Equipment Suppliers” under Item 4.B above.
Construction and commissioning
For our utility-scale wind energy projects, construction consists of turbine installations and the rest of the facility (referred to as the “balance of plant”) which includes transmission lines and the substation. For wind energy projects, there has been a gradual shift from the turnkey EPC contracts model to the in-house EPC model and we have not engaged third-party EPCs for the last three years. Under our turnkey EPC model, we generally enter into turnkey EPC contracts with OEMs for manufacturing, installing and commissioning wind turbines and the balance of plant. Under the self-EPC model, we have developed utility scale wind energy projects on our own or jointly with the OEM. We undertake the development risk and we have the option to purchase wind turbine generators from multiple OEMs to reduce time and cost overrun. The construction of the balance of plant is carried out concurrently with the erection of wind turbines.
For our solar energy projects, construction consists of design engineering, structure, module and inverter installations, sub -station construction, interconnection work, and construction of the balance of plant. We have an in-house EPC team that is responsible for overseeing and undertaking the construction of solar energy projects from installation to commissioning. For some projects, we outsource certain construction activities to third- party vendors. The contractors typically provide management, supervision, labour, certain materials, tools, engineering, mobilization, testing and other services required to construct the project.
Construction (including land acquisition) typically takes approximately nine to 24 months for utility-scale wind energy projects, and six to 15 months for utility-scale solar energy projects. Our projects team supervises and oversees all aspects of construction. Once a utility-scale wind energy project is functional, we commission the project which involves testing each turbine and integrating it within the project and with the transmission system. For utility-scale solar energy projects, commissioning involves testing the inverters and power transformers and integrating them within the project and with the transmission system. Once our wind or solar energy projects begin
56
transmitting electricity to the relevant grid, we apply for and procure the commissioning certificates from state and central government authorities.
Operations and Maintenance
Wind
O&M services for our wind energy projects are provided both in-house and through third-party O&M service providers. We are increasing the portion of capacity of projects managed internally as compared to using O&M service providers to allow more flexibility to directly operate and maintain the turbines, extend the existing agreements with suppliers or enter into new service agreements with other suppliers. We believe that in-house O&M capabilities provide us the flexibility to directly operate and maintain the turbines.
For the plants not covered under in-house purview, we enter into contracts with O&M contractors for our utility-scale wind energy projects that typically have a term of 2 to 20 years with an option to renew the contracts. These contracts typically have fixed annual fees which may be subject to escalation at pre-determined rates. Typically, for the first two years services are provided for no charge.
Under our O&M contracts, O&M service providers typically provide performance guarantees for wind turbines and compensate us for any shortfalls in machine/resource availability, subject to an annual monetary limit which is typically a percentage of the annual fees. The services provided by the O&M service providers include coordination with relevant state electricity boards and other government authorities, management and maintenance services of the equipment and the evacuation infrastructure, and technical services including reporting, testing and inspection. While the turbine manufacturer provides on-site O&M of the turbines and the balance of plant including pooling stations, we are required to ensure compliance with regulations and obtain and maintain insurance. These contracts may be terminated by either party upon the occurrence of an event of default which includes bankruptcy or insolvency of the other party, failure by parties to discharge obligations, unauthorised assignment by the O&M services and material breach of contractual terms. The performance of obligations under such contracts are subject to changes in applicable laws.
The average life expectancy of wind energy projects is approximately 30 years.
Solar
O&M services for our solar energy projects is typically provided in-house. Almost all of our utility-scale solar projects are self-operated and we provide continuous O&M services (through in-house O&M service group company) of plant preventive maintenance, round the clock security services, maintenance of switchyard and transmission line, supply of spares and consumables, plant monitoring and logging, insurance and warranty claims, module cleaning, vegetation control, seasonal tilt, photovoltaic module thermography, IV testing of photovoltaic modules, electroluminescence mass testing on a case to case basis, and plant availability warranty.
Occasionally, we also enter into O&M contracts with third -party contractors. Such O&M contracts typically have a term of two to three years and cover services such as, module cleaning, clearing ground cover (to ensure that solar resource is adequately captured by the solar array and efficiently converted into energy), solar array performance monitoring and maintenance of the balance of plant. These contracts typically have fixed annual fees, which in most cases, are subject to annual escalations at pre-determined rates.
Under our O&M contracts with third-party service providers, we generally set performance targets which are evaluated annually with pre-agreed performance guarantee rates. If the performance guarantee rate is not met, the service provider is liable to pay compensation as per the contract terms. Further, these contracts may be terminated by either party upon the occurrence of an event of default which includes bankruptcy or insolvency of the other party, failure by the other party to discharge obligations, assignment of the contract by the other party in contravention of the terms thereof, and material breach of the terms of the contract or misrepresentation by the other party. The liability of the parties under the contracts is typically limited to the annual operating fee payable under such contracts. The performance under such contracts is subject to any changes in applicable laws.
The average life expectancy of a solar energy project is up to 35 years.
57
Competition
We face competition in the development and acquisition of new projects as well as in the process to secure PPAs with high quality offtakers.
Our primary competitors in respect of the development and acquisition of new power projects include both domestic and foreign renewable energy project developers, independent power producers and utilities. We compete with renewable energy project developers on the basis of a number of differentiating factors in the industry, including site selection, access to vendors, access to project land, efficiency and reliability in project development and operation, and auction bid terms.
We also compete with both conventional and renewable energy companies for the financing needed to develop and construct projects. In addition, we compete with other conventional and renewable energy companies for a limited pool of personnel with requisite industry knowledge and experience, as well as equipment supplies, permits and land to develop new projects.
Environmental, Health and Safety Management
Our organization is dedicated to environmental stewardship and maintaining safe work practices to prevent occupational health and safety risks. To manage these goals throughout our project lifecycle, we are implementing an ESMS at both corporate and site levels. The ESMS embodies our commitment to environmental, health, safety, and social responsibilities, serving as a comprehensive framework for our organization-wide environmental and social commitments.
Key elements covered under ESMS framework include:
Our commitment to environmentally friendly energy generation is evident as all our facilities comply with applicable pollution, emission, and noise norms in India. We hold certifications under:
Regular audits by internal and third-party auditors ensure compliance with these standards. Furthermore, we engage third parties to conduct environmental and social impact assessments for all projects under development.
58
Employees
As of March 31, 2022, 2023 and 2024, we had 1675, 2481 and 3988 employees, respectively. The following table provides a breakdown of our employee base by function as of the dates indicated:
|
|
As of March, 31 |
||||
Function: |
|
2022 |
|
2023 |
|
2024 |
Business support (includes finance, legal, company secretarial, human resources, execution support, IT, offtaker, billing and management teams |
|
467 |
|
477 |
|
619 |
Business development (includes business development, bidding and new business teams) |
|
54 |
|
134 |
|
120 |
Digital Solutions through Regent Climate Connect Knowledge Solutions Private Limited |
|
— |
|
170 |
|
53 |
Design and engineering (include design, technical and power evacuation teams) |
|
298 |
|
193 |
|
207 |
Procurement and commercial |
|
46 |
|
52 |
|
116 |
Module and Cell Manufacturing |
|
— |
|
160 |
|
1373 |
Project execution |
|
304 |
|
537 |
|
640 |
O&M (includes project asset management and performance monitoring teams) |
|
441 |
|
667 |
|
730 |
Quality health safety and environment |
|
65 |
|
91 |
|
130 |
Total |
|
1675 |
|
2481 |
|
3988 |
None of our employees is represented by a labour union with respect to his or her employment with us. We have not experienced any material work stoppages or labour disruptions in the past and we consider our relations with our employees to be amicable.
Technology and R&D
We utilise state-of-the-art technology and digital tools to efficiently operate and manage our projects.
For wind energy projects, we collaborate with OEMs to acquire proprietary supervisory control and data acquisition (SCADA) systems compatible with our turbine programmable logic controllers. This allows us to monitor the projects both at the site level through cloud-based monitoring platforms and at the project level using industrial-grade hardware and software solutions. Similarly, for solar energy projects, we rely on OEM-provided data compatible with standard communication protocols compatible with popular cloud monitoring platform for centralised monitoring.
To foster innovation, our ReD Lab (ReNew Digital Lab) brings together diverse teams to develop advanced analytics solutions enabling us to leverage insights and optimise our operations.
We have built good working relationships with top tier global battery system integrators and have a dedicated team working on ramping up capability development in BESS and energy management services to build a pipeline of utility-scale battery energy storage system in India. The growth areas for this segment include localisation of the battery container and building battery asset management capabilities.
Furthermore, we have developed in-house transmission capabilities, to build transmission lines for upcoming RE projects, and to optimise costs. Our transmission business has commissioned an ISTS connected transmission scheme project and is executing two more ISTS projects under the TBCB mode in Southern India. We also prioritise evaluating new energy storage solutions and associated technologies to further improve operational efficiencies.
Information Technology
Information technology has emerged as a key business enabler for us and plays an important role in improving our overall productivity, services and risk management. Our IT strategy is aimed at integrating our business, organizational capability, services, risk management and corporate governance. We have stable, secure, and robust IT infrastructure and applications supporting our business and strategic initiatives. Our business-critical applications are hosted on multi-cloud partners who are certified to international and industry specific
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compliance standards. We have enterprise resource planning systems for financial management and several business applications for our financing business. We continue to implement automation initiatives on the top of our core applications to streamline our credit approval, collections, administration, and monitoring processes to efficiently meet our business process requirements.
Cybersecurity is pivotal for our digital strategy, driving business outcomes. As a leading renewable energy firm, we acknowledge the paramount importance of robust data and cyber security measures to safeguard operations and stakeholder trust. To maintain our position, we emphasise on key areas such as: fostering a culture of cyber resilience, empowering employees through training and awareness programs, and leveraging emerging technologies such as AI and ML. By prioritizing these initiatives, we ensure a secure foundation to innovate and thrive in the digital landscape, reinforcing trust and sustaining operational integrity.
In March 2021 and 2024, we were named to the World Economic Forum’s (WEF) Global Lighthouse Network, which recognises companies using new technologies to achieve environmentally sustainable, community supportive and profitable growth.
Intellectual Property
Our success depends in part on our ability to protect our technology and intellectual property. In the course of our business, we use various financial, business, scientific, technical, economic and engineering information, formulas, designs, methods, techniques, processes and procedures, all of which is protected confidential and proprietary information. We rely on a combination of patent, trade secret, trademark and other intellectual property laws, confidentiality agreements and licence agreements to establish and protect our intellectual property rights. We also share some of our technology and know -how with our vendors in connection with the supply of equipment for the development of our projects, and therefore ensure that we obtain adequate safeguards against any potential intellectual property infringement by our vendors.
Facilities
See the section titled “Property, Plants and Equipment” under Item 4.D.
Environmental, Social and Governance
We showcase our commitment to transparency through detailed sustainability reporting and a relentless pursuit of higher ESG ratings, continually striving to exceed current benchmarks.
We are a signatory to the United Nations Global Compact’s (UNGC) Business Ambition for 1.5°C Commitment to drive our commitment. We are the first in our sector to get our targets validated by Science-Based Targets initiative (SBTi) criteria of achieving Net Zero by 2040.
Targets Validated by SBTi
Over the years, we have diligently integrated sustainability into our operations through various initiatives to achieve the various global targets that we have undertaken. These include deploying robotic cleaning solutions for solar units, monitoring and reducing greenhouse gas emissions, fostering diversity and inclusion, advancing community development, and cultivating a safety-focused culture. These efforts are underpinned by our robust Integrated Management System, certified by Bureau Veritas, which aligns with global best practices. Our robust systems adhere to global best practices, including ISO 9001 for quality, 14001 for environmental management systems, and 45001
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for occupational health and safety. We have implemented measures to monitor and enhance employee satisfaction, happiness, and well being. By adopting the Safety Culture Improvement Program, we aim to cultivate a secure workplace environment and have established specific goals for continuously enhancing safety performance. At the board level, we maintain an ESG Committee composed entirely of independent directors. This committee is reinforced by a Steering Committee consisting of senior leadership, guiding our sustainability efforts with strategic direction.
We have implemented several initiatives to align our efforts with the United Nations Sustainable Development Goals (UNSDGs), a set of 17 global goals adopted by all United Nations Member States. These goals include specific targets to be achieved by 2030 and aim to address critical global challenges such as poverty, inequality, climate change, environmental degradation, peace, and justice. Our initiatives are designed to contribute meaningfully to these goals, contributing to sustainable development and positive global impact
We drive innovation in environmental sustainability, energy storage, and climate change, evidenced by our strategic research and development partnerships with esteemed institutions such as the Indian Institute of Technology (IIT) in Delhi (where we have jointly established the Renew IIT Delhi Centre of Excellence), IIT – Mumbai and Stanford University.
In collaboration with esteemed institutions such as COP27, the World Economic Forum (WEF), and the United Nations Environment Program (UNEP), we actively engage in policy discussions concerning climate change and energy security. In India, we collaborate with organizations like the Indian Women Network and UNGC to advance our diversity and inclusion agenda.
The following outlines our performance against our ReStart Targets:
Environment |
Social |
Governance |
• Improved score to 79/100 by Refinitiv for Fiscal 2022-23 as compared to 77 for Fiscal 2021-22. ReNew has been ranked 2nd globally in the Electric Utilities & IPP category • Maintained “B” rating in CDP, higher than the Asia regional average of B-, and similar to the renewable power generation sector average of B by CDP. Awarded Leadership and Rated “A-” in Supplier Engagement Rating (SER) by SER for 2023 • Improved inventory-based accounting for our scope 3 emissions in the Sustainability Report and Annual Report • Conserved over 358,000 kilolitres of water annually by deploying robotic cleaning of solar panels • ReNew’s Net-Zero by 2040 targets validated by SBTi |
• Our social responsibility programs have impacted over 1.4 million people across 10 states and covering over 750+ villages in India |
• Released 1st Integrated report aligned with IR, GRI, SASB, TCFD, EFRAG, CSRD and UNGC • Improved score in S&P CSA to 55 for Fiscal 2022-23 from 41 for Fiscal 2021-22 • Included in 2024 Top-Rated ESG Companies List by Morningstar Sustainalytics • 40% board diversity • 60% Independent directors on board • 3-tier ESG & Sustainability governance in place with a board level ESG Committee |
Corporate Social Responsibility
We are committed to promoting inclusive growth and empowering communities through education and the provision of employment opportunities. To this end, we have implemented the ReNew India Initiative. The ReNew India Initiative is focused on three broad areas of community development: human, social, and environmental capital. Our flagship programs under the ReNew India Initiative include the following:
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In recognition of our various corporate social responsibility efforts, we were awarded the prestigious CII ITC Sustainability Award for CSR in the year 2023.
Government Regulations
Due to the industry and geographic diversity of our projects, our operations are subject to a variety of rules and regulations. If we are not in compliance with applicable legal requirements, we may be subject to civil or criminal penalties and other remedial measures. Set forth below is a brief summary of some of the principal legislations governing our business.
Industry specific legislation
Electricity Act, 2003
The Electricity Act, 2003, as amended (“Electricity Act”) is the central legislation which covers, among others, generation, transmission, distribution, trading and use of electricity. It governs the establishment, operation and maintenance of any electricity generating company and prescribes technical standards in relation to the connectivity of generating companies with the grid. As per provisions of the Electricity Act, generating companies are required to establish, operate and maintain generating stations, sub-stations and dedicated transmission lines. Further, the generating companies may supply electricity to any licencee or even directly to consumers, subject to obtaining open access to the transmission and distribution systems and payment of transmission charges, including wheeling charges and any other open access charges, as may be determined by the concerned electricity regulatory commission. In terms of the Electricity Act, open access means the non-discriminatory provision for the use of transmission lines or distribution system or associated facilities with such lines or system, by any licensee or consumer or a person engaged in generation in accordance with the regulations specified by the relevant electricity regulatory commission.
In accordance with Section 7 of the Electricity Act, a generating company may establish, operate and maintain a generating station without obtaining a licence under the Electricity Act if it complies with the technical standards relating to connectivity with the grid prescribed under clause (b) of Section 73 of the Electricity Act.
Under the Electricity Act, the State Electricity Regulatory Commissions, (“SERCs”) are required to promote co-generation and generation of electricity from renewable sources of energy and sale of electricity to any person from sources other than the incumbent distribution licensee under the provisions of open access. The Electricity Act further requires the SERCs to specify, for the purchase of electricity from renewable sources, as a percentage of the total consumption of electricity within the area of a distribution licensee, which has been implemented in the form of renewable purchase obligations, (“RPOs”).
Additionally, the Electricity Rules, 2005, as amended (“Electricity Rules”) also prescribe a regulatory framework for developing captive generating plants. Pursuant to the Electricity Rules, a power plant shall qualify as a captive power plant only if not less than 26% of ownership is held by captive users and not less than 51% of the aggregate electricity generated in such plant, determined on an annual basis, is consumed for captive use. In case of a generating station owned by a company formed as a special purpose vehicle, the electricity required to be consumed by captive users is to be determined with reference to such unit or units identified for captive use and not with reference to the generating station as a whole, and equity shares to be held by the captive users must not be less than 26% of the proportionate equity interest of the company related to the generating unit or units identified as the captive generating plant.
The Ministry of Power introduced the Electricity Act (Amendment) Bill, 2020 (“2020 Amendment Bill”) to amend the Electricity Act to promote the generation of electricity from renewable sources of energy. The Ministry of Power also introduced Electricity (Rights to Consumers) Rules, 2020, as amended (“2020 Electricity Rules”) to empower consumers of electricity and confer rights upon the consumers to be entitled to reliable services and quality electricity. The 2020 Electricity Rules introduced, inter alia, installation of smart or pre -payment meter. Further, the Rules intend to ensure the availability of 24x7 power to all the consumers with some exceptions for lower hours that the relevant State Electricity Regulatory Commission may specify for certain categories of consumers and introduces robust grievance redressal mechanism to be introduced by the distribution licensees.
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The Ministry of Power introduced the Electricity (Amendment) Bill, 2022 (“2022 Amendment Bill”) which seeks to, among others, facilitate (i) development of the hydro sector in the country; and (ii) the use of distribution networks by all licensees under provisions of non-discriminatory open access with the objective of enabling competition, enhancing efficiency of distribution licensees for improving services to consumers and ensuring sustainability of the power sector. The 2022 Amendment Bill added that RPO should not be below a minimum percentage of the total consumption of electricity in the area of a distribution licensee, prescribed by the central government. Failure to meet RPO requirements will be punishable with a penalty ranging between Rs. 0.25 and Rs. 0.35 per kilowatt-hour for the shortfall in the first year of default and between Rs. 0.35 and Rs. 0.50 per kilowatt-hour for the shortfall continuing after the first year of default. The Ministry of Power has also issued the Electricity (Amendment) Rules, 2022 to determine that the surcharge imposed by the state commission shall not exceed 20% of average cost of supply, timely recovery of power purchase costs by distribution licensee, resource adequacy, energy storage system, and implementation of a uniform renewable energy tariff for central pool.
Tariff Determination
Under the Electricity Act, the appropriate commission is empowered to determine the tariff for the supply of electricity by a generating company to a distribution licensee. The appropriate electricity regulatory commission is guided by certain principles while determining the tariff applicable to power generating companies which include, among other things, principles and methodologies specified by the CERC for tariff determination, safeguarding consumer interest and other multiyear tariff principles laid down by the implementation of the National Electricity Policy (“NEP”) the Tariff Policy and the National Tariff Policy of India, 2016 (“NTP 2016”); and, tariff may also be determined through the transparent process of bidding in accordance with the guidelines issued by the Government of India.
National Tariff Policy, 2016
The Government of India notified the Tariff Policy on January 6, 2006 (“Tariff Policy 2006”) under Section 3 of the Electricity Act, to ensure availability of electricity to consumers at reasonable and competitive rates, financial viability of the sector and to attract investment, promote transparency, consistency and predictability in regulatory approaches across jurisdictions and minimise perceptions of regulatory risks and promote competition and to guide CERC and the SERCs in discharging their functions. The Tariff Policy 2006 has now been replaced with the NTP 2016.
In exercise of the powers conferred under Section 3 of the Electricity Act, 2003, the Government of India has issued the revised tariff policy to be applicable from January 28, 2016. The objectives of NTP 2016, among others, include:
The NTP 2016 has removed the ambiguity on applicability of the RPOs on co-generation as it has been clarified that co- generation from sources other than renewable sources shall not be excluded from the applicability of the RPO. NTP 2016 specifies that an existing coal or lignite based generating station may choose to add additional renewable energy capacity and generation from such renewable energy capacity may be bundled with its thermal generation for the purpose of sale. In case an obligated entity procures such bundled power, then the SERCs will consider the obligated entity to have met the RPO to the extent of power bought from such renewable energy generating stations.
Further, to encourage faster capacity addition based on solar and wind energy sources, the Ministry of Power on November 23, 2021 waived the inter-state transmission charges for solar, wind, hydro pumped storage plant (“PSP”) and battery energy storage system projects (“BESS”) commissioned up to June 30, 2025. Such waiver shall be applicable for a period of 25 years for solar, wind and hydro PSP, or for a period of 12 years for BESS, or for a period subsequently notified for future projects by the GoI, from the date of commissioning of the power plant. The waiver shall be allowed for inter-state transmission charges only, and not losses. Such power plants shall be required to meet the following criteria, among others: (a) solar and wind energy generation consumed or sold through competitive bidding, power exchange, or through bilateral agreement; (b) electricity from solar and/or wind sources used by PSP and BESS subject to at least 51% of electricity requirement for pumping of water in PSP and charging of battery in BESS is met by use of electricity generated from wind and/or solar power plants.; (c) electricity generated/supplied from such PSP and BESS power plants as mentioned above in (b); (d) for trading of electricity generated/supplied from solar, wind and sources mentioned in (a) to (c) above in green term ahead market and green day ahead market up to June 30, 2025; (e) for green hydrogen plants commissioned up to June 30, 2025 i.e. hydrogen generated using the electricity produced from solar and wind energy and sources mentioned in (a) to (c) above. This waiver shall be applicable for a period of 8 years from the date of commissioning of such hydrogen plant.
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National Solar Mission (“NSM”)
NSM was approved by the Government of India on November 19, 2009 and launched on January 11, 2010. The target for solar deployment was enhanced to 100 GW of solar power in India by 2022. The target principally comprises 40 GW rooftop solar power projects and 60 GW large and medium scale grid connected solar power projects. In addition, the Government of India on March 22, 2017 sanctioned the implementation of a scheme to enhance the capacity of solar parks from 20,000 MW to 40,000 MW for setting up at least 50 solar parks each with a capacity of 500 MW and above by 2019-2020, which was further extended to 2021-2022.
National Wind Mission
In order to boost electricity generation from on-shore and off-shore wind sources, ensure certainty for stakeholders and capacity building, the MNRE has formulated the National Wind Mission, which provides for, inter alia, single window clearance for wind energy projects, land allocation mechanisms, tariff and financing mechanisms.
Guidelines for Development of Onshore Wind Power Projects, 2016 (“MNRE Guidelines”)
The Ministry of New and Renewable Energy (“MNR”) initially issued guidelines for orderly growth of the wind power sector, which were subsequently revised from time to time. These guidelines aim to facilitate the development of wind power projects in an efficient and cost-effective manner.
Revised Guidelines for Wind Power Projects (“Wind Power Guidelines”)
To ensure quality of wind farm projects and equipment, MNRE introduced the Wind Power Guidelines which were revised and addressed to the erstwhile State Electricity Boards, state nodal agencies and financial institutions such as Indian Renewable Energy Development Agency Limited (“IREDA”). The Wind Power Guidelines provide for, inter alia, proper planning, selection of quality equipment and implementation, performance and monitoring of wind power projects.
Guidelines for Tariff Based Competitive Bidding Process for Procurement of Wind and Solar Power
The Ministry of Power (MoP) issued guidelines on August 3, 2017 and December 8, 2017, as amended, for procurement of solar and wind power, respectively, through tariff based competitive bidding process (“Competitive Bidding Guidelines”). The Competitive Bidding Guidelines aim to enable the distribution licensees to procure solar and wind power at competitive rates in a cost-effective manner. These Guidelines have been issued under the provisions of Section 63 of the Electricity Act for long term procurement of electricity, determined through the competitive bidding process, by the procurers, the distribution licensees, or the authorised representatives(s), or an intermediary procurer from grid-connected Solar PV Power Projects or grid-connected Wind Power Projects having capacity of 5 MW and above or 5 MW and above for intra-state projects 50 MW and above for inter-state projects, respectively. The Competitive Bidding Guidelines were further supplemented when the Ministry of Power issued guidelines on August 26, 2022 with the aim of promoting cheaper renewable energy sources replacing costlier thermal power and to promote RPO of distribution licensees. Additional guideline updates in July 2023 have introduced a transparent, fair, standardised procurement framework based on open competitive bidding and guidelines around the competitive procurement of electricity from solar PV power plants, Solar PV capacity addition and energy storage obligation requirements of DISCOM.
National Wind-Solar Hybrid Policy (“Hybrid Policy”)
MNRE announced the Hybrid Policy on May 14, 2018, with an aim to encourage renewable power generation and promote new projects as well as hybridization of the existing wind and solar projects. The policy was amended on August 13, 2018. The main objective of the Hybrid Policy is to provide a framework for promotion of large grid connected wind-solar photovoltaic hybrid systems for optimal and efficient utilization of transmission infrastructure and land, reducing the variability in renewable power generation and achieving better grid stability.
The implementation of wind solar hybrid systems will be/was on the basis of different configurations and use of technology. The Hybrid Policy mandates the Central Electricity Authority and the CERC to formulate necessary standards and regulations for wind-solar hybrid systems.
Guidelines for Tariff Based Competitive Bidding Process for procurement of power from Grid Connected Wind Solar Hybrid Projects, 2020 (“Hybrid Projects Guidelines”)
Pursuant to the Hybrid Policy, a scheme was introduced on May 25, 2018 for setting up of 2500 MW of wind-solar hybrid power projects at a tariff discovered through competitive bidding. The Hybrid Projects Guidelines dated October 14, 2020, as amended, issued by MNRE provides a framework for procurement of electricity from ISTS grid connected wind-solar hybrid power projects and facilitates
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transparency and fairness in procurement processes. Further, power purchase agreements, (“PPAs”) entered into pursuant to these guidelines shall not have a term lesser than 25 years from the COD. These Guidelines have been issued under the provisions of Section 63 of the Electricity Act for long term procurement of electricity, determined through the competitive bidding process, by the procurers, the distribution licensees or an intermediary procurer from Inter State Transmission State grid-connected wind-solar hybrid power projects having individual size of 50 MW and above at one site with minimum bid capacity of 50 MW. The Hybrid Projects Guidelines as amended on March 9, 2022 and November 2, 2022 provide that where the distribution licencee, authorises any agency to carry out the tendering/bidding process on its behalf then the agency will be responsible for fulfilling all the obligations imposed on the procurer during the bidding phase, in accordance with these Guidelines.
Guidelines for Tariff Based Competitive Bidding Process for Procurement of Power from Grid Connected Wind Solar Hybrid Projects 2023
Subsequently, the Ministry of Power (MoP) issued a guideline for tariff based competitive bidding (TBCB) process for procurement of power from grid connected wind solar hybrid projects on 21st August 2023. The objective of the guidelines is to promote competitive procurement of electricity from grid connected wind solar hybrid power projects, by distribution licensees, to protect consumer interests. The guideline aims to facilitate renewable capacity addition and fulfilment of renewable purchase obligation requirement of discoms. These guidelines apply to all subsequent wind-solar hybrid power projects of 10 MW and above capacity for intra-state transmission, and 50 MW and above for inter-state transmission, with or without energy storage. However, at least 33 per cent of the total capacity must be from either wind or solar resources.
National Repowering and Life Extension Policy for Wind Power Projects, 2023
The policy was issued by Ministry of New and Renewable Energy (MNRE) on 7th December 2023 to enable the replacement of older turbines with newer, more efficient models even before the end of their design life, if owners choose to. It also allows for the refurbishment of wind turbines to extend their life beyond the design life based on safety and performance assessment according to relevant standards. The National Institute of Wind Energy (NIWE) estimated the country’s repowering potential at 25.406 GW for turbines below a 2 MW capacity. A detailed repowering potential map will be issued by NIWE. Turbines eligible for repowering or refurbishment under the policy include those not complying with the quality control order, those that have completed their design life, turbines of rated capacity below 2 MW, and turbines that can be commercially or voluntarily considered after 15 years of installation.
According to the policy, repowering projects can be classified either as standalone or aggregation projects. Until the power purchase agreement (PPA) expires, electricity procurement will be based on the average generation of the previous three years. The current PPA tenure will be extended for up to two years, or for a term equal to the refurbishment or repowering. The existing distribution company (discom) is not entitled to any authority or procurement over the surplus power produced, following repowering or refurbishment. The developer has the flexibility to sell the surplus power generated as per their choice, whether through the power exchange, bilateral agreements, or by engaging in short/medium/long-term PPA in accordance with prevailing laws and regulations. There is no mandatory obligation to supply the power to any discom or procurer at fixed rates. Repowering or refurbishment initiatives should be operational within 24 months from the issuance of the consent letter.
National Offshore Wind Policy, 2015
India possesses a coastline of approximately 7600 km, which provides a prospective source of offshore wind energy. Per the National Offshore Wind Energy Policy dated October 6, 2015, the Ministry of New and Renewable Energy (MNRE) will assist in the development of offshore wind energy in India and work in close coordination with other government entities for development and use of maritime space within the Exclusive Economic Zone (EEZ) of the country and shall be responsible for the overall monitoring of offshore wind energy development in the country. The National Institute of Wind Energy (NIWE), Chennai will carry out resource assessments, surveys and studies in the EEZ, demarcate blocks and facilitate developers for setting up offshore wind energy farms. The MNRE published a Strategy for Establishment of Offshore Wind Energy Projects on August 17, 2023 which was then revised and republished on September 26, 2023, which provides three models for the development of offshore wind and contemplates an anticipated auction of 37 GW of offshore wind deployment by 2030.
Guidelines for Tariff Based Competitive Bidding Process for Procurement of Round-The Clock Power from Grid Connected Renewable Energy Power Projects, complemented with Power from any other source or storage.
The Ministry of Power (MoP) has issued guidelines on July 22, 2020 as amended on November 3, 2020, February 5, 2021, February 3, 2022 and August 26, 2022 to enable procurement of round-the-clock power by distribution companies from grid- connected renewable energy power projects, complemented with power from any source or storage, through tariff based competitive bidding process, and to facilitate addition to renewable energy capacity and fulfilment of renewable power obligation requirements of distribution companies. Pursuant to these guidelines, the renewable energy component generated under this program is eligible for renewable purchase obligation
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compliance. Further, the amendment dated February 5, 2021 has made it mandatory to include force majeure clauses in the PPAs as per the industry standards. The amendment dated August 29, 2022 provided, among other things, that: (i) the provisions for change in law shall be construed in accordance with the Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2021 notified by the Ministry of Power on October 22, 2021; and (ii) in case of project components being located at multiple locations, if one of such components (wind or solar PV) is ready for injection of power into the grid but the remaining component is unable to be commissioned, then the generator will be allowed for commissioning of such component which is ready outside the ambit of PPA, with first right of refusal for such power vested with the end procurer. Subsequent to refusal of such power by the end procurer, the right of refusal shall vest with the intermediary procurer. In case the procurer/intermediary procurer decides to buy such discrete component(s) power outside the PPA, such power shall be purchased at 50% of the PPA Tariff/weighted average levelised tariff for the applicable contract year.
Guidelines for Tariff Based Competitive Bidding Process for Procurement of Firm and Dispatchable Power from Grid Connected Renewable Energy Power Projects with Energy Storage Systems, 2023
The Ministry of Power (MoP) has issued guidelines for a tariff-based competitive bidding process to procure firm and dispatchable power from grid-connected renewable energy projects with energy storage devices on 9th June, 2023. The guidelines specifically focus on the procurement of firm and dispatchable power from grid-connected RE power projects. Firm and Dispatchable RE power refer to the supply of electricity according to the specified demand profile mentioned in the Request for Selection (RfS) or bidding documents. Bids will be solicited in terms of power capacity, with a minimum bid quantum of 50 MW. The guidelines emphasise the need of encouraging competition, transparency, and standardised procurement in order to minimise power procurement costs, allow renewable capacity increase, and meet renewable purchase and storage power responsibilities. They also intend to deliver appropriate returns to investors and to provide the groundwork for long-term inter-state and intra-state electricity sales and purchases. The bidding procedure will be a two-part, single-stage process that includes a technical bid and financial bid review. Qualification standards, including technical and financial requirements, have been established to assess the competence of project developers. The successful bidder must retain a majority stake in the special purpose vehicle or project company that will carry out the power purchase agreement (PPA). The PPA period is ideally 20 years, but can be extended to 25 years.
A subsequent amendment by MoP was published on 2nd February 2024 focuses on refining Clause 14.3, specifically addressing delays in the commencement of power supply. Notably, Clause 14.3 (b) (ii) has been officially removed, indicating a deliberate effort to streamline and potentially expedite the initiation of power supply from these projects. The revision is poised to have a substantial impact on the operational dynamics of grid-connected renewable energy initiatives nationwide.
Central Electricity Regulatory Commission (Terms and Conditions of Tariff Determination from Renewable Energy Sources) Regulations, 2020
CERC notified the Central Electricity Regulatory Commission (Terms and Conditions of Tariff Determination from Renewable Energy Sources) Regulations, 2020, or the “Tariff Regulations 2020,” on June 23, 2020. These regulations came into force from July 1, 2020 and shall remain effective until March 31, 2023, unless reviewed earlier or extended by CERC. Under the Tariff Regulations 2020, CERC has specified certain parameters for determination of tariff for new sources of renewable energy such as floating solar project, renewable hybrid energy project and renewable energy project with storage in addition to those covered in past tariff regulations. In case of renewable energy projects for which generic tariff has to be determined as per these regulations, it will be done through a tariff order at least one month before the commencement of the year for each year of the control period, which is from July 2020 to March 2023. The other tariff, which is project specific, shall be determined by the CERC on a case to case basis for, among others, solar PV power projects, floating solar projects, solar thermal power projects, wind power projects, renewable hybrid energy projects and renewable energy with storage projects.
In a notification published on 28th March 2023, CERC further extended the period of applicability of the said regulations through 30th June, 2024.
Central Electricity Regulatory Commission (Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations, 2024
The Central Electricity Regulatory Commission (CERC) on June 12, 2024, issued the Central Electricity Regulatory Commission (Terms and Conditions for Tariff Determination from Renewable Energy Sources) Regulations, 2024.
These regulations come into force on 1st July 2024, and, unless reviewed earlier or extended by the Commission, shall remain in force up to 31st March 2027.
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National Electricity Policy, 2005
The Indian Government notified the National Electricity Policy, as amended (“NEP”) on February 12, 2005, under Section 3 of the Electricity Act. The key objectives of the NEP, amongst other things are, stipulating guidelines for accelerated development of the power sector, providing supply of electricity to all areas and protecting interests of consumers and other stakeholders, keeping in view availability of energy resources, technology available to exploit these resources, economics of generation using different resources and energy security issues.
Further, NEP emphasises the need to promote generation of electricity based on non-conventional sources of energy. The NEP provides that SERCs should specify appropriate tariffs to promote renewable energy (until renewable energy power projects relying on non-conventional technologies can compete within the competitive bidding system). SERCs are required to specify percentages of the total consumption of electricity in the area of a distribution licensee that progressively increase the share of electricity generated from renewable sources. Furthermore, the NEP provides that such purchase of electricity by distribution companies should be through competitive bidding.
The Government of India has released draft of National Electricity Policy, 2021 and sought comments from the stakeholders. Once implemented, the draft National Electricity Policy aims at achieving the following objectives, among others: (a) promotion of clean and sustainable generation of electricity; (b) development of adequate and efficient transmission systems; (c) revitalization of DISCOMs; (d) development of efficient markets for electricity; (e) supply of reliable and quality power in line with specified standards in an efficient manner; (f) move towards light- touch regulation; and (g) promotion of manufacturing goods and services in India in the generation, transmission and distribution segments of the power sector under the Make in India initiative and Atmanirbhar Bharat Abhiyan (self-reliance scheme).
Central Electricity Regulatory Commission (Indian Electricity Grid Code) Regulations, 2023. (“Grid Code”)
The CERC notified the new Grid Code on 29th May 2023. These regulations will apply to all users, state load despatch centres (SLDCs), renewable energy management centres, regional load despatch centres (RLDCs), national load despatch centre, central transmission utility, state transmission utilities, licensees, five regional power committees, settlement nodal agencies, qualified coordinating agencies and power exchanges to the extent applicable. For stable, reliable and secure grid operation and to achieve maximum economy and efficiency of the power system, the grid code apart from the provisions relating to the role of various statutory bodies and organisations and functional linkages among them, contains extensive provisions pertaining to reliability and adequacy of resources; technical and design criteria for connectivity to the grid including integration of new elements, trial operation and declaration of commercial operation of generating stations and inter-state transmission systems; protection setting and performance monitoring of the protection systems including protection audit; unit commitment, scheduling and despatch criteria for physical delivery of electricity; integration of renewables; ancillary services and reserves; and cyber security.
The CERC (Indian Electricity Grid Code) Regulations, 2010 as a result of the new regulations stands repealed.
National Electricity Plan (Volume 1) Generation, 2023
On May 31, 2023, the Central Electricity Authority (CEA) issued the National Electricity Plan (NEP) for the 2022 to 2032 period. The projected installed capacity for the year 2031-2032 is estimated to be 900,422 MW, comprising 304,147 MW of conventional capacity and 596,275 MW of renewable-based capacity and, a battery energy storage system (BESS) capacity of 47,244 MW, or 236,220 MWh. These projections align with the national target to achieve a non-fossil-based installed capacity of approximately 500 GW by the year 2029 to 2030.
Renewable Purchase Obligations
The Electricity Act promotes the development of renewable sources of energy by requiring the SERCs to ensure grid connectivity and the sale of electricity generated from renewable sources. In addition, the Electricity Act and the Tariff Policy require the SERCs to specify, for the purchase of electricity from renewable sources, a percentage of the total consumption of electricity within the area of a distribution licensee, which are known as RPOs. RPOs are required to be met by obligated entities (distribution licensees, captive power plants and open access consumers) by purchasing renewable energy, either by renewable energy power producers such as the Group, or by purchasing renewable energy certificates (“RECs”). In the event of default by an obligated entity in any fiscal year, the SERC may direct the obligated entity to pay a penalty or to deposit an amount determined by the relevant SERC, into a fund to be utilised for, among others, the purchase of RECs.
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Revised RPO notification was published on 20th October, 2023; and is expected to lead to larger penalties for obligated entities for non-compliance. Fungibility between sub-categories to meet the overall targets, shall make RPO more compliant as well as ensure timely fulfilment by the obligated entities (Discoms, Open Access Consumers, Captive Power Producers)
Generation Based Incentive Scheme (“GBI Scheme”)
To encourage generation from wind energy projects, MNRE notified the GBI Scheme for grid connected wind power projects on December 17, 2009 which is currently applicable to the wind power projects which were commissioned and registered under the GBI Scheme during period commencing from the date of the aforementioned notification and up to March 2017. GBIs under the GBI Scheme are available for the wind power projects selling electricity to the grid and captive wind power projects but exclude wind power projects that undertake third-party sales. Only those wind power projects which sell electricity at the tariff announced by SERCs and/or state governments are eligible for benefits under the GBI Scheme. The objective of the GBI Scheme is to (i) broaden the investor base; (ii) incentivise actual generation with the help of generation / outcome-based incentives; and (iii) facilitating entry of large independent power producers and foreign direct investment in the Indian wind power sector. Under the GBI Scheme, generation-based incentives are available for a minimum period of four years and maximum period of 10 years.
Ujwal Discom Assurance Yojana (“UDAY”)
UDAY is a scheme formulated by the Ministry of Power, Government of India, pursuant to an Office Memorandum dated November 20, 2015. It provides for the financial turnaround and revival of Power Distribution companies, (“DISCOMs”). The scheme is applicable only to state-owned DISCOMs including combined generation, transmission, and distribution undertakings.
The various state governments, their respective DISCOMs and the Government of India have entered into agreements which stipulate responsibilities of the entities towards achieving the operational and financial milestones under the scheme. One of the features of this scheme is that the States have agreed to take over 75% of the debt of the DISCOMs as of September 30, 2015 over a period of two years–50% of the DISCOM debt in 2015-16 and 25% in 2016-17 as per the mechanism provided for in the scheme.
Central Electricity Regulatory Commission (Open Access in Inter-State Transmission) Regulations, 2008 (“CERC Open Access Regulations”)
The CERC Open Access Regulations, as amended from time to time, for inter- state transmission provide for a framework which not only facilitates traditional bilateral transactions (negotiated directly or through electricity traders), but also caters to collective transactions discovered in a power exchange through anonymous, simultaneous competitive bidding by sellers and buyers. Applicable to short term open access transactions up to one month at a time, the emphasis of the CERC Open Access Regulations is on scheduling rather than reservation to ensure that the request of an open access customer is included in the dispatch schedules released by RLDCs. Further, certain types of transmission services by payment of transmission charges (to be levied in Rupees per MWh) shall be available to open access customers based on the type of transactions, i.e., bilateral or collective. In addition to transmission charges, certain operating charges shall also be levied. The CERC Open Access Regulations enable entities connected to inter-state transmission as well as intra-state transmission and distribution systems to purchase power from a source other than the incumbent distribution licensee situated outside the relevant State. The CERC Open Access Regulations were last amended in December 2019, establishing procedures for scheduling of transactions in the real-time market.
Central Electricity Regulatory Commission (Grant of Connectivity, Long-term Access and Medium-term Open Access in inter-State Transmission and related matters) Regulations, 2009 (“CERC Connectivity & Access Regulations”)
The CERC Connectivity & Access Regulations, as amended from time to time, provide a framework for granting connectivity, medium and long-term access to the inter-state transmission system (“ISTS”) Any power generating station, including a captive generating plant or a bulk consumer, is authorised to seek connectivity, medium and long-term access to the ISTS in accordance with the provisions made under these Regulations. CERC Connectivity & Access Regulations identifies Central Transmission Utility (“CTU”) as the nodal agency for grant of connectivity. With respect to medium and long-term access to ISTS, CTU is mandated to frame procedures concurrent to the CERC Connectivity & Access Regulations covering all the aspects as envisaged in the CERC Connectivity & Access Regulations in detail. For grant of connectivity, wind and solar based projects are treated differently by CERC Connectivity & Access Regulations, as a separate set of procedures is framed for wind and solar projects safeguarding the interests of renewable energy projects and the transmission system owner.
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Central Electricity Regulatory Commission (Sharing of Inter-State Transmission Charges and Losses) Regulations, 2020 (“CERC Transmission Charges Regulations 2020”)
The CERC Transmission Charges Regulations 2020, as amended on February 7, 2023, provides a framework for sharing of charges among the entities for using the ISTS network. As per the CERC Transmission Charges Regulations 2020, transmission charges and losses for the use of ISTS are not applicable for solar power-based projects whose useful life has been commissioned during the period from July 1, 2011 to June 30, 2023 and for wind power-based projects whose useful life has been commissioned during the period from July 1, 2017 to June 30, 2023. The CERC Transmission Charges Regulations 2020 has come into force from November 1, 2020 and has superseded the CERC Transmission Charges Regulations 2010. The CERC Transmission Charges Regulations 2020 accorded ISTS transmission charges waiver to wind, solar and hydro projects as follows:
Central Electricity Regulatory Commission (Deviation settlement Mechanism and related matters) Regulations, 2022 (“F&S Regulations”)
The CERC in these regulations, as amended from time to time, has laid down rules guidelines and standards for maintaining grid discipline and grid security as envisaged under the Grid Code through the commercial mechanism for Deviation Settlement through withdrawal and injection of electricity by the users of the grid including wind and solar based plants connected to an interstate transmission network. The wind and solar generators connected to interstate transmission networks are required to provide a daily 15 minutes’ time block wise generation schedule. The schedule may be revised by giving advance notice to the relevant Regional Load Despatch Centre. Any deviations between actual generation with respect to the schedule generation in the 15-minute time block is liable to attract commercial charges as per the formula prescribed in the F&S Regulations.
Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2021 (“Change in Law Rules”)
The Change in Law Rules, provide the mechanism for adjustment and recovery of monthly tariff or charges upon the occurrence of a change in law (such as change in any domestic tax including duty, levy, cess, or charges as specified under the Change in Law Rules), for the compensation of the affected party to restore such affected party to the same economic position as if such change in law had not occurred. Change in law, as per the Change in Law Rules, unless otherwise defined in the relevant agreement means, any enactment or amendment or repeal of any law, made after the determination of tariff under the Electricity Act, 2003, leading to corresponding changes in the cost requiring change in tariff. Where the relevant agreement does not lay down a formula for calculation of the amount of the impact of a change in law to be adjusted and recovered, such impact shall be calculated in accordance with the formula provided in the Change in Law Rules, which is based on, among other things, the estimated monthly electricity generation, contracted capacity of the power plant as per the agreement, normative plant load factor and capacity utilization factor. The generating company or transmission licensee shall, within thirty days of the coming into effect of the recovery of impact of change in law, furnish all relevant documents along with the details of calculation for adjustment of the amount of the impact in the monthly tariff or charges to the appropriate commission, which shall verify the calculation and adjust the amount of impact within 60 days from the date of receipt of the relevant documents. After such adjustment, the generating company or transmission licensee, as the case may be, shall adjust the monthly tariff or charges annually based on actual amount recovered, to ensure that the payment to the affected party is not more than the yearly annuity amount. The Ministry of Power, pursuant to its circular dated February 21, 2022, clarified that this Change in Law Rules will be applicable on the events occurred on or after the date of notification of this Change in Law Rules.
Electricity (Promotion of Generation of Electricity from Must-Run Power Plant) Rules, 2021 (“Must-Run Rules”)
Under the Must-Run Rules, a wind, solar, wind-solar hybrid or hydro power plant (in cases where water levels could lead to flooding risk) or a power plant from any other sources, as may be established from time to time by the relevant governmental authority, that has entered into an agreement to sell electricity to any person is a ‘must-run power plant’. A must-run power plant is not subject to reduction or regulation of generation or supply of electricity on account of merit order dispatch or any other commercial consideration, except in the event of technical constraint in the electricity grid or for reasons of security of the electricity grid. In the event of reduced demand by a
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procurer from a must-run power plant, compensation is payable by the procurer to the must -run power plant at the rates specified in the agreement for purchase or supply of electricity. In the event of any technical constraint in the electricity grid or for reasons of security of the electricity grid, where the procurer notifies the must -run power plant in advance of a reduction, the must-run power plant will sell the electricity not utilised by the procurer on the open market. The amount realised by such must-run power plant from such sale of electricity on the open market, after deducting actual expenses paid for the sale on the open market, if any, shall reduce the compensation payable by the procurer. Amounts owed pursuant to the foregoing will be paid by the procurer on a monthly basis with any offset payment paid by the must-run power plant to the procurer within one month of the close of the fiscal year.
Electricity (Late Payment Surcharge) Rules, 2022 (“LPS Rules 2022”)
The LPS Rules 2022 were notified by the Ministry of Power on June 3, 2022. The LPS Rules 2022 are applicable for payments to be made in pursuance of power purchase agreements, power supply agreements and transmission service agreements, where tariff is determined under the Electricity Act, 2003, including such agreements which become effective before the LPS Rules 2022 came into force. The LPS Rules 2022 provide that late payment surcharge, that is, the charges payable by a distribution company to a generating company or electricity trader for power procured from it, or by a user of a transmission system to a transmission licensee on account of delay in payment of monthly charges beyond the due date, shall be payable on the payment outstanding after the due date at the base rate of late payment surcharge applicable for the period for the first month of default. The rate of late payment surcharge for the successive months of default shall increase by 0.5% for every month of delay provided that the late payment surcharge shall not be more than 3 percent higher than the base rate at any time and shall not be higher than the rate specified in the agreement for purchase or transmission of power. All payments by a distribution licensee to a generating company or a trading licensee for power procured from it or by a user of a transmission system to a transmission licensee shall be first adjusted towards late payment surcharge and thereafter, towards monthly charges, starting from the longest overdue bill. LPS Rules 2022 also provides for regulation of access to power in case of non-payment of dues within the specified time period. The over-dues of the prior period, i.e., up to June 3, 2022, shall be liquidated through equated monthly instalments as per the provision of the LPS Rules 2022.
Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022 (“Green Energy Open Access Rules 2022”)
The Ministry of Power notified the Green Energy Open Access Rules 2022 on June 6, 2022 with the objective of ensuring access to affordable, reliable, sustainable and green energy. The reduction of the open access transaction limit from 1 MW to 100 kW and appropriate provisions for cross-subsidy surcharge, additional surcharge, and standby charge is expected to incentivise consumer access to green energy at reasonable rates.
Central Electricity Regulatory Commission (Connectivity and General Network Access to the inter-State Transmission System) Regulations, 2022 (GNA Regulations)
The CERC issued the Connectivity and General Network Access to the Inter-State Transmission System Regulations, 2022 (GNA Regulations) on June 7, 2022, which, when fully implemented, will replace CERC regulations form 2009. The GNA Regulations provide electricity generators with general network access, allowing them to connect to and distribute power through the inter-state transmission system without designating the location of the offtaker. The GNA Regulations also contemplate grant of temporary GNA (T-GNA), which provides an open access right to an eligible buying entity for a duration of up to 11 months.
Ministry of Environment - E-Waste (Management) Rules, 2022
These rules apply to every manufacturer, producer refurbishes dismantler and recycler involved in manufacture, sale, transfer, purchase, refurbishing, dismantling, recycling and processing of e- waste or electrical and electronic equipment, including Solar panels/cells, solar Photovoltaic panels/cells/modules under (ii) Consumer Electrical and Electronics and Photovoltaic.
This rule requires every manufacturer and producer of solar photo-voltaic modules or panels or cells to also:
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Ministry of Environment, Forest and Climate Change - Plastic Waste Management Rules, 2016.
These rules apply to every waste generator, local body, village body, manufacturer, importers and producer. The rules do not apply to the export-oriented units or units in special economic zones, notified by the Central Government, manufacturing their products against an order for export only.
The waste generator must take steps to minimise generation of plastic waste and segregate plastic waste at source in accordance with the Solid Waste Management Rules, 2000; not litter plastic waste and ensure segregated storage of waste at source; and handover segregated waste to the relevant local body or agencies appointed by them or registered waste pickers’, registered recyclers or waste collection agencies.
Renewable energy certificates (“RECs”)
The CERC notified the Central Electricity Regulatory Commission (Terms and Conditions for Recognition and Issuance of Renewable Energy Certificate for Renewable Energy Generation) Regulations, 2010 (“REC Regulations”) on January 14, 2010 and the same was amended on September 29, 2010, July 10, 2013, December 30, 2014 and March 28, 2016. The REC Regulations aim at the development of markets for power from non-conventional energy sources by issuance of transferable and saleable credit certificates. The REC Regulations facilitate fungibility and inter -state transaction of renewable energy with least cost and technicality involved. The CERC has nominated the National Load Despatch Centre as the central agency to perform the functions, including, inter alia, registration of eligible entities, issuance of certificates, maintaining and settling accounts in respect of certificates, acting as repository of transactions in certificates and such other functions incidental to the implementation of REC mechanism as may be assigned by the CERC. The REC mechanism provides a market-based instrument which can be traded freely and provides means for fulfilment of RPOs by the distribution utilities/consumers.
Central Electricity Regulatory Commission (Terms and Conditions for Renewable Energy Certificates for Renewable Energy Generation) Regulations, 2022
According to the new regulations, renewable energy generating stations, captive generating stations based on renewable energy sources, distribution licensees, and open access consumers are now eligible to issue renewable energy certificates (RECs).
The national load despatch centre (NLDC) has been designated the agency to implement these regulations. REC Regulations stipulated the details of Grant of accreditation, Issuance, Exchange, Redemption, Denomination, Pricing and Validity for certificates. CERC has also introduced certificate multiplier for renewable energy generating station, Hydro, municipal solid waste, non- fossil fuel-based cogeneration and biomass and biofuel. Certificate once assigned to a renewable energy generating station, the certificate multiplier will remain valid for 15 years.
Approved Models and Manufacturers of Solar Photovoltics Modules (Requirements for Compulsory Registration) order 2019 (“ALMM Order”)
The GoI has introduced a list of approved module suppliers who will be eligible to supply modules to project developers selected to develop solar projects in government projects, government assisted projects, projects under government schemes and programs, open access, net-metering projects, installed in the country, including specified projects set up for sale of electricity to the government.
The MNRE has conducted an evaluation to determine eligible models and manufacturers of solar photovoltaic (PV) cells and modules that comply with the Bureau of Indian Standards (BIS) and has published them in a list called the “Approved List of Models and Manufacturers” (ALMM). The Ministry issued the “Approved Models and Manufacturers of Solar Photovoltaic Modules (Requirements for Compulsory Registration) Order” on January 2, 2019, which includes LIST I, specifying models and manufacturers of Solar PV Modules, and LIST II, specifying models and manufacturers of cells. Subsequently, on March 28, 2019, the MNRE identified the National Institute of Solar Energy (NISE) as the implementation agency and in further guidelines outlined various procedures for inspections, quality checks, and renewals for enlistment under the ALMM. Recently, on May 20, 2024, the MNRE has clarified the ALMM order concerning modules shall apply to all bids with a last date of bid submission on or after April 10, 2021. This measure aims to ensure that solar PV cells and modules used in government and government-assisted projects meet established standards for quality and reliability, thereby safeguarding long-term energy security.
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Performance Linked Incentive (“PLI”) Scheme: National Programme on High Efficiency Solar PV Modules
The MRNE is implementing the production linked incentive (PLI) scheme for high efficiency solar PV modules, for achieving manufacturing capacity of Giga Watt (GW) scale in high efficiency solar PV modules with a total anticipated investment of Rs. 24,000 crores. Solar PV manufacturers are selected through a transparent selection process. This scheme contemplates PLIs for selected solar PV module manufacturers during the five-year period post commissioning, on manufacture and sale of high efficiency solar PV modules. The PLI Scheme is being implemented in two tranches with a budgetary allocation of Rs. 4,500 crores applied to the first tranche and Rs.19,500 crores to the second tranche.
Integrated Day Ahead Market
Pursuant to a notification dated March 24, 2021, the Ministry of Power, India, an integrated day-ahead market (“Integrated DAM”), is expected to be launched at the power exchanges with separate price formation for power generated from renewable energy and conventional power. According to this notification, the proposed market structure should allow the buyer to meet the RPO target by dire power from the exchange. The notification is proposed to be implemented by June 30, 2021.
Guidelines for Procurement and Utilization of Battery Energy Storage Systems as part of Generation, Transmission and Distribution Assets, along with Ancillary Services
The guidelines were notified by the Government of India in March 2022 and aim to facilitate the procurement of battery storage systems to be utilised either in combination with renewable energy or as a standalone asset. These guidelines will also play a critical role in achieving the nation’s renewable energy and decarbonization goals. Business opportunities identified by the Ministry of Power in this space include BESS coupled with RE and with transmission infrastructure and storage for distribution and ancillary services.
Revised Scheme for Flexibility in Generation of Thermal / Hydro Power Stations through Bundling with Renewable Energy and Storage Power
A revised scheme was notified by the Government of India in April 2022. The revisions provide flexibility in generation and scheduling of power from thermal/hydro plants through bundling with renewable energy. This reduces the cost of power and helps distribution companies to meet renewable purchase obligations for distribution licensees to meet a certain minimum quantity of their power requirement from renewable sources.
Guidelines for Encouraging Competition in Development of Transmission Projects and Tariff based Competitive-bidding Guidelines for Transmission Service, 2021
The MoP and the GoI issued the Guidelines for Encouraging Competition in Development of Transmission Projects (“CDTP Guidelines”) and the Tariff based Competitive-bidding Guidelines for Transmission Service on August 10, 2021 ( “TBCB Guidelines”), framed under the provisions of Section 63 of the Electricity Act in order to facilitate the smooth and rapid development of transmission capacity in the country as envisaged in the NEP and the NTP such that inter state/intra state transmission projects, other than those exempted by the GoI are implemented through tariff based competitive bidding. The CDTP Guidelines provides for the preparation of a) perspective plan for fifteen years, b) short term plan for five years, both collectively being a part of the National Electricity Plan by the Central Electricity Authority and c) a network plan prepared by the Central Transmission Utility based upon the National Electricity Plan prepared in accordance with the NEP which will be reviewed and updated as and when required but not later than once a year. Information will be made available to the stakeholders regarding new projects and the respective technical and other specifications for the purpose of project formulation and for enabling competitive bidding to take place. In addition, the selection of developers for identified projects would be through tariff based competitive bidding through e-reverse bidding for transmission services according to the TBCB Guidelines. Additionally, the nodal agency shall appoint an independent engineer during the construction phase in accordance with the framework prescribed in the CDTP Guidelines.
The TBCB Guidelines apply to the procurement of transmission services for the transmission of electricity through tariff-based competitive bidding. The TBCB Guidelines aim at facilitating competition through wider participation in providing transmission services and tariff determination through a process of tariff-based bidding.
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The TBCB Guidelines provide that a Bid Process Coordinator (“BPC”) would be responsible for conducting the bid process for the procurement of the required transmission services for inter-state and intra-state transmission projects to be implemented under the tariff-based competitive bidding process prescribed. For the procurement of transmission services, the BPC shall adopt a single stage two envelope tender process featuring the requirement of a request for proposal with the preparation of bid documents as per the prescribed requirements. The initial price offer submitted online with the request for proposal will be evaluated based on annual transmission charged for all components covered under the package as quoted by the bidder. The bidders will undertake in the prescribed e-reverse bidding process with the minimum of two qualified bidders.
On selection of the bidder and issue of letter of intent from the BPC, the selected bidder shall execute the share purchase agreement to acquire the special purpose vehicle created for the project to become the transmission service provider in accordance with the bid made and consequently execute the transmission service agreement in accordance with the TBCB Guidelines. The transmission service provider shall accordingly be required to make an application for the grant of a transmission licence to the appropriate commission within five working days from the date of execution of the share purchase agreement for the acquisition of the special purpose vehicle.
Bidding Trajectory for Renewable Energy Power Projects
The MNRE has prescribed an annual bidding trajectory for RE power bids to be issued by Renewable Energy Implementation Agencies (REIAs). Bids for 50 GW per annum RE capacity, with at least 10 GW per annum Wind power capacity, are to be issued each year from 2023-24 to 2027-28.
State Level Policies, Guidelines for Promotion and Establishment of Renewable Energy Projects
In addition, projects developed by the SPVs in various states are subject to state level policies. Various states in India have from time to time announced administrative policies and regulations in relation to solar and wind power projects and related matters. Typically, these state policies are framed by nodal agencies responsible for development of renewable energy and energy conservation in the respective states. These policies provide for, among others, the incentives of setting up of wind and/or solar power projects in the relevant states, procedures and approvals required for setting up of wind and solar power projects within the state, regulation of grid integration, connectivity and security, and tariff determination. These state-specific policies and regulations have material effects on our business as PPAs between project developers and state offtakers are entered into in accordance with the applicable state policies and regulations. Accordingly, these PPAs are standard form contracts and the project developers have no flexibility in negotiating the terms of the PPAs. The majority of our solar power plant generation occurs in States of Karnataka, Madhya Pradesh, Andhra Pradesh, Gujarat, Rajasthan, Telangana and Maharashtra. Some key regulations applicable in these states are described below.
Rajasthan
The Rajasthan Renewable Energy Corporation Limited is the nodal agency responsible for promoting and developing renewable energy in the state of Rajasthan.
The Government of Rajasthan notified the Rajasthan Wind and Hybrid Energy Policy, 2019 which came into effect from December 18, 2019 and will remain in force until superseded by another policy. The Rajasthan Wind and Hybrid Energy Policy, 2019 is aimed at achieving 2,000 MW of wind power capacity and 3,500 MW of wind-solar hybrid power projects in Rajasthan by 2024-25. In addition, this policy also aims to promote development of wind and wind-solar hybrid power projects aimed at captive consumption and sale to third parties within and outside Rajasthan, and further enable fulfilment of the RPO of the distribution companies (as determined by the Rajasthan Electricity Regulatory Commission).
The Government of Rajasthan has formulated the Rajasthan Solar Energy Policy, 2019 which has come into effect on December 18, 2019 and will remain in force until superseded or modified by another policy. The Rajasthan Solar Energy Policy, 2019 aims for the state of Rajasthan to be a major contributor for achieving the national target of 100 GW capacity of solar energy as a part of the global commitment. All such power projects have been considered to be eligible industries under schemes administered by the Industries Department of Government of Rajasthan.
The Rajasthan Electricity Regulatory Commission (Forecasting, Scheduling, Deviation Settlement and Related Matters of Solar and Wind Generation Sources) 2017, as amended (“RERC Forecasting Regulations”) were notified with an aim to facilitate large scale grid integration of wind and solar projects while maintaining grid security, reliability and security as envisaged under the grid code through forecasting, scheduling and commercial mechanisms for settlement of deviations for wind and solar projects.
The Rajasthan Electricity Regulatory Commission (RERC) issued the Renewable Purchase Obligation (RPO) Regulations on 13th June 2023, highlighted the RPO targets for wind, hydro and Energy storage for Fiscal 2030. Targets include RPO of 6.94% for wind, 2.82% for Hydro and 4% for Energy storage by Fiscal 2030. Wind compliance shall be met only by energy produced from projects commissioned
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after 31 March 2022; Hydro power obligation shall be met only by energy produced from large hydro projects (including PSP) and small hydro projects commissioned after 8th March 2019 and Energy storage obligation may be met if 85% of total energy storage stored annually is procured from RE sources.
The Government of Rajasthan has issued Green Hydrogen Policy on 29th September 2023 to achieve 2 MTPA Green Hydrogen and derivatives production capacity by 2030. The target also includes 1 GW electrolyser manufacturing capacity and to have 10% share of green hydrogen in natural gas pipelines for the gas produced within Rajasthan by 2030. Government will be giving 50% waiver on electricity duty, transmission and wheeling charges for 10 years and 100% waiver on Cross Subsidy surcharge and Additional surcharge for 10 years. Monthly banking allowed up to 1/3 of energy injected on payment of banking charges.
The RERC has issued Renewable Energy Policy on 6th October 2023 with a target to achieve 90 GW by Fiscal 2030. The 90 GW capacity includes 65 GW solar, 15 GW solar-hybrid and 10 GW hydro, PSP and BESS. The policy fosters renewable energy parks through public-private partnerships, with the government investing up to 50% equity. State will promote hybridization of existing Conventional Thermal Power Plants by allowing setting up of RE Plants by the Conventional Power Generators.
Karnataka
The Karnataka Renewable Energy Development Limited is the agency responsible for promoting and developing renewable energy in the state of Karnataka. The state government of Karnataka has formulated the Karnataka Renewable Energy Policy 2022 -2027, as amended (“Karnataka RE Policy”) which will remain in effect for a period of 5 years or until new policy is announced. The Karnataka RE Policy, as amended, aims to harness a minimum of 10 GW by 2027 in multiple phases. To advance the development of renewable energy markets and to stimulate the sustainable economic growth through green investments in the state, the Karnataka RE Policy focuses on development of key markets in the state of Karnataka. The Karnataka RE Policy provides incentives for energy sale as per industrial policy.
The Karnataka Electricity Regulatory Commission (KERC) (Forecasting, Scheduling, Deviation settlement and related matters for Wind and Solar Generation sources) 2015, as amended on December 13, 2022, (“KERC DSM Regulations”) were notified with an aim to facilitate large scale grid integration of wind and solar projects while maintaining grid security, reliability and security as envisaged under the grid code through forecasting, scheduling and commercial mechanisms for settlement of deviations for wind and solar projects. All wind and solar generating stations with installed capacity of 10 MW and above and 5 MW and above, respectively, fall under the purview of KERC DSM Regulations. Wind and solar power generators connected to the state grid forecast and schedule their power generation on a week ahead, day ahead and intra-day basis. The schedule by wind and solar generators may be revised by giving advance notice to the relevant State Load Despatch Centre. Depending upon the degree of variation from the schedule provided and actual generation in 15-minute time blocks, wind and solar generators are liable to pay/receive the charges for deviations as per the formula prescribed under the KERC DSM Regulations.
The KERC (Terms and Conditions for Green Energy Open Access) regulations issued on February 12, 2023 in accordance with Green Energy Open Access Rules notified by the Ministry of Power.
The KERC issued the Repowering Policy for Wind Projects on 2nd January 2024 for technologically obsolete turbines in line with central government recommendations. BIS compliant turbines under 2 GW that have completed their design life are eligible for repowering. DISCOMs will continue to procure quantum equal to average of previous 3 years generation under existing PPAs for 25 years starting from COD of original project. Exemption is given for up to 2 years for installation of new turbines. Projects owners are allowed to sell additional power to other consumers subject to refusal of Discoms. Projects to be commissioned within 2 years of receiving consent letter.
Madhya Pradesh
The New and Renewable Energy Department of the Government of Madhya Pradesh is the nodal agency responsible for implementing various programs and policies of the Government of India and the Government of Madhya Pradesh for the renewable energy sector.
The Government of Madhya Pradesh implemented the Madhya Pradesh Renewable Energy Policy 2022, as amended from time to time (“MP RE Policy”). The MP RE Policy shall remain in operation for a period of five years from the date of notification in the Madhya Pradesh state gazette or until a new policy is notified by the state government. The MP RE Policy aims to develop the state into a renewable energy hub with a focus on creation of renewable energy equipment manufacturing eco-system, facilitate large scale adoption and deployment of renewable energy in the state, facilitate the design, development and operationalization of new and innovative technologies and procurement approaches which promote design and deployment of new technologies in the renewable energy, renewable energy hybrid and energy storage space in order to provide reliable and schedulable power at more cost competitive rates. Under this policy, certain
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incentives have been proposed to be granted including, providing an exemption for 10 years from payment of electricity duty, and reimbursement of stamp duty on government land and wheeling charges.
The Madhya Pradesh Electricity Regulatory Commission (Forecasting, Scheduling, Deviation Settlement Mechanism and Related Matters of Wind and Solar Generating stations) Regulations, 2018, as amended (“MPERC Forecasting Regulations”) were notified with an aim to facilitate grid integration of wind and solar energy generated in Madhya Pradesh while maintaining grid stability and security as envisaged under the State Grid Code and the Electricity Act, through forecasting, scheduling and a mechanism for the settlement of deviations by wind and solar based generators.
The Madhya Pradesh Electricity Regulatory Commission (Methodology for determination of open access charges and Banking charges for Green energy open access consumers) issued regulations on March 9, 2023, with the objective of determining the open access charges and banking charges for green energy open access consumers.
Andhra Pradesh
The New and Renewable Energy Development Corporation of Andhra Pradesh Limited is the agency responsible for promoting and developing renewable energy in the state of Andhra Pradesh. The Government of Andhra Pradesh has issued the Andhra Pradesh Wind Power Policy, 2018, as amended (“AP Wind Policy 2018”) The AP Wind Policy 2018 seeks to achieve capacity addition through wind power in the next five years in Andhra Pradesh. The main objectives of the AP Wind Policy 2018 are to encourage and develop wind power energy generation in Andhra Pradesh in order to garner investments for setting up manufacturing facilities and attracting private investment for establishment of large wind power projects. The AP Wind Policy 2018 will remain applicable until 2023, and wind power projects commissioned under the AP Wind Policy 2018 will be eligible for incentives for a period of 10 years from the date of commissioning.
The Government of Andhra Pradesh has issued Andhra Pradesh Solar Power Policy, 2018, as amended (“AP Solar Policy 2018”) on January 3, 2019 superseding the Andhra Pradesh Solar Power Policy, 2015 due to the current trend of falling solar prices. Pursuant to AP Solar Policy 2018, the state government aims to achieve an addition to solar power capacity of minimum 5,000 MW in the next five years. The AP Solar Policy 2018 will remain applicable until 2023. The key incentives under this policy include deemed industry status for power generators under this policy and exemption from obtaining pollution control no-objection certificates; projects set up under state government solar parks are exempted from obtaining registration from the nodal agency.
The Andhra Pradesh Electricity Regulatory Commission Forecasting, Scheduling and Deviation Settlement of Solar and Wind Generation Regulations, 2017 (“AP Forecasting Regulations”) apply to every wind and solar energy generator in Andhra Pradesh connected to the transmission network of the Transmission Corporation of Andhra Pradesh and/or the distribution network of the DISCOMs (including those connected through pooling stations) and supplying power to DISCOMs or to third parties through open access or for captive consumption through open access, and selling power within or outside the state.
The Andhra Pradesh Electricity Regulatory Commission issued the Green Energy Open Access, Charges and Banking Regulations on 1st May 2024. Under the new framework, the regulation introduces more accessible measures for energy consumers and producers to invest and participate in green energy initiatives. This initiative is seen as a crucial step toward achieving the state’s ambitious renewable energy goals. The regulation facilitates easier access for consumers to green energy sources, which is expected to not only boost the local green energy market but also support the national agenda on sustainable energy. The regulation also revises the charges associated with green energy procurement. The APERC has laid out a structured tariff system that incentivises the adoption of renewable energy sources by making them more economically viable for consumers. This change is anticipated to attract more investments into the renewable sector and is part of a broader effort to make green energy a more attractive option compared to conventional energy sources. Additionally, the regulation introduces new banking rules related to energy production and consumption. These rules are designed to help manage the energy produced from renewable sources more efficiently, allowing for better energy storage and distribution across the state.
Gujarat
The Gujarat Wind Power Policy 2016, as amended (“Gujarat Wind Policy”) was notified on August 2, 2016 and will remain in force until June 30, 2021. The Government of Gujarat, in continuation of previous notifications, and pursuant to a notification dated March 31, 2023, has extended the Gujarat Wind Policy until September 30, 2023 or until the announcement of a new policy, whichever is earlier. The aim of the Gujarat Wind Policy has been to promote generation of power from clean and green sources of energy and to entail a more conducive investment framework in order to encourage more private sector participation for development of wind power projects. The Gujarat Energy Development Agency is the nodal agency for implementation of the Gujarat Wind Power Policy. Under the Gujarat Wind Policy, wind projects installed and commissioned during the operative period shall become eligible for the benefits and incentives declared under the policy for a period of 25 years from their date of commissioning or for the lifespan of the projects, whichever is earlier. The
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Gujarat Wind Power Policy imposes an obligation on every distribution licensee to purchase electricity from renewable sources in accordance with the relevant Gujarat Electricity Regulatory Commission orders.
The Gujarat Wind-Solar Hybrid Power Policy 2018, as amended (“Gujarat WSH Policy”) was notified on June 20, 2018 and will remain in force until June 19, 2023. The Gujarat WSH Policy aims to provide a framework for promotion of large grid connected wind solar hybrid systems for optimal and efficient utilization of transmission infrastructure, achieving grid stability and integration of emerging technologies like energy storage systems. The Gujarat Energy Development Agency is the nodal agency for implementation of the Gujarat WSH Policy. Under the Gujarat WSH Policy, projects installed and commissioned during the operative period shall become eligible for the benefits and incentives declared under the policy for a period of 25 years from their date of commissioning or for the lifespan of the projects, whichever is earlier.
The Gujarat Electricity Regulatory Commission (Forecasting, Scheduling, Deviation Settlement and Related Matters for Solar and Wind Generation Sources) Regulations, 2019 apply to every wind and solar power generator having combined installed capacity of 1 MW and above and connected to the state grid, whether independently or through pooling substations, and generating power whether for self-consumption or for sale within or outside the state.
The state government has also announced Gujarat Solar Power Policy, 2021 on December 29, 2020 to align the solar power policy generation in the state with expansion of India’s solar power generation goals. This policy shall remain effective until December 31, 2025 and all the solar power systems installed and commissioned during the period of this policy are entitled to the incentives offered under this policy for a period of 25 years from the date of commissioning. The key incentives offered under this policy include removal of restrictions on installed capacity, offering of power at pre-fixed prices by the self-owned systems, no transmission and wheeling charges exemption from cross subsidy and additional surcharges.
The Gujarat Energy Development Agency (GEDA) as of 21 September 2023 has directed state authorities to grant necessary permissions to project developers to set up inter-state and intra-state connected renewable power projects in the state.
The GEDA published the Renewable Energy Policy on 4th October 2023 for a period up to September 2028. The state target is that RE becomes 50% of total installed capacity by 2030. The Policy encourages setting up wind, solar and hybrid (wind solar) power projects in the state of Gujarat. Benefits under the policy will be extended to a project for 25 years from the date of commissioning or its lifespan, whichever is earlier. Under this policy banking of RE power has been allowed on a monthly basis and transfer of green attributes will only be available for obligated entities up to their RPO target.
The GERC also issued the Green Open Access Regulations (GEOA) on 20th February 2024. The regulations apply to those interested in availing of GEOA with a contracted demand or sanctioned load of at least 100 KW. This includes consumers, green energy generators, or licensees with single or multiple connections aggregating to 100 KW or more within the same electricity division of a distribution licensee. The objective of these regulations is to ensure fair and non-discriminatory access to green energy, including renewable energy sources like solar, wind, biomass, and others. There are three categories of Green Energy Open Access: Long-term, Medium-term, and Short-term. Long-term access extends beyond 12 years but not exceeding 25 years, while medium-term access spans from three months to three years. Short-term access is for periods of up to one month at a time.
The Gujarat Electricity Regulatory Commission (GERC) has introduced the Tariff framework for Wind-Solar Hybrid Projects in Gujarat on 22nd February 2024. This framework aims to regulate the purchase of electricity from such projects, including those with storage capabilities, and address various commercial issues. According to the new order, applicable to projects commissioned after June 19, 2023, the GERC extends its previous tariff framework, which expired on March 31, 2023. The framework emphasises the promotion of renewable energy sources and outlines guidelines for procurement through competitive bidding processes. It also addresses the conversion of existing standalone Wind or Solar projects into hybrid projects, allowing for the addition of new capacity with mutual consent between developers and distribution companies.
Telangana
The Telangana State Renewable Energy Development Corporation Limited is the nodal agency responsible for promoting and developing renewable energy in the state of Telangana. The state government has issued Telangana Solar Power Policy 2015 to realise and harness the potential of solar power of the state and contributing long-term energy security to the state. This policy was effective for five years. The policy aims to incentivise usage of solar energy to generate electricity in the form of exempting electricity duty, 100% refund of VAT/SGST for all the solar power project inputs for a period of 5 years, and 100% refund of stamp duty for land purchased for development of solar power project. All solar projects that are commissioned during the operative period shall be eligible for the incentives declared under this policy, for a period of 10 years from the date of commissioning or as specified.
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The state government has also issued a Draft Wind Power Policy 2016 in order to harness the potential to generate wind power of the state by promoting public as well as private investment in wind power generation in the state, further contributing to long-term energy of the state by combining renewable with thermal power generation. Through this policy, the state government aims to generate power through wind energy through, inter alia, forming a wind policy cell for a single window clearance of applications, exempting the ceiling limit of Telangana Land Reforms (Ceiling on Agricultural Holdings) Act, 1973, exempting wheeling and transmission charges for captive use of power within the state, exempting electricity duty, refunding of VAT/SGST for a period of five (5) years and refund of stamp duty for the land purchased for wind power projects.
The Telangana State Electricity Regulatory Commission (Forecasting, Scheduling, Deviation Settlement and Related Matters of Solar and Wind Generation sources) 2018 apply to all wind and solar generators in Telangana connected to the intra state transmission system. These Regulations aim to facilitate integration of solar and wind generating stations while maintaining the stability of the grid.
The Telangana State Electricity Regulatory Commission (TSERC) (Terms and Conditions of Open Access), Regulation was issued on 15th March 2024, consumers who have a contracted or sanctioned load of 100 kW or more, including those who aggregate multiple connections to achieve a total of 100 kW within the same electricity division of a power discom, are eligible to obtain power through green energy open access (GEOA).
Maharashtra
The Maharashtra Energy Development Agency is the nodal agency for promoting and developing the renewable energy in the state of Maharashtra. The state government has issued a Comprehensive Policy for Grid connected Power Projects based on New and Renewable (Non-conventional) Energy Sources on July 20, 2015 to generate and promote electricity from projects based on renewable energy sources including solar, wind, bagasse or biomass co-generation, small and hydro and from agriculture, mineral, bio-medical, industrial waste. The state government has also issued Unconventional Energy Generation policy in December 2020 to promote non-conventional source-based energy in the state. Pursuant to this policy, the state government intends to address power outage issues and pollution in the state due to rapid industrialization and urbanization.
In terms of this policy, a target for wind power projects of 5,000 MW was set, out of which 1,500 MW out of that would be developed for meeting renewable purchase obligation of distribution licensees. Such wind projects developed under this policy would be eligible to be registered as ‘industrial units’ with the industrial department of state government. Pursuant to this policy, solar power projects are provided with various incentives including (a) private land owners could give their own land on a lease or rental basis for developing solar power projects; (b) exemption from obtaining approval from the State Pollution Control Board; (c) granting of open access by distribution licensees to the project developers opting for captive use or for third-party sale and; (d) exemption from levy of electricity duty for the first ten (10) years for solar power projects established for captive use.
The Maharashtra Electricity Regulatory Commission (Forecasting, Scheduling and Deviation Settlement for Solar and Wind Generation) Regulations, 2018 (“MERC F&S Regulations”) apply to wind and solar energy generators in the state of Maharashtra connected to the intra -state transmission system and using the power generated for self-consumption or sale within or outside the State. In accordance with the MERC F&S Regulations, the power generators are required to pay a charge as specified in the MERC F&S Regulations for deviating from the generation specified in the schedule by State Load Despatch Centre from time to time. However, the Maharashtra Electricity Regulatory Commission, in its order dated August 12, 2020, has directed a working group to undertake a detailed scrutiny of computation of state periphery charges in the deviation settlement mechanism bills and has stated that it shall decide further course of action with respect to the collection of such charges.
The Maharashtra Energy Development Agency (MEDA) issued the state’s Green Hydrogen Policy on 31st October 2023 to achieve 500 kTPA Green Hydrogen and derivatives production by 2030. The incentives given by the government includes 50% waiver on transmission and wheeling charges and 100% waiver on electricity duty for 10 years. Hybrid renewable projects will be given 60% waiver on transmission and wheeling charges and 100% waiver on electricity duty for 15 years. Green Hydrogen production projects: up to 3 projects with total capacity of 100 kTPA subject to maximum individual project capacity of 50 kTPA will get subsidy of 30% of capital cost, 50% waiver on transmission and wheeling charges for 20 years and 100% waiver on electricity duty for 15 years. Hydrogen pipeline will get INR 250 million/km capital cost subsidy subject to maximum of 10 km and 1% interest rate subsidy. Other subsidy includes 100% waiver on land tax on land tax, excise duty and stamp duty on land acquisition.
Environmental Laws
The Central Pollution Control Board of India (“CPCB”) a statutory organization established in 1974 under the Ministry of Environment, Forest and Climate Change (“MoEF&CC”) is responsible for setting the standards for maintenance of clean air and water and providing technical services to the MoEF&CC.
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CPCB has classified industrial sectors under the red, orange, green and white categories. The newly introduced white category pertains to those industrial sectors which are practically non -polluting, including solar power generation through photovoltaic cells, wind power projects of all capacities and mini hydroelectric power. In relation to the white category of industries, only intimation to the relevant State Pollution Control Board is required, and there is no requirement to obtain a consent to operate for this category. However, the pollution control laws in India are required to be adhered to subject to their applicability on the entities prescribed under the relevant legislations.
Solar PV Cell manufacturing plant is covered under red category and there is a requirement to obtain consent to operate in this category.
National Action Plan on Climate Change
The National Action Plan on Climate Change, or the “NAPCC,” issued by the Government of India in 2008 has recommended that the national renewable energy generation standard be set at 5% of total grid purchase and that it be increased by 1% each year for ten (10) years, with the option for the SERCs to set higher minimum percentages than 5%, to ensure that by 2020, 15% of the total power capacity is generated from renewable energy sources. NAPCC also recommends imposition of penalty under the Electricity Act in case of utilities falling short to meet their RPOs.
Green Hydrogen Policy
In January 2023, the Ministry of New and Renewable Energy Green Hydrogen Mission was notified to produce 5 MMT of Green Hydrogen per annum by 2030, with potential to reach 10 MMT per annum. The Mission will support replacement of fossil fuels and fossil fuel-based feedstocks with renewable fuels and feedstocks based on Green Hydrogen. This will include replacement of hydrogen produced from fossil fuel sources with Green Hydrogen in ammonia production and petroleum refining, blending Green Hydrogen in city gas distribution systems, production of steel with Green Hydrogen, and use of Green Hydrogen-derived synthetic fuels (including Green Ammonia, and Green Methanol) to replace fossil fuels in various sectors including mobility, shipping, and aviation. The Mission also aims to make India a leader in technology and manufacturing of electrolysers and other enabling technologies for Green Hydrogen.
Scheme Guidelines for implementation of “Strategic Interventions for Green Hydrogen Transition (SIGHT) Programme – Component I: Incentive Scheme for Electrolyser Manufacturing”
MNRE notified its scheme guidelines for implementation on 28th June, 2023. These incentives are intended to promote quick scale-up, technological advancement, and cost reduction for electrolysers in India. The financial outlay for the scheme is Rs 44.4 billion. The programme will be implemented from 2025-26 to 2029-30. The scheme would give funding for electrolyser manufacturing in the form of ‘Rs per kW’ According to manufacturing capability, the base incentive will begin at Rs.4,440/kW in the first year and subsequently decrease on an annual basis. The incentives suggested under this programme will be available for 5 years from the start of electrolyser manufacturing.
Subsequently, Scheme Guidelines for implementation of “Strategic Interventions for Green Hydrogen Transition (SIGHT) Programme – Component I: Incentive Scheme for Electrolyser Manufacturing Tranche – II” where published by MNRE on 16th March 2023.
Scheme Guidelines for implementation of “Strategic Interventions for Green Hydrogen Transition (SIGHT) Programme – Component II: Incentive Scheme for Green Hydrogen Production (under mode 1)”
MNRE notified its scheme guidelines for implementation on 28th June, 2023. The scheme has a budget outlay of Rs 130.5 billion and will be implemented from 2025-26 to 2029-30. A direct incentive in terms of ‘Rs per kg’ of green hydrogen production will be paid under the scheme for a period of three years from the date of beginning of green hydrogen production. Beneficiaries of the scheme will be chosen through a competitive process.
Subsequently, Scheme Guidelines for Implementation of Strategic Interventions for Green Hydrogen Transition (SIGHT) Programme Component-II (under Mode-2A) and Component-II: (under Mode-2B) were published by MNRE on 16th January 2024.
Scheme Guidelines for Implementation of Pilot Projects for Use of Green Hydrogen in the Shipping and Steel Sectors under the National Green Hydrogen Mission (NGHM)
The MNRE issued scheme guidelines on February 1, 2024 and February 2, 2024 pertaining to the shipping and steel sectors. Along with other initiatives, the Ministry of Ports, Shipping, and Waterways (MoPSW and Ministry of Steel will implement pilot projects in the shipping and steel sector to replace fossil fuels and fossil fuel-based energy sources with green hydrogen and its derivatives. These pilot projects will be implemented through the MoPSW), Ministry of Steel, and the other implementing agencies nominated under the scheme guidelines. With respect to shipping, two areas have been identified as focus areas under the pilot projects: retrofitting existing ships to
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enable them to run on green hydrogen or its derivatives, and developing bunkering and refuelling facilities in ports on international shipping lanes for fuels based on green hydrogen. The scheme will be implemented with a total budgetary outlay of RS. 115 crores through the financial year ended 2026. With respect to steel, three areas have been identified as focus areas for the pilot projects: the use of hydrogen in the ironmaking process, the use of hydrogen in blast furnaces, and the substitution of fossil fuels with green hydrogen as a fuel source. The scheme will also support pilot projects involving any other innovative use of hydrogen for reducing carbon emissions in iron and steel production. The scheme will be implemented with a total budgetary outlay of Rs. 455 crores through the financial years 2030.
Scheme Guidelines for the implementation of R&D Scheme under the National Green Hydrogen Mission
The MNRE issued the scheme guidelines on March 15, 2024. The guidelines are intended to provide support to aspects of the green hydrogen value chain, namely, production, storage, compression, transportation, and utilization. The R&D projects supported under the Mission will be goal-oriented, time-bound, and suitable for scaling. In addition to industrial and institutional research, innovative MSMEs and start-ups working on new technological development will also be supported under the scheme guidelines Subsequent to the issuance of the guidelines, the MNRE issued a call for proposals on March 16, 2024.
Scheme Guidelines for Skill Development under the National Green Hydrogen Mission
The scheme guidelines were issued by the MNRE on March 16, 2024. The scheme guidelines support a comprehensive skill gap analysis across various segments of the green hydrogen ecosystem, the creation and maintenance of a registry of skills required by the value chain, design and the development of curricular elements for educational institutions at different levels for skills training.
Scheme Guidelines for Setting Up Hydrogen Hubs in India under the National Green Hydrogen Mission (NGHM)
The scheme guidelines were issued by the MNRE on March 15, 2024. The objectives of the scheme are to: Identify and develop regions capable of supporting large-scale production and/or utilization of hydrogen as green hydrogen hub, develop green hydrogen projects inside the hubs in an integrated manner to allow the pooling of resources and achievement of scale, enhance the cost-competitiveness of green hydrogen and its derivatives vis-à-vis fossil-based alternatives, maximise the production of green hydrogen and its derivatives in India, encourage large-scale utilization and exports of green hydrogen and its derivatives and enhance the viability of green hydrogen assets across the value chain.
Energy Conservation (Amendment) Bill, 2022
The Energy Conservation (Amendment) Bill, 2022, was passed in December 2022, with the intention of encouraging the use of biofuels, green hydrogen, and other renewable energy sources, as well as promoting the trading of carbon credits. The bill includes key provisions regarding: mandating a “minimum use” of non-fossil fuel sources for industries (mining, steel, cement, textile, chemicals, and petrochemicals) and commercial buildings, enabling government authorities to specify a system for trading carbon credits and for carbon markets, and enhancing the scope and coverage of the Energy Conservation Building Code.
Measures to promote Hydropower:
In March 2019, the Government of India issued measures to promote hydropower, including: declaring large hydropower projects (>25 MW) as renewable energy, establishing hydropower tariffs, providing budgetary support for flood moderation and storage hydroelectric projects (HEPs) and providing budgetary support for enabling infrastructure.
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The following diagram depicts the simplified organizational structure of ReNew Global as of the date hereof. The detailed shareholding of the Company is disclosed in Item No. 7
The significant subsidiaries of ReNew Global are listed below. ReNew Global holds securities in these material subsidiaries either directly or through ReNew India (or its subsidiaries).
Name |
|
Country of incorporation and place of business address |
|
Nature of business |
|
Proportion of ordinary shares held by ReNew Global |
|
ReNew Private Limited (Formerly known as ReNew Power Private Limited) |
|
India |
|
Renewable Energy |
|
94.01% |
|
ReNew Wind Energy (Sipla) Private Limited |
|
India |
|
Renewable Energy |
|
94.01% |
|
ReNew Green Energy Solutions Private Limited |
|
India |
|
Renewable Energy |
|
94.01% |
|
Ostro Kannada Power Private Limited |
|
India |
|
Renewable Energy |
|
94.01% |
|
ReNew Energy Markets Private Limited (Formerly known as ReNew Vayu Power Private Limited) |
|
India |
|
Renewable Energy |
|
94.01% |
|
ReNew Solar Power Private Limited |
|
India |
|
Renewable Energy |
|
94.01% |
|
ReNew Akshay Urja Limited |
|
India |
|
Renewable Energy |
|
94.01% |
|
ReNew (Jharkhand One) Private Limited |
|
India |
|
Renewable Energy |
|
94.01% |
|
RenServ Global Private Limited (Formerly known as ReNew Services Private Limited) |
|
India |
|
Renewable Energy |
|
94.01% |
|
Renew Surya Roshni Private limited |
|
India |
|
Renewable Energy |
|
94.01% |
|
ReNew Surya Ravi Private Limited |
|
India |
|
Renewable Energy |
|
94.01% |
|
ReNew Jal Urja Private Limited |
|
India |
|
Renewable Energy |
|
94.01% |
|
India Clean Energy Holdings |
|
Mauritius |
|
Investor Company |
|
100.00% |
|
Diamond II Limited |
|
Mauritius |
|
Investor Company |
|
100.00% |
|
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We operate our business through a number of subsidiaries and branch offices, which are located in India. Our principal operational office is located at Commercial Block-1, Zone 6, Golf Course Road, DLF City Phase V, Gurugram 122 009, Haryana, India; and our registered office is located at 138, Ansal Chambers II, Bhikaji Cama Place, Delhi 110 066, India.
We also manage our operations through various regional offices in the Indian cities including Bangalore, Mumbai, Hyderabad, Jaipur, Ahmedabad, Bhopal, Chennai and various site offices in India.
Our utility-scale wind energy projects are located on land we purchase from landowners or arranged by the OEMs/developer and on government revenue and forest land leased to OEMs/ developer or its developers from state governments and sub-leased to us. Our OEMs/developer acquire land for our turnkey projects either directly from landowners or by entering into long-term leases (with respect to government revenue or forest land) with state governments. For a discussion of the related risks, see the section titled “Risk Factors – The growth of our business depends on developing and securing rights to sites suitable for the development of projects” under Item 3.D.
The terms of our leases with state governments typically range from 20 to 30 years. To the extent we sub-lease such land from OEMs/developer, the term of such sub- leases will be for the remaining duration of the lease period under the relevant master lease agreement. Our solar energy projects are generally located on land purchased directly from landowners or arranged by the developer/land co-ordinator, except some of our projects which are located on government land or solar parks and for which we have entered into land use agreements with the state governments.
The table below provides an aggregate of our principal owned and leased properties as of March 31, 2024:
Type |
Total Area |
|
Owned Area |
|
Leased Area |
|
Government Land |
|
Others (solar parks (2)) |
|
|
|
(in acres (1)) |
|
|
||||||||
Utility-scale wind energy projects |
9,642 |
|
5,861 |
|
3,781 |
|
|
|
|
|
|
Utility-scale solar energy projects |
37,442 |
|
14,307 |
|
22,515 |
|
122 |
|
500 |
|
|
Total |
47,085 |
|
20,168 |
|
26,296 |
|
122 |
|
500 |
|
|
Note: Details mentioned above are ATS as Owned Area & ATL as Leased Area.
Notes:
ITEM 4A. UNRESOLVED STAFF COMMENTS
Not applicable.
81
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion of our business, financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this Report. Some of the statements in the following discussion are forward-looking statements that reflect our current views with respect to future events and financial performance. Our actual results could differ materially from those anticipated in these forward- looking statements as a result of certain factors, such as those set forth in the section titled “Key Information. — Risk Factors” under Item 3.D and elsewhere in this Report. Our audited consolidated financial statements as of March 31, 2024 and for each of the three years in the period ended March 31, 2024, discussed below have been prepared in accordance with IFRS as issued by the IASB.
Management’s discussion and analysis of financial condition and results of operations
Overview
We are one of the largest utility-scale renewable energy solutions providers in India in terms of total commissioned capacity. We operate wind, solar and hydro energy projects in India and as of May 31, 2024 we had a total operational capacity of 9.52 GW, out of which 8.87 GW is commissioned and 650 MW is generating pre-commissioning revenue through sales in the merchant market, and an additional 6.1 GW of committed capacity. We were founded in 2011 and are committed to drive a change in India’s energy portfolio by delivering cleaner and smarter energy solutions. We develop, build, own and operate utility-scale wind energy projects, utility-scale solar energy projects, hydro energy project, utility-scale firm power projects and corporate energy projects, and we are in the process of providing intelligent energy solutions such as peak power supply, round-the-clock supply and storage services. Our projects are based on proven wind, solar and storage technologies, covered under long-term PPAs with creditworthy offtakers including central government agencies, public utilities (specifically state electricity utilities) and private industrial and commercial consumers in India. We are supported by high quality long-term global investors such as CPP Investments, ADIA, JERA, SACEF and public markets shareholders and we are led by an experienced management team under the leadership of our Founder, Chairman and Managing Director, Mr. Sumant Sinha, who has extensive experience across our operational and strategic focus areas.
Our strong track record of organic and inorganic growth is demonstrated by an increase in our operational capacity which has grown 4.8 times from the year ended March 31, 2017 to March 31, 2024. We have achieved our market leading position (in terms of total commissioned capacity) in the Indian renewable energy industry by delivering grid parity wind, solar and hydro energy projects, against the backdrop of the Government of India’s policies to promote the growth of renewable energy in India. We have a robust financial position and demonstrated access to a diversified pool of capital from Indian and international investors, lenders and other capital providers. Our total income has grown from Rs. 69,195 million in the year ended March 31, 2022 to Rs. 96,531 million in the year ended March 31, 2024.
Significant Factors Affecting the Group’s Results of Operations
Significant growth
We commenced operations in 2012 and our portfolio has grown from a 25.2 MW wind energy project in the state of Gujarat in India to more than 150 renewable energy projects with a total capacity of 15.6 GW as of May 31, 2024 (total capacity was 13.5 GW as of March 31, 2024) across nine states in India.
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The table below sets forth additions to our commissioned capacity as of the dates indicated:
|
|
Additions in commissioned capacity (MW) (1) |
|
||||||||||||
|
|
As of March 31 |
|
||||||||||||
|
|
2022 |
|
2023 |
|
2024 |
|
||||||||
|
|
Organic Growth |
|
|
Acquisitions (1) |
|
Organic Growth |
|
Acquisitions (1) |
|
Organic Growth |
|
|
Acquisitions (1) |
|
Utility-scale wind |
|
171.80 |
|
|
— |
|
78.40 |
|
— |
|
291.08 |
|
|
— |
|
Utility-scale solar |
|
1305.00 |
|
|
260.00 |
|
— |
|
— |
|
(12) |
(3)(4)(5) |
|
— |
|
Utility-scale hydro |
|
|
|
|
99.00 |
|
— |
|
— |
|
— |
|
|
— |
|
Distributed solar |
|
(117) |
(2) |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
Corporate solar |
|
231.67 |
|
|
— |
|
77.00 |
|
— |
|
406.30 |
|
|
— |
|
Corporate wind |
|
17.60 |
|
|
— |
|
39.60 |
|
— |
|
173.80 |
|
|
— |
|
Others |
|
|
|
|
— |
|
219.30 |
|
— |
|
31.50 |
|
|
— |
|
Total commissioned capacity |
|
7,567 |
|
|
|
|
7,981 |
|
|
|
8,871 |
|
|
|
|
Notes:
The increased scale and production of our project portfolio enables us to benefit from economies of scale and reduce the impact of project-specific risks. We expect to further increase our total commissioned capacity both organically and through acquisitions, and accordingly our results of operations in future periods will be affected substantially.
Power purchase agreements and tariffs
The majority of our revenue is attributable to units of power that we sell, and therefore our results of operations are affected by the tariffs we charge for the units of power that we sell. Almost all power generated from our projects is sold under long-term PPAs to central and state government agencies and public utilities, and private commercial and industrial off-takers. Our PPAs are generally structured in the following ways:
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For further details on our PPAs, see the section titled “Business Overview — Power purchase agreements” under Item 4.B.
In line with government policies, most Indian states have moved towards the competitive bidding model for determining tariffs, which has led to a decrease in tariff rates as the lowest bidder wins the project. Although tariff rates vary from state to state, tariffs have declined significantly for both wind and solar energy power over the years, and our ability to estimate costs and competitively bid for projects will affect our results of operations.
Our results of operations are also impacted by the ability and willingness of our customers to fulfil their contractual obligations under the relevant PPA.
Utilization of power generation assets
We regularly review a number of specific metrics, including the following key operating metrics, to evaluate our business performance, identify trends affecting our business and make strategic decisions. The following table represents amounts of wind and solar power generated and sold, our weighted average commissioned capacity, along with our plant load factor for the years indicated:
|
|
|
Year ended March 31, |
|
|||||||||||||||
|
|
|
2022 |
|
2023 |
|
2024 |
|
|||||||||||
|
|
Wind |
|
Solar |
|
Wind |
|
Solar |
|
Wind |
|
Solar |
|
||||||
Commissioned capacity (1) (GW) |
|
|
3.78 |
|
|
3.69 |
|
|
3.97 |
|
|
3.91 |
|
|
4.46 |
|
|
4.31 |
|
Pre-commissioned revenue generating capacity (5) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
0.27 |
|
|
0.38 |
|
Weighted average operational capacity (2) (GW) |
|
|
3.66 |
|
|
2.78 |
|
|
3.88 |
|
|
3.72 |
|
|
4.28 |
|
|
4.09 |
|
Plant load factor (%) |
|
|
26.4% |
|
|
23.3% |
|
|
26.5% |
|
|
24.9% |
|
|
27.6% |
|
|
24.7% |
|
Electricity generated (3) (kWh millions) |
|
|
8,469 |
|
|
5,677 |
|
|
9,002 |
|
|
8,112 |
|
|
10,243 |
|
|
8,794 |
|
Revenue (4) (Rs. million) |
|
|
33,861 |
|
|
24,060 |
|
|
36,009 |
|
|
32,105 |
|
|
40,847 |
|
|
33,671 |
|
Notes:
84
Our results of operations also depend on the utilization of our power generation assets, which largely depends on wind and solar resource availability, grid availability and equipment availability.
Project costs and capital expenditure
The price of wind turbines, solar module panels and other equipment for our projects have a direct impact on our results of operations through finance costs and depreciation expenses. Due to the rapid expansion of wind turbine and solar panel technology, increasing competition and a significant decrease in input costs resulting from increased economies of scale and decreasing raw material costs, the market prices of wind turbines and solar module panels have generally declined in recent years. However, other factors such as higher import duties and other taxes may cause the price of such equipment to increase. We plan to manage equipment costs by having a diversified base of OEM vendors to protect us from over-reliance on any one vendor, and by utilizing our scale of operations to negotiate favourable terms with our OEM vendors. We are also engaged in manufacturing of solar panels that have been are subject to higher import duties to manage costs.
Our capital expenditure requirements comprise the development costs of our projects, including turbine purchase and installation costs, purchase of solar module panels and balance of plant components, labour costs, consultation and professional fees, interest accrued during construction and other project development costs, which include resource assessments, the cost to obtain permits and licences and legal costs. Costs associated with repairs and maintenance of our projects which add to their useful lives are also included in our capital expenditure, while other operation and maintenance expenses are recorded in our statement of profit and loss as other expenses. Projects under construction typically are shown as capital work-in-progress and are capitalised into the carrying amount of property, plant and equipment when the projects are ready for use.
For more details on our capital expenditure requirements, see the section titled “Liquidity and Capital Resources — Capital Expenditure” under Item 5.B.
85
Operation and maintenance expenses
We contract with wind turbine suppliers for the provision of comprehensive O&M services for our utility scale wind energy projects. The O&M services for our utility-scale solar energy projects are generally performed by our in-house O&M team and the services for our distributed solar energy projects are performed by third parties. We are increasing the portion of wind energy projects managed internally to allow more flexibility to directly operate and maintain the turbines, extend the existing agreements with suppliers or enter into new service agreements with other suppliers. Where we have outsourced O&M services, we proactively monitor vendor performance to ensure that projects are performing at expected generation levels.
For the years ended March 31, 2022, 2023 and 2024, our operation and maintenance expenses were Rs. 4,929 million, Rs. 5,528 million and 5,937 million, respectively, which represented 8%, 7% and 7% of our revenue for the respective periods. O&M expenses in typical solar and wind energy projects range from Rs. 0.25 million to Rs. 0.8 million per MW and Rs. 0.7 million to Rs. 1.4 million per MW, respectively, and typically escalate at a rate of approximately 4% per annum across projects. Our large project portfolio in India creates a homogeneous spread of operations allowing us to be more efficient with our O&M coverage. This also enables us to negotiate more favourable terms from a diversified basis of O&M service providers.
Financing Requirements
We operate in a capital-intensive industry. As a result, our ability to access cost-effective financing is crucial to our business. We access diversified pools capital, including equity, project finance and corporate debt, from a broad cross-section of investors, lenders and other capital providers. Our ability to access diversified pools of capital has enabled us to raise finance and refinance our projects regularly and on competitive terms to maximise our capital efficiency. While we expect to fund the construction and development of our projects with a combination of cash flows from operations, debt financings and equity financings, our ability to arrange for such financing remains subject to various factors, including those affecting the macroeconomic environment.
We seek to maintain a careful balance between our exposure to fixed and floating interest rate instruments. The level of our borrowings and our ability to obtain additional borrowings on the existing terms as well as any interest rate fluctuations and other borrowing costs, have had and will continue to have a material effect on our finance costs and consequently, our results of operations and financial condition. Our finance costs and fair value change in derivative instruments for the years ended March 31, 2022, 2023 and 2024 were Rs. 41,712 million, Rs. 50,966 million and Rs. 47,506 million, respectively. Our financing costs typically include interest expense on the loans and other debt we incur for financing our projects and for working capital requirements. As of March 31, 2024, we had Rs. 647,316 million of total borrowings (including CCDs of Rs. 18,536 million), comprising long-term interest-bearing loans and borrowings, short-term interest-bearing loans and borrowings and current maturities of long-term interest-bearing loans and borrowings. Our weighted average interest cost of borrowings (excluding letters of credit and buyer’s credit) for the years ended March 31, 2022, 2023 and 2024 was 9.62%, 9.30% and 9.09%, respectively. Rising interest rates could adversely affect our ability to secure financing on favourable terms and our cost of borrowings could, as a result, increase. We have and we intend to continue to regularly refinance our operational projects to extend repayment tenors, enhance borrowing limits and reduce our overall debt service requirements.
Government Policies and Initiatives
The principal market in which we operate is India. In order to boost wind -based capacity additions, the Central Government of India is in the process of formulating certain policies and initiatives. However, we believe that the impact of each of these steps is expected to have an influence on the market only over the medium-term, and the effect of these policies could impact our financial condition and results of operations. For example, the Government of India introduced the National Repowering and Life Extension Policy for Wind Power Projects, 2023, which was issued by the MNRE on December 7, 2023 to enable the replacement of older turbines with newer, more efficient models even before the end of their design life, if owners choose to. It also allows for the refurbishment of wind turbines to extend their life beyond the design life based on safety and performance assessment according to relevant standards. Turbines eligible for repowering or refurbishment under the policy include those not complying with the quality control order, those that have completed their design life, turbines of rated capacity below 2 MW, and turbines that can be commercially or voluntarily considered after 15 years of installation. There is no mandatory obligation to supply the power to any DISCOM or procurer at fixed rates. Repowering or refurbishment initiatives are expected to be in effect within 24 months from the issuance of the consent letter.
Similarly, the MNRE issued the National Wind -Solar Hybrid Policy in May 2018. The policy provides a framework for promotion of large grid connected wind-solar PV hybrid systems for efficient utilization of transmission infrastructure and land. The policy also focuses at reducing the variability in renewable power generation and achieving better grid stability. Moreover, it aims to encourage new technologies, methods and way outs involving combined operation of wind and solar PV plants. The policy provides for procurement of power from a hybrid project on tariff based transparent bidding process. It stipulates that all fiscal and financial incentives available to wind and solar power projects would also be made available to such projects. Further, the policy allows addition of battery storage in hybrid
86
projects so as to reduce variability of output power and provide higher energy output. See the section titled “Business Overview — Government Regulations” under Item 4.B.
Pursuant to the Hybrid Policy, a scheme was introduced on May 25, 2018 for setting up of 2500 MW of wind-solar hybrid power projects at a tariff discovered through competitive bidding. These Guidelines have been issued under the provisions of Section 63 of the Electricity Act for long term procurement of electricity, determined through the competitive bidding process, by the procurers, the distribution licensees or an intermediary procurer from Inter State Transmission State grid-connected wind-solar hybrid power projects having individual size of 50 MW and above at one site with minimum bid capacity of 50 MW. The Hybrid Projects Guidelines as amended on March 9, 2022 and November 2, 2022 provide that where the distribution licencee, authorises any agency to carry out the tendering/bidding process on its behalf then the agency will be responsible for fulfilling all the obligations imposed on the procurer during the bidding phase, in accordance with these Guidelines.
Subsequently, the Ministry of Power (MoP) issued a guideline for a tariff based competitive bidding (TBCB) process for procurement of power from grid connected wind solar hybrid projects on August 21, 2023. The objective of the guidelines is to promote competitive procurement of electricity from grid connected wind solar hybrid power projects, by distribution licensees, to protect consumer interests. The guideline aims to facilitate renewable capacity addition and fulfilment of renewable purchase obligation requirement of DISCOMs. These guidelines apply to all subsequent wind-solar hybrid power projects of 10 MW and above capacity for intra-state transmission, and 50 MW and above for inter-state transmission, with or without energy storage. However, at least 33 per cent of the total capacity must be from either wind or solar resources.
Principal Components of the Group’s Profit and Loss Statement
Income
Revenue
Our revenue primarily comprises of (i) sale of power (ii) revenue from transmission line projects and (iii) others that includes sale of O&M, consultancy services and income from EPC services.
We generate substantially all of our revenue from the sale of electricity generated from our wind and solar energy projects. Revenue from the sale of power is dependent on the amount of power generated by each of our projects and is recognised on the basis of the number of units of power supplied multiplied by the tariff per kWh in the PPA, feed-in tariff policy or market rates, as applicable.
For a description of each of these services, see the section titled “Business Overview” under Item 4.B.
Other operating income
Our other operating income refers to income from our operations other than those related to generation of power, and it includes (i) income from sale of carbon credits, which are the certificates issued for reduction of greenhouse emissions for the projects registered under Clean Development and Verified Carbon Standard mechanisms and (ii) income from leases to third parties for using our project sites and equipment.
Late payment surcharge from customers
Our late payment surcharge from customers refers to the income received from our customers, primarily DISCOMs as compensation for delay in payment of overdue receivables.
Finance income and fair value change in derivative instruments
Our finance income and fair value change in derivative instruments primarily includes interest income earned from cash deposits made at banks, fair value gain on derivative instruments and unwinding of contract and financial assets. We use these deposits for our working capital requirements.
Other income
Our other income primarily includes income earned from GBIs, compensation for loss of revenue, insurance claim provisions written back and gain from disposal of subsidiaries. GBIs are incentives earned from the Government of India for every unit of power supplied from our wind power projects to state offtakers.
87
Expenses
Our expenses primarily include operation and maintenance expenses (included under other expenses), finance costs and fair value change in derivative instruments and depreciation and amortization. We also incur employee benefits expenses and expenses for raw materials and consumables used. Certain common group expenses, such as employee benefits expenses, are incurred centrally. These expenses are allocated to our project subsidiaries as shared management service costs. Expenses allocated to projects under construction are capitalised and form part of project costs. Expenses reported in the statement of profit or loss are net of amounts capitalised for projects under construction.
Raw materials and consumables
Raw materials and consumables used represents expenses incurred towards construction of transmission projects.
Employee benefits expenses
Our employee benefits expenses include (i) salaries, wages and bonuses, (ii) contribution to provident and other funds, (iii) share-based payments, (iv) gratuity expenses and (v) staff welfare expenses, paid to our employees.
Depreciation and amortization
Depreciation and amortization are recognised using the straight-line method over the estimated useful life of our solar and wind power projects. Leasehold improvements related to our power projects are amortised over the shorter of the lease term or the underlying period of the PPA for that particular power project. Freehold land is not depreciated. Construction in progress is not depreciated until such projects are commissioned.
Other expenses
Our other expenses primarily comprise of O&M expenses, insurance expenses and legal and professional expenses. O&M services for wind energy projects is largely provided by third parties and for solar energy projects, the services are carried out in-house. Our contracts with third -party O&M providers are generally for a period ranging from five to twenty years, of which generally the first two or three years are provided free of charge for wind energy projects. We typically amortise O&M costs over the full contract period. In order to reduce our dependence on third-party O&M service providers and to reduce costs, we are increasingly moving towards providing services for our wind power projects in-house.
Finance costs and fair value change in derivative instruments
Our finance costs and fair value change in derivative instruments primarily comprise interest expense on the loans and other debt we incur for financing our projects and for working capital requirements, option premium amortization and fair value loss on derivative instruments. See the section titled “Liquidity and Capital Resources — Cash Flows Analysis — Indebtedness” under Item 5.B for more details on our financing arrangements.
Finance costs are capitalised during the construction phase of a project and are recorded in the statement of profit or loss once the project commences operations. We also incur unamortised ancillary borrowing costs that are written off during the fiscal year when the relevant loan is refinanced and if the terms of the new loans are substantially different from the refinanced loan.
Income tax expense
Our income tax expense consists of current and deferred income tax as applicable under Indian tax laws. Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. Current tax is computed based on taxable income as per Income tax law applicable in India. Deferred tax is provided using the asset-liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose at the reporting date.
Until the new tax regime was introduced in India in 2019, companies were required to pay a higher normal corporate tax of approximately 31.2% computed on taxable income or MAT of approximately 18.5% on book profits. In many instances we were paying MAT as some of our subsidiaries falling under higher normal tax were opting for tax holidays that are applicable for 10 consecutive years out of a 15-year period. The excess of MAT over normal tax was accounted as MAT credit which could be utilised in case normal tax is more than MAT.
88
Under the new tax regime that was announced in 2019, companies were given the option to pay only a lower normal corporate tax of 22% and applicable surcharge and cess and are no longer required to pay MAT. Some of our subsidiaries have opted for the new tax regime during the year ended March 31, 2020 and thereafter, as a result we had to write off the MAT credit accumulated before the transition in the year in which the new tax regime was adopted.
As at 31 March 2024, 63% of the total Indian group companies have adopted new tax regime.
Results of Operations
The following table sets out selected financial data from our audited consolidated financial statements for the years indicated:
Consolidated Summary Statement of Profit or Loss
|
|
For the year ended March 31, |
|
|||||||||||||
Particulars |
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
||||
|
|
(Rs. in millions) |
|
|
(US$ in millions) |
|
||||||||||
Income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue |
|
|
59,349 |
|
|
|
78,223 |
|
|
|
81,319 |
|
|
|
976 |
|
Other operating income |
|
|
2,694 |
|
|
|
1,105 |
|
|
|
629 |
|
|
|
8 |
|
Late payment surcharge from customers |
|
|
— |
|
|
|
1,134 |
|
|
|
1,451 |
|
|
|
17 |
|
Finance income and fair value change in derivative instruments |
|
|
2,013 |
|
|
|
2,910 |
|
|
|
5,272 |
|
|
63 |
|
|
Other income |
|
|
5,139 |
|
|
|
4,581 |
|
|
|
7,309 |
|
|
|
88 |
|
Change in fair value of warrants |
|
|
— |
|
|
|
1,356 |
|
|
|
551 |
|
|
|
7 |
|
Total income |
|
|
69,195 |
|
|
|
89,309 |
|
|
|
96,531 |
|
|
|
1,158 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Raw materials and consumables used |
|
|
324 |
|
|
|
6,956 |
|
|
|
3,844 |
|
|
|
46 |
|
Employee benefits expense |
|
|
4,501 |
|
|
|
4,413 |
|
|
|
4,467 |
|
|
|
54 |
|
Depreciation and amortization |
|
|
13,764 |
|
|
|
15,901 |
|
|
|
17,583 |
|
|
|
211 |
|
Other expense |
|
|
9,925 |
|
|
|
13,636 |
|
|
|
14,834 |
|
|
|
178 |
|
Finance costs and fair value change in derivative instruments |
|
|
41,712 |
|
|
|
50,966 |
|
|
|
47,506 |
|
|
|
570 |
|
Change in fair value of warrants |
|
|
690 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Listing and related expenses |
|
|
10,512 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total expenses |
|
|
81,428 |
|
|
|
91,872 |
|
|
|
88,234 |
|
|
|
1,059 |
|
Profit / (Loss) before share of (loss) / profit of jointly controlled entities and tax |
|
|
(12,233 |
) |
|
|
(2,563 |
) |
|
|
8,297 |
|
|
|
100 |
|
Share in (loss)/gain of jointly controlled entities |
|
|
— |
|
|
|
93 |
|
|
|
(155 |
) |
|
|
(2 |
) |
Profit / (Loss) before tax |
|
|
(12,233 |
) |
|
|
(2,470 |
) |
|
|
8,142 |
|
|
|
98 |
|
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Current tax |
|
|
1,098 |
|
|
|
966 |
|
|
|
981 |
|
|
|
12 |
|
Deferred tax |
|
|
2,797 |
|
|
|
1,593 |
|
|
|
3,014 |
|
|
|
36 |
|
Profit / (Loss) for the year |
|
|
(16,128 |
) |
|
|
(5,029 |
) |
|
|
4,147 |
|
|
|
50 |
|
Notes:
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Segment information
We have primarily four reportable segments: (i) wind power and (ii) solar power, (iii) hydro power and (iv) transmission line. Our wind power segment reflects the revenue earned from our utility-scale wind energy projects in India and solar power segment reflects the revenue earned from our utility-scale and solar energy projects in India and hydro power segment reflects the revenue earned from our hydro energy projects in India. Further, Transmission line segment include revenue from construction and maintenance of transmission lines. See Note 42 to our audited consolidated financial statements included in this Report for more information on our segments.
The following table presents selected segment financial information for the years presented:
|
|
For the year ended March 31, 2022 |
|
|
For the year ended March 31, 2023 |
|
||||||||||||||||||||||||||||||
Particulars |
|
Wind |
|
|
Solar |
|
|
Hydro |
|
|
Total |
|
|
Wind |
|
|
Solar |
|
|
Hydro |
|
|
Transmission |
|
|
Total |
|
|||||||||
|
|
(in Rs. Millions) |
|
|||||||||||||||||||||||||||||||||
Revenue |
|
|
33,861 |
|
|
|
24,060 |
|
|
|
1,408 |
|
|
|
59,329 |
|
|
|
36,009 |
|
|
|
32,105 |
|
|
|
2,463 |
|
|
|
7,557 |
|
|
|
78,134 |
|
|
|
For the year ended March 31, 2024 |
|
|
For the year ended March 31, 2024 |
|
||||||||||||||||||||||||||||||||||
Particulars |
|
Wind |
|
|
Solar |
|
|
Hydro |
|
|
Transmission |
|
|
Total |
|
|
Wind |
|
|
Solar |
|
|
Hydro |
|
|
Transmission |
|
|
Total |
|
||||||||||
|
|
(in Rs. Millions) |
|
|
(in US$ Millions) |
|
||||||||||||||||||||||||||||||||||
Revenue |
|
|
40,847 |
|
|
|
33,671 |
|
|
|
2,256 |
|
|
|
4,347 |
|
|
|
81,121 |
|
|
|
490 |
|
|
|
404 |
|
|
|
27 |
|
|
|
52 |
|
|
|
973 |
|
Notes:
Year ended March 31, 2024 compared to the year ended March 31, 2023
Total Income
Our total income increased by 8% to Rs. 96,531 million in the year ended March 31, 2024 from Rs. 89,309 million in the year ended March 31, 2023 and our revenue increased from Rs. 78,223 million in the year ended March 31, 2023 to Rs. 81,319 million in the year ended March 31, 2024. The increase in total income was primarily due to higher operational capacity, gain on sale of assets and finance income, partially offset by lower other operating income. Specifically,
Other operating income
Our other operating income decreased to Rs. 629 million in the year ended March 31, 2024 from Rs.1,105 million in the year ended March 31, 2023. The decrease was due to lower income from sale of carbon reduction certificates, in the year ended March 31, 2024.
Finance income and fair value change in derivative instruments
Our finance income and fair value change in derivative instruments increased by 81% to Rs. 5,272 million in the year ended March 31, 2024 from Rs. 2,910 million in the year ended March 31, 2023. The increase was primarily due to an increase in interest income on term deposits and income derived from unwinding of assets
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Other income
Our other income increased to Rs. 7,309 million in the year ended March 31, 2024 from Rs. 4,581 million in the year ended March 31, 2023, primarily due to gain on sale of 400 MW of solar assets amounting to Rs. 3,659 million in the year ended March 31, 2024.
Expenses
Raw materials and consumables
The cost of raw materials consumables used decreased to Rs. 3,844 million in the year ended March 31, 2024 from Rs. 6,956 million in the year ended March 31, 2023, primarily due to the decrease in construction activities of transmission projects and consequential costs in the year ended March 31, 2024.
Employee benefit expenses
Our employee benefit expenses marginally increased to Rs. 4,467 million in the year ended March 31, 2024 from Rs. 4,413 million in the year ended March 31, 2023, on account of the increase in headcount being offset by lower expense related to employee share-based payments.
Depreciation and amortization
Our depreciation and amortization increased by 11% to Rs. 17,583 million in the year ended March 31, 2024 from Rs. 15,901 million in the year ended March 31, 2023, primarily due to an increase in our asset base resulting from an increase in projects commissioned.
Other expenses
Our other expenses increased by 9% to Rs. 14,834 million in the year ended March 31, 2024 from Rs. 13,636 million in the year ended March 31, 2023, primarily driven by an increase in operating activities and non-cash provisions, partially offset by a lower mark-to-market impact for carbon credit inventory.
Finance costs and fair value change in derivative instruments
Our finance costs and fair value change in derivative instruments decreased by 7% to Rs. 47,506 million in the year ended March 31, 2024 from Rs. 50,966 million in the year ended March 31, 2023, primarily due to the lower cost of refinanced debt, including lower unwinding cost of related derivative instruments, and lower non-cash mark-to-market impact, partially offset by an increase in finance costs due to an increase in operational assets from the previous year.
Income tax expense
Our income tax expense (comprising of current tax and deferred tax) increased to Rs. 3,995 million in the year ended March 31, 2024 from Rs. 2,559 million in the year ended March 31, 2023 due to higher profits in current year.
Profit for the year
As a result of the foregoing, we earned a profit of Rs. 4,147 million in the year ended March 31, 2024 compared to a loss of Rs. 5,029 million in the year ended March 31, 2023.
Year ended March 31, 2023 compared to the year ended March 31, 2022
Total Income
Our total income increased by 29% to Rs. 89,309 million in the year ended March 31, 2023 from Rs. 69,195 million in the year ended March 31, 2022 and our revenue increased from Rs. 59,349 million in the year ended March 31, 2022 to Rs. 78,223 million in the year ended March 31, 2023. The increase in total income was primarily due to an increase in operating capacity, construction revenue from transmission projects and late payment surcharges from customers partially offset by lower income from carbon credit sales. Specifically,
91
Other operating income
Our other operating income decreased to Rs. 1,105 million in the year ended March 31, 2023 from Rs. 2,694 million in the year ended March 31, 2022. The decrease was due to lower income from sale of carbon reduction certificates, in the year ended March 31, 2023.
Finance income and fair value change in derivative instruments
Our finance income and fair value change in derivative instruments increased by 45% to Rs. 2,910 million in the year ended March 31, 2023 from Rs. 2,013 million in the year ended March 31, 2022. The increase was primarily due to an increase in interest income on term deposits and income derived from unwinding of financial assets.
Other income
Our other income decreased to Rs. 4,581 million in the year ended March 31, 2023 from Rs. 5,139 million in the year ended March 31, 2022, primarily due to lower compensation for loss of revenue in the year ended March 31, 2023.
Expenses
Raw materials and consumables used
The cost of raw materials and consumables used increased to Rs. 6,956 million in the year ended March 31, 2023 from Rs. 324 million in the year ended March 31, 2022, primarily due to cost of construction recognised for transmission projects in the year ended March 31, 2023.
Employee benefit expenses
Our employee benefit expenses decreased to Rs. 4,413 million in the year ended March 31, 2023 from Rs. 4,501 million in the year ended March 31, 2022, on account of the absence of additional incentives paid to employees in connection with the listing of our securities on Nasdaq and of lower share-based expenses during the year ended March 31, 2023, which were partially offset by an increase in headcount.
Depreciation and amortization
Our depreciation and amortization increased by 16% to Rs. 15,901 million in the year ended March 31, 2023 from Rs. 13,764 million in the year ended March 31, 2022, primarily due to an increase in our asset base resulting from an increase in projects commissioned.
Other expenses
Our other expenses increased by 37% to Rs. 13,636 million in the year ended March 31, 2023 from Rs. 9,925 million in the year ended March 31, 2022, primarily driven by capacity additions, increased travel costs, and a charge of Rs. 1,430 million for liquidated damages and impairment of carbon credits
Finance costs and fair value change in derivative instruments
Our finance costs and fair value change in derivative instruments increased by 22% to Rs. 50,966 million in the year ended March 31, 2023 from Rs. 41,712 million in the year ended March 31, 2022, primarily due to higher borrowing amounts related to increased capacity as well as, non-cash mark to market adjustments of Rs. 6,816 million
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Income tax expense
Our income tax expense (comprising of current tax and deferred tax) decreased to Rs. 2,559 million in the year ended March 31, 2023 from Rs. 3,895 million in the year ended March 31, 2022.
Loss for the year
As a result of the foregoing, we incurred a loss of Rs. 5,029 million in the year ended March 31, 2023 compared to a loss of Rs. 16,128 million in the year ended March 31, 2022. The net loss of the year ended March 31, 2022 included a one-time listing related expense of Rs. 10,512 million in connection with our Business Combination.
Non-IFRS Financial Measures
Adjusted EBITDA
Adjusted EBITDA is a non-IFRS financial measure. We present Adjusted EBITDA as a supplemental measure of our performance. This measurement is not recognised in accordance with IFRS and should not be viewed as an alternative to IFRS measures of performance. The presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
The Company defines Adjusted EBITDA as Profit/(loss) for the period plus (a) current and deferred tax (income tax expenses) (b) finance costs and FV changes on derivative instruments, (c) change in fair value of warrants (if recorded as expense) (d) depreciation and amortization, (e) listing expenses, (f) share based payment and other expense related to listing less, (g) share in profit/(loss) of jointly controlled entities (h) finance income and FV change in derivative instruments, (i) change in fair value of warrants (if recorded as income). We believe Adjusted EBITDA is useful to investors in assessing our ongoing financial performance and provides improved comparability on a like to like basis between periods through the exclusion of certain items that management believes are not indicative of our operational profitability and that may obscure underlying business results and trends. However, this measure should not be considered in isolation or viewed as a substitute for net income or other measures of performance determined in accordance with IFRS. Moreover, Adjusted EBITDA as used herein is not necessarily comparable to other similarly titled measures of other companies due to potential inconsistencies in the methods of calculation.
Our management believes this measure is useful to compare general operating performance from period to period and to make certain related management decisions. Adjusted EBITDA is also used by securities analysts, lenders and others in their evaluation of different companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be highly dependent on our capital structure, debt levels and credit ratings. Therefore, the impact of interest expense on earnings can vary significantly among companies. In addition, the tax positions of companies can vary because of their differing impact of tax provisions from time to time and because of the tax policies of the various jurisdictions in which they operate. As a result, effective tax rates and tax expense can vary considerably among companies.
Adjusted EBITDA has limitations as an analytical tool, and you should not be considered in isolation or as a substitute for analysis of our results as reported under IFRS. Some of these limitations include:
93
A reconciliation is provided below for Adjusted EBITDA to the most directly comparable financial measure prepared in accordance with IFRS. Investors are encouraged to review the related IFRS financial measures and the reconciliation of non-IFRS financial measures to their most directly comparable IFRS financial measures included below and to not rely on any single financial measure to evaluate our business. The following table presents a reconciliation of Adjusted EBITDA to profit / (loss) for the year, its most directly comparable financial measure calculated and presented in accordance with IFRS for the years indicated:
|
|
Year ended March 31, |
|
|||||||||
|
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|
|
(Rs. in millions) |
|
|
(US$ in millions) |
|
||||||
Profit / (Loss) for the year |
|
(16,128 |
) |
|
(5,029 |
) |
|
4,147 |
|
|
50 |
|
Less: Finance income and fair value change in derivative instruments |
|
(2,013 |
) |
|
(2,910 |
) |
|
(5,272 |
) |
|
(63 |
) |
Add / (less): Share in loss/ (profit) of jointly controlled entities |
|
— |
|
|
(93 |
) |
|
155 |
|
|
2 |
|
Add: Depreciation and amortization |
|
13,764 |
|
|
15,901 |
|
|
17,583 |
|
|
211 |
|
Add: Finance costs and fair value change in derivative instruments |
|
41,712 |
|
|
50,966 |
|
|
47,506 |
|
|
570 |
|
Add/ (less): Change in fair value of warrants |
|
690 |
|
|
(1,356 |
) |
|
(551 |
) |
|
(7 |
) |
Add: Listing and related expenses |
|
10,512 |
|
|
— |
|
|
— |
|
|
— |
|
Add: Income tax expense |
|
3,895 |
|
|
2,559 |
|
|
3,995 |
|
|
48 |
|
Add: Share based payment expense |
|
2,712 |
|
|
1,966 |
|
|
1,653 |
|
|
20 |
|
Adjusted EBITDA |
|
55,144 |
|
|
62,004 |
|
|
69,216 |
|
|
831 |
|
Notes:
Cash Flow to Equity (CFe)
CFe is a non-IFRS financial measure. We present CFe as a supplemental measure of our performance. This measurement is not recognised in accordance with IFRS and should not be viewed as an alternative to IFRS measures of performance. The presentation of CFe should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
We define CFe as Adjusted EBITDA add non- cash expense and finance income and fair value change in derivative instruments, less interest expense paid, tax paid/(refund) and normalised loan repayments. Normalised loan repayments are repayment of scheduled payments as per the loan agreement. Ad hoc payments and refinancing (including planned arrangements/ borrowings in previous periods) are not included in normalised loan repayments. The definition also excludes changes in net working capital and investing activities.
We believe IFRS metrics, such as net income (loss) and cash from operating activities, do not provide the same level of visibility into the performance and prospects of our operating business as a result of the long -term capital-intensive nature of our businesses, non-cash depreciation and amortization, cash used for debt servicing as well as investments and costs related to the growth of our business.
Our business owns high-value, long-lived assets capable of generating substantial Cash Flows to Equity over time. We believe that external consumers of our financial statements, including investors and research analysts, use CFe both to assess our performance and as an indicator of its success in generating an attractive risk-adjusted total return, assess the value of the business and the platform. This has been a widely used metric by analysts to value our business, and hence we believe this will better help potential investors in analysing the cash generation from our operating assets.
We have disclosed CFe for our operational assets on a consolidated basis, which is not our cash from operations on a consolidated basis. We believe CFe supplements IFRS results to provide a more complete understanding of the financial and operating performance of our businesses than would not otherwise be achieved using IFRS results alone. CFe should be used as a supplemental measure and not in lieu of our financial results reported under IFRS.
94
A reconciliation is provided below for CFe to the most directly comparable financial measure prepared in accordance with IFRS. Investors are encouraged to review the related IFRS financial measures and the reconciliation of non-IFRS financial measures to their most directly comparable IFRS financial measures included below and to not rely on any single financial measure to evaluate our business. The following table present a reconciliation of CFe to Adjusted EBITDA for the year, its most directly comparable financial measure calculated and presented in accordance with IFRS for the years indicated:
Particulars |
|
For the year ended March 31, |
|
|||||||||
|
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|
|
(Rs. in millions) |
|
|
(US$ in millions) |
|
||||||
Adjusted EBITDA |
|
55,144 |
|
|
62,004 |
|
|
69,216 |
|
|
831 |
|
Less: Share based payments expense (cash settled) and others |
|
(940 |
) |
|
— |
|
|
— |
|
|
— |
|
Add: Finance income and fair value change in derivative instruments |
|
2,013 |
|
|
2,910 |
|
|
5,272 |
|
|
63 |
|
Less: - Interest paid in cash |
|
(34,553 |
) |
|
(38,306 |
) |
|
(42,337 |
) |
|
(508 |
) |
Less: - Tax paid / (refund) |
|
(3,087 |
) |
|
(2,084 |
) |
|
(3,294 |
) |
|
(40 |
) |
Less: Normalised loan repayment |
|
(5,717 |
) |
|
(9,865 |
) |
|
(17,451 |
) |
|
(209 |
) |
Add: - Other non-cash items |
|
27 |
|
|
578 |
|
|
2,259 |
|
|
27 |
|
Total CFe |
|
12,888 |
|
|
15,237 |
|
|
13,665 |
|
|
164 |
|
Notes:
B. Liquidity and Capital Resources
Overview
Our primary sources of liquidity have historically been equity investment by our shareholders, cash generated from operations, capital markets funding and a range of borrowing from banks and other financial institutions. Our ordinary course liquidity requirements relate to investments in existing and new projects and related capital expenditure, acquisitions, operation and maintenance of our assets, servicing of our debt, funding our working capital needs, and general corporate purposes.
We expect that cash generated from operations, funds raised in the capital markets and continued borrowings from banks and other financial institutions will continue to be our primary sources of liquidity. We evaluate our funding requirements periodically in light of our net cash flow from operating activities, the progress of our various projects, acquisition opportunities and market conditions. Changes in our operating plans, lower than anticipated electricity sales, increased expenses or other events may cause us to seek additional debt or financing in future periods. There can be no guarantee that financing will be available on acceptable terms or at all. Debt financing, if available, could impose additional cash payment obligations, additional covenants and operating restrictions. Future financings could result in the dilution of our existing shareholding. In addition, any of the items discussed in detail under “Risk Factors” elsewhere in this Report may also significantly impact our liquidity.
We believe that the expected cash to be generated from our business operations, our credit facilities and our project finance lines, will be sufficient to finance our working capital requirements for the next 12 months.
In order to fund expenses at the ReNew Global level, we may upstream cash from ReNew India subject to ReNew India complying with applicable regulatory and contractual (including borrowing-related) restrictions.
95
Cash Flows Analysis
Our summarised statement of consolidated cash flows is set forth below:
Particulars |
|
For the year ended March 31, |
|
|||||||||
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|
|
|
(Rs. in millions) |
|
|
(US$ in millions) |
|
||||||
Net cash generated from operating activities |
|
42,390 |
|
|
65,572 |
|
|
68,931 |
|
|
827 |
|
Net cash used in investing activities |
|
(124,747 |
) |
|
(74,978 |
) |
|
(162,535) |
|
|
(1,950 |
) |
Net cash generated from financing activities |
|
90,038 |
|
|
19,113 |
|
|
82,417 |
|
|
989 |
|
Net increase / (decrease) in cash and cash equivalents |
|
7,681 |
|
|
9,707 |
|
|
(11,187 |
) |
|
(134 |
) |
Cash and cash equivalents at the beginning of the year |
|
20,679 |
|
|
28,379 |
|
|
38,182 |
|
|
458 |
|
Effects of exchange rate changes on cash and cash equivalents |
|
19 |
|
|
96 |
|
|
26 |
|
|
0 |
|
Cash and cash equivalents at the end of the year |
|
28,379 |
|
|
38,182 |
|
|
27,021 |
|
|
324 |
|
Notes:
Net cash generated from operating activities
Our net cash generated from operating activities was Rs. 68,931 million in the year ended March 31, 2024. Our operating profit before working capital changes was Rs. 67,065 million in the year ended March 31, 2024. The changes in our working capital primarily consisted of (i) decrease in trade receivables and contract assets of Rs. 3,867 million, (ii) an increase in inventories of Rs. 755 million, (iii) an increase in other assets of Rs. 1,445 million, and (iv) an increase in trade payables and other liabilities of Rs. 3,493 million.
Our net cash generated from operating activities was Rs. 65,572 million in the year ended March 31, 2023. Our operating profit before working capital changes was Rs. 61,884 million in the year ended March 31, 2023. The changes in our working capital primarily consisted of (i) decrease in trade receivables and contract assets of Rs. 6,899 million, (ii) an increase in inventories of Rs. 1,040 million, (iii) an increase in other assets of Rs. 1,491 million, and (iv) an increase in trade payables and other liabilities of Rs. 1,404 million.
Our net cash generated from operating activities was Rs. 42,390 million in the year ended March 31, 2022. Our operating profit before working capital changes was Rs. 50,797 million in the year ended March 31, 2022. The changes in our working capital primarily consisted of (i) an increase in trade receivables and contract assets of Rs. 9,732 million, (ii) an increase in inventories of Rs. 59 million, (iii) a decrease in other assets of Rs. 990 million, and (iv) an increase in trade payables and other liabilities of Rs. 3,481 million.
Net cash used in investing activities
Our net cash used in investing activities was Rs. 162,535 million in the year ended March 31, 2024. This was primarily due to purchases of property, plant and equipment, intangible assets and right of use assets of Rs. 153,839 million in connection with our increased operational capacity and net investment in deposits having residual maturity more than three months of Rs. 16,998 million, offset by proceeds from disposal of subsidiaries (net of cash disposed) of Rs. 5,741 million and interest received of Rs. 3,606 million.
Our net cash used in investing activities was Rs. 74,978 million in the year ended March 31, 2023. This was primarily due to purchases of property, plant and equipment, intangible assets and right of use assets of Rs. 86,364 million in connection with our increased operational capacity and investment in jointly controlled entities of Rs. 2,915 million, offset by redemption of deposits having residual maturity more than three months of Rs. 12,758 million and interest received of Rs. 2,092 million.
Our net cash used in investing activities was Rs. 124,747 million in the year ended March 31, 2022. This was primarily due to purchases of property, plant and equipment, intangible assets and right of use assets of Rs. 89,830 million in connection with our increased operational capacity, investment in deposits having residual maturity more than 3 months (net) of Rs. 24,770 million, acquisition of subsidiaries, net of cash acquired of Rs. 15,929 million and loans given of Rs. 950 million partially offset by disposal of subsidiary of Rs. 4,765 million and interest received of Rs. 1,759 million.
96
Net cash generated from financing activities
Our net cash generated from financing activities was Rs. 82,417 million in the year ended March 31, 2024. This was primarily due to proceeds from interest- bearing loans and borrowings of Rs. 413,976 million, proceeds from shares and optionally convertible debentures issued by subsidiaries of Rs. 7,608 million offset by repayment of interest -bearing loans and borrowings of Rs. 280,350 million, payment for put options exercised during the period by our Founder of Rs. 1,000 million, interest paid of Rs. 52,190 million, payment of lease liabilities (including payment of interest expense) of Rs. 588 million and shares bought back, held as treasury shares of Rs. 4,819 million
Our net cash generated from financing activities was Rs. 19,113 million in the year ended March 31, 2023. This was primarily due to proceeds from interest- bearing loans and borrowings of Rs. 246,572 million, proceeds from shares and compulsory convertible debentures issued by subsidiaries of Rs. 17,758 million offset by repayment of interest -bearing loans and borrowings of Rs. 187,661 million, payment for put options exercised during the period by our Founder of Rs. 980 million, interest paid of Rs. 42,743 million, payment of lease liabilities (including payment of interest expense) of Rs. 534 million and shares bought back, held as treasury shares of Rs. 13,276 million.
Our net cash generated from financing activities was Rs. 90,038 million in the year ended March 31, 2022. This was primarily due to cash infused on account of the capital transaction involving issue of shares amounting to Rs. 67,978 million set off by cash paid amounting to Rs. 19,609 million to RPL shareholders. Other transactions included, repayment of interest-bearing loans and borrowings of Rs. 213,241 million, interest paid of Rs. 34,553 million, payment for acquisition of subsidiary’s interest from non-controlling interest of Rs. 737 million, payment made for repurchase of vested share options of Rs. 610 million, payment of lease liabilities (including payment of interest expense) of Rs. 295 million and shares pending cancellation of Rs. 1,315 million, offset by proceeds from interest-bearing loans and borrowings of Rs. 290,949 million and acquisition of interest by non-controlling interest in subsidiaries of Rs. 1,450 million.
Indebtedness
Our borrowings at the project level are typically secured by a lien on the assets of the project to which they relate and a pledge of shares of the related project subsidiary. Our loan agreements generally contain covenants, including limitations on the use of proceeds and restrictions on indebtedness, liens, asset sales, investments, transfer or ownership interests and certain changes in business. These covenants may limit our subsidiaries’ ability to pay dividends or make loans or advances to us, subject to the lender’s waiver or consent.
The table below summarises certain terms of our long-term interest-bearing loans and borrowings financing arrangements as of March 31, 2024:
Particulars |
|
Amount outstanding |
|
Nominal interest rate |
|
Maturity |
||
|
|
(Rs. in millions) |
|
|
|
|
||
Non-convertible debentures (1) |
|
|
59,217 |
|
6.03% - 11.50% |
|
November 2024 to January 2054 |
|
Compulsorily convertible debentures (2) |
|
|
18,536 |
|
8.00% - 13.00% |
|
March 2027 to June 2061 |
|
Term loans from banks (3) |
|
|
145,470 |
|
7.96% - 9.80% |
|
October 2024 to March 2051 |
|
Term loans from financial institutions (4) |
|
|
203,284 |
|
7.50% - 11.25% |
|
April 2024 to January 2044 |
|
Senior secured notes (5) |
|
|
136,996 |
|
4.50% - 7.95% |
|
July 2026 to July 2028 |
|
Optionally convertible debentures (6) |
|
|
2,358 |
|
8.00% |
|
May 2053 to July 2053 |
|
Notes:
97
Capital Expenditure
Our principal capital requirements primarily include capital expenditures, towards expansion of capacities in existing businesses including bidding for and acquiring new wind and solar power projects and other ancillary business activities. We finance our capital expenditure requirements through external borrowings and internal cash flows.
We spent Rs. 89,830 million, Rs. 86,364 million and Rs. 153,839 million to purchase of property, plant and equipment, intangible assets and right of use assets, as per the cash flow statement of the respective periods, in the years ended March 31, 2022, 2023 and 2024, respectively. Our capital expenditures include expenditures on property, plant and equipment, capital work- in-progress and intangible assets. Our property, plant and equipment primarily include freehold land, building temporary structure, plant and equipment, office equipment, computers and furniture and fixtures. Projects under construction as of the balance sheet date are shown as capital work-in-progress. Our intangible assets primarily include computer software and customer contracts
Due to the rapid expansion of wind turbine and solar panel technology, increasing competition and a significant decrease in input costs resulting from increased economies of scale and decreasing raw material costs, the market prices of wind turbines and solar module panels have generally declined in recent years. To promote domestic growth and cut dependence on foreign supplies, the Government of India has imposed safeguard duties and also recently announced in March 2021, a basic customs duty of 40% on solar modules and 25% on solar cells imported from April 1, 2022. For our committed and commissioned projects, these costs are usually passed through to our customers under “change in law” provisions under our PPAs. We also plan to continue to manage equipment costs by having a diversified base of OEM vendors to protect us from over-reliance on any one vendor, and by utilizing our scale of operations to negotiate favourable terms with our OEM vendors. We are also engaged in manufacturing of solar panels that have been subject to higher import duties to manage costs. We are currently developing manufacturing capabilities with nameplate capacities of 2 GW solar cell and 6.4 GW solar module manufacturing facilities in the states of Rajasthan and Gujarat. During fiscal year 2024, we have commissioned 4 GW solar module manufacturing facility the remaining manufacturing plants are expected to be commissioned in phases over the next fiscal year.
Contractual Obligations and Contingent Liabilities
In addition to payment obligations under borrowings, we also have continuing obligations to make certain payments. As of March 31, 2024, capital commitment (net of advances) pertaining to commissioning of wind and solar energy projects aggregated to Rs. 56,857 million. We have made, and expect to continue making, substantial capital expenditures in connection with the construction and development of our projects.
98
As of March 31, 2024, we had the following contractual obligations:
|
|
(amounts in Rs. million) |
||||||||||||||||||||||
At March 31, 2024 |
|
On demand |
|
|
Less than |
|
|
3 to 12 |
|
|
1 to 5 years |
|
|
> 5 years |
|
|
Total |
|
||||||
Borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Non-convertible debentures (secured)* |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
61,883 |
|
|
|
7,463 |
|
|
|
69,346 |
|
Compulsorily convertible debentures* |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,064 |
|
|
|
38,287 |
|
|
|
46,351 |
|
Optionally convertible debentures* |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
785 |
|
|
|
7,209 |
|
|
|
7,994 |
|
Term loan from banks* |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
154,033 |
|
|
|
35,001 |
|
|
|
189,034 |
|
Loans from financial institutions* |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
160,069 |
|
|
|
147,384 |
|
|
|
307,453 |
|
Senior secured notes* |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
157,976 |
|
|
|
— |
|
|
|
157,976 |
|
Short term interest-bearing loans and borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Acceptances (secured) |
|
|
— |
|
|
|
17,822 |
|
|
|
9,858 |
|
|
|
— |
|
|
|
— |
|
|
|
27,680 |
|
Term loan from banks and financial institutions (secured) |
|
|
|
|
|
|
1,600 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,600 |
|
Working capital term loan (secured) |
|
|
— |
|
|
|
6,799 |
|
|
|
4,450 |
|
|
|
— |
|
|
|
— |
|
|
|
11,249 |
|
Buyer’s / supplier’s credit |
|
— |
|
|
|
9,603 |
|
|
1,520 |
|
|
— |
|
|
— |
|
|
11,123 |
|
|||||
Other financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Lease liabilities |
|
|
— |
|
|
|
196 |
|
|
|
701 |
|
|
|
2,991 |
|
|
|
24,576 |
|
|
|
28,464 |
|
Current maturities of long term interest-bearing loans and borrowings* |
|
|
680 |
|
|
|
17,264 |
|
|
|
63,464 |
|
|
|
— |
|
|
|
— |
|
|
|
81,408 |
|
Interest accrued |
|
|
— |
|
|
|
1,160 |
|
|
|
1,797 |
|
|
|
— |
|
|
|
— |
|
|
|
2,957 |
|
Capital creditors |
|
|
— |
|
|
|
40,092 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
40,092 |
|
Purchase consideration payable |
|
|
— |
|
|
|
44 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
44 |
|
Trade Payables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Trade Payables |
|
|
— |
|
|
|
9,094 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9,094 |
|
* Including future interest payments.
We are subject to legal proceedings and claims which arise in the ordinary course of business. See section titled “Consolidated Statements and Other Financial Information — Legal Proceedings” under Item 8.A. Although occasional adverse decisions or settlements may occur, the potential loss, if any, cannot be reasonably estimated. However, we believe that the final disposition of current matters will not have a material adverse effect on our financial position, results of operations or cash flow. We maintain various liability insurance coverage to protect our assets from losses arising out of or involving activities associated with ongoing and normal business operations. We believe that we have adequately provided for contingencies which are likely to become payable. None of these contingencies are material to our financial condition, results of operations or cash flows.
See Note 47(i) to our audited consolidated financial statements included in this Report for disclosure on contingent liabilities.
Off-Balance Sheet Arrangements
We are not a party to any off-balance sheet arrangements.
Quantitative and Qualitative Disclosures about Financial Risks
See section titled “Quantitative and Qualitative Disclosures about Market Risk” under Item 11.
99
C. Research and Development, Patents and licences, etc.
Our intellectual property is an essential element of our business, and our success depends in part on our ability to protect our technology and intellectual property. In the course of our business, we use various financial, business, scientific, technical, economic and engineering information, formulas, designs, methods, techniques, processes and procedures, all of which is protected confidential and proprietary information. We rely on a combination of patent, trade secret, trademark and other intellectual property laws, confidentiality agreements and licence agreements to establish and protect our intellectual property rights. We also share some of our technology and know-how with our vendors in connection with the supply of equipment for the development of our projects, and therefore ensure that we obtain adequate safeguards against any potential intellectual property infringement by our vendors. For a more detailed discussion of our research and development policies, see “Technology and R&D” under Item 4.B.
D. Trend Information
Other than as disclosed elsewhere in this Report, we are not aware of any trends, uncertainties, demands, commitments or events since March 31, 2024 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions. For additional information, see “Operating Results” under Item 5.A.
E. Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations are based on our audited consolidated financial statements, which have been prepared in accordance with IFRS as issued by the IASB. In the course of preparing these financial statements, we have made judgments, estimates and assumptions, that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these audited consolidated financial statements and the reported amounts of revenues and expenses for the years presented. Actual results may differ from these estimates under different assumptions and conditions. For a discussion of our material accounting policies, see Note 4.1 to our audited consolidated financial statements included in this Report. 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 and future periods affected. See Note 2.5 to our audited consolidated financial statements included in this Report for information on Significant accounting judgments, estimates and assumptions.
We believe the critical accounting estimates are those that are both important to reflect our financial condition and results and require difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
See Note 4.2 to our audited consolidated financial statements included in this Report for information on recent accounting pronouncements.
100
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
The following discussion sets forth information regarding our Company’s directors and senior management as of the date of this Report.
Mr. Ram Charan and Ms. Michelle Robyn Grew decided not to stand for re-appointment and the tenure of Mr. Philip Kassin, MKC Investments Nominee and Independent Director expired on August 22, 2023 due to the expiration of the director nomination rights of MKC Investments. As a result, the each of these three Independent Directors ceased to be a director of the Board effective August 22, 2023.
On July 7, 2023 the Board, on the recommendation of the Nomination and Board Governance Committee and subject to the approval of Company’s shareholders at the annual general meeting ("AGM") of the Company, unanimously approved the re-appointment of Mr. Manoj Singh, Sir Sumantra Chakrabarti and Ms. Vanitha Narayanan as Non-Executive Independent Directors for a period of approximately another two years with effect from August 23, 2023 up to the conclusion of AGM scheduled to be held in calendar year 2025. On June 4, 2024, the Board of Directors of the Company have extended the term of the Lead Independent Director (Mr. Manoj Singh) from August 23, 2024, up to the conclusion of AGM of year 2025.
On July 17, 2023 the Board, on the recommendation of the Nomination and Board Governance Committee, and subject to the approval of Company’s shareholders at the next AGM of the Company, unanimously approved the appointment of Ms. Paula Gold-Williams, Ms. Nicoletta Giadrossi and Mr. Philip Graham New, as Non-Executive Independent Directors in place of the outgoing Independent Directors, for a term of approximately two years with effect from August 23, 2023, up to the conclusion of AGM of the Company scheduled to be held in the calendar year 2025.
Pursuant to amended Shareholder’s Agreement dated 17th July, 2023, the Board of Directors appointed Mr. William Bowen Shepheard Rogers, as second Nominee Director of CPP investments on 20th September, 2023.
All the above reappointment / appointments were approved by the Company’s shareholders at the AGM held on 12th September, 2023.
On September 6, 2023, the Board of Directors (the “Board”) of the Company accepted the resignation of Mr. Kedar Upadhye as the Chief Financial Officer of the Company. Mr. Upadhye’s resignation was effective from October 30, 2023. Following Mr. Upadhye’s resignation, Mr. Kailash Vaswani was appointed as Chief Financial Officer of ReNew with effect from October 31, 2023.
Our Company’s Board is authorised to appoint officers as it deems appropriate. Provided below is a brief description of our Company’s directors’ and officers’ business experience.
The following sets forth certain information concerning our directors and executive officers as of March 31, 2024:
Name |
Age |
Position / Title |
Directors: |
|
|
Mr. Sumant Sinha |
59 |
Director and Chief Executive Officer |
Mr. Manoj Singh |
71 |
Lead Independent Director |
Sir Sumantra Chakrabarti |
65 |
Independent Director |
Ms. Vanitha Narayanan |
64 |
Independent Director |
Ms. Paula Gold-Williams |
61 |
Independent Director |
Mr. Philip Graham New |
61 |
Independent Director |
Ms. Nicoletta Giadrossi |
57 |
Independent Director |
Ms. Kavita Saha |
52 |
Investor Nominee Director |
Mr. Yuzhi Wang |
38 |
Investor Nominee Director |
Mr. William Bowen Shephard Rogers |
49 |
Investor Nominee Director |
Executive Officers: |
|
|
Mr. Kailash Vaswani |
45 |
Chief Financial Officer |
Mr. Balram Mehta |
53 |
Group President |
Mr. Sanjay Varghese |
54 |
President, Projects |
Mr. Mayank Bansal (1) |
46 |
Group President, India RE Business |
(1) Mr. Bansal separated from the Company effective as of April 30, 2024.
Unless otherwise indicated, the business address of each director and executive officer is ReNew India, Commercial Block-1, Zone 6, Golf Course Road, DLF City Phase V, Gurugram 122009, Haryana, India.
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Directors
Mr. Sumant Sinha is the Founder, Chairman and CEO of ReNew, a leading decarbonisation solutions company listed on Nasdaq. Prior to founding ReNew in 2011, Mr. Sinha has held various senior roles including as President, Finance at Aditya Birla Group and Founder CEO of Aditya Birla Retail. He also served as Chief Operating Officer of Suzlon Energy Ltd. from 2008 to 2010. Mr. Sinha has also held various roles in investment banking at global financial institutions including Citicorp Securities and ING Barings Services Limited. Mr. Sinha is the chair of the board of the Rocky Mountain Institute (RMI), an independent non-profit organization that transforms global energy systems through market-driven solutions. He has been recently named as co-chair of World Economic Forum’s CEO Climate Leaders Alliance, the largest CEO-led alliance on climate change globally. He is also a member of the board of the US-India Strategic Partnership Forum (USISPF) and a founding member of the First Movers Coalition, a global initiative to decarbonise ‘hard to abate’ industrial sectors. During 2022–23, he served as the president of the Associated Chamber of Commerce and Industry of India (ASSOCHAM), the oldest apex chamber in India. Mr. Sinha is a regular speaker at various international fora such as the World Economic Forum, UNFCCC COP, Climate Week NY, CERA Week, and leading global universities. He has written more than 200 opinion pieces on climate change, renewable energy, and sustainable economic growth. Mr. Sinha holds a bachelor’s degree in engineering from the Indian Institute of Technology, Delhi, India, a post graduate diploma in business management from the Indian Institute of Management, Calcutta, India, and a master’s degree from the School of International and Public Affairs at Columbia University (SIPA), United States. He is also a CFA Charterholder. Mr. Sinha currently serves on the board of IIT-Delhi and has previously served on the boards of IIM-Calcutta and Columbia SIPA. He was conferred the inaugural distinguished alumnus award by Columbia SIPA and has also been conferred the distinguished alumnus award by IIT-Delhi and IIM Calcutta. Mr. Sinha is the recipient of several other awards and recognitions, including the 2022 USISPF Global Leadership Award; ‘ET Energy’s Chief Executive of the Year 2022’; the ‘Economic Times Entrepreneur of the Year Award’, 2018; and ‘EY Entrepreneur of the Year’, 2017. He is the first Indian business leader to be recognised as an SDG pioneer by the United Nations. In 2024, Mr. Sinha was featured in the book ‘100 Great IITians’—a compilation of essays on distinguished IIT alumni who have contributed to India’s economic growth. He is the author of “Fossil Free: Reimagining Clean Energy in a Carbon-Constrained World” (a revised version of the book, with a new chapter on green hydrogen, was released in August 2023).
Mr. Manoj Singh served as the Chief Operating Officer at Deloitte Touche Tohmatsu Ltd (Deloitte Global) in a professional career spanning 36 years with the firm. Prior to his retirement in June 2015, Mr. Singh was based in Cleveland, Hong Kong and New York with Deloitte where he held various leadership positions. A consultant by background, Mr. Singh led Deloitte Consulting in the Americas, was the Asia Pacific Regional Managing Director and the COO in the final eight years with the firm. He also served on the Board of Directors of Deloitte firms in the US, China and Mexico. Mr. Singh has advised national and multinational companies on mergers and acquisitions, enterprise cost management and shareholder value growth with a specific focus on technology, manufacturing and the energy industry. He also has extensive business development experience in emerging and developed markets such as Germany, China, India, sub–Saharan Africa, and South East Asia. He is a member of several company boards including Pratham USA, the Putnam Funds and Abt Associates. Mr. Singh is also a Trustee at Carnegie Mellon University in the United States.
Sir Sumantra Chakrabarti is a Chair of the Board of Trustees of ODI (global affairs think tank) and Co-Chair of the Emerging Market Forum. He is also a member of the International Advisory Council of the Oxford India Centre for Sustainable Development and also advise Emerging Market leaders on economic development and public administration reform. Sir Sumantra worked from 2016 to 2022 as a Global Commissioner of the New Climate Economy network and from 2020 to 2021 as a member of the WHO Pan-European Commission on Health and Sustainable Development, and of the Commission for Smart Government in the U.K.. Until July 2020, he was the sixth President of the European Bank for Reconstruction and Development. He served two full four-year terms, having won competitive elections in 2012 and in 2016. Before becoming President of the European Bank for Reconstruction and Development, Sir Sumantra was a civil servant in the United Kingdom and was the Permanent Secretary successively at the Department for International Development and the Ministry of Justice. He has a degree in Politics, Philosophy and Economics from the University of Oxford, United Kingdom and a master’s degree in Development Economics from the University of Sussex, United Kingdom. He is an honorary Fellow of New College, Oxford University, an honorary bencher at the Middle Temple, and also holds honorary doctorates from the Universities of Sussex, East Anglia, and the Bucharest University of Economic Sciences, as well as honours from Kosovo, Kazakhstan and Uzbekistan and received the Emerging Europe’s "The Professor Günter Verheugen" Award, 2021.
Ms. Vanitha Narayanan is a senior global executive and board leader with a track record spanning three decades in technology and telecommunications. In 2020, Ms. Narayanan retired after a career at IBM where she held multiple key roles leading large businesses in the United States, Asia-Pacific and India. These roles included serving as Managing Director & Chairman of IBM India, Vice President for the Communications Sector across Asia Pacific, and other global roles. Ms. Narayanan serves on the boards of several global companies including HCL Technologies Ltd. and SLB Ltd. Ms. Narayanan was the first woman chairperson of AMCHAM India in 2016 and served as a member on its National Executive Board from 2014 to 2018. She was on the executive council of the National Association of Software and Services Companies (NASSCOM) from 2016 to 2018 and on the Catalyst India Advisory Board. She also served as Chairperson of the Board of Governors for National Institute of Technology, Surathkal, India and was a member of the National Council of the Confederation of Indian Industry and Co-Chair of its national committee for multinational companies. Ms. Narayanan was awarded an honorary Degree of Doctor of Letters from the LNM Institute of Information Technology, India. She is a graduate in Public Relations & Communication
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from Stella Maris College, India and holds an MBA degree in Marketing and Advertising from the University of Madras, India. She also holds an MBA degree in MIS & Accounting from the University of Houston, United States.
Ms. Paula Gold-Williams is the former President and CEO of CPS Energy, a fully integrated electric and natural gas municipal utility based in San Antonio, Texas. Ms. Gold Williams served in positions of increasing responsibility at CPS Energy before becoming CEO in 2015. She held multiple other positions during her 17-year career at CPS Energy, including Group EVP – Financial & Administrative Services, CFO and Treasurer. Ms. Gold Williams is a corporate director who serves on the board of Emera, Inc., a utility holding company headquartered in Nova Scotia, Canada, with operations across North America. Ms. Gold Williams also serves as the Co-Chair of the Keystone Policy Center, and has been a member of both the Policy Center and its Energy Board since 2016. She serves as an Energy Pillar Co-Chair of Dentons Global Smart Cities Communities Initiatives and Think Tank; as a member of the US Secretary of Energy's Advisory Board (SEAB); and as a member of Alliance to Save Energy’s Global Leadership Council. Previously, she held other board positions, including First Vice Chair of the Electric Power Resource Institute (EPRI); a member and designated Chair Pro Tem of the Federal Reserve Bank of Dallas’ San Antonio Branch; and a past Chair of the San Antonio Chamber of Commerce. She was also a board member and Treasurer of EPI center, an innovation think tank; incubator and accelerator; and strategic advisory organization. Ms. Gold Williams has an Associate Degree in Fine Arts from San Antonio College. She has a BBA in accounting from St. Mary’s University. She earned a Finance and Accounting MBA from Regis University in Denver, Colorado. She is a Certified Public Accountant and a Chartered Global Management Accountant.
Mr. Philip Graham New has served as a non -executive director of Norsk Hydro ASA since June 2022 and as a member of the audit committee since June 2023. He was an independent director of Fotowatio Renewable Ventures, S.L. from 2017 to 2019, became a Board advisor post its relocation to Spain and in June 2023 was appointed as a non-executive director of Fotowatio Renewable Ventures, S.L. In November 2023, he was appointed as Chair of Trustmark Research and Innovation Ltd, a UK registered not for profit company limited by guarantee. He also served as a non- executive director of Almar Water Solutions B.V. from March 2017 to December 2023. From November 2015 until May 2022, Mr. New served as CEO of Energy Systems Catapult Limited, an independent, not-for-profit company set up to accelerate the transformation of the U.K.’s energy system and ensure U.K. businesses and consumers capture the opportunities for clean growth on the way to net zero emissions. Before joining Energy Systems Catapult Limited, Mr. New worked for BP p.l.c. for over 30 years. He established and built BP p.l.c.’s bioenergy businesses and as chief executive officer of BP Alternative Energy was also responsible for BP’s wind, solar and technology venturing activities. Prior to his role as chief executive officer of BP Alternative Energy, Mr. New held a range of senior international general and commercial management roles in BP p.l.c.’s customer -facing businesses. Mr. New is a member of the World Economic Forum’s Network of Global Future Councils, a Fellow of the Energy Institute, and sits on various energy transition related advisory panels and committees, including the U.K. Automotive Council and the U.K. Research and Innovation’s Faraday Battery Challenge. Mr. New chaired for four years the U.K. Electric Vehicle Energy Taskforce and was recently commissioned by the U.K. Department for Transport to conduct an independent review of the potential for a U.K. sustainable aviation fuel sector. Mr. New holds a Master of Arts in Philosophy, Politics and Economics from Oxford University.
Ms. Nicoletta Giadrossi is currently serving as Chair of MSX International Ltd, a UK based global business services provider; Sustainability & HSE Committee Chair in TKE GmBh, a German-based elevator company; Chair of the Remuneration Committee for Royal Vopak N.V., a petrochemicals and new energies storage company listed on Euronext Amsterdam; Chair of the ESG Committee for Innio GmBh, an Austrian OEM for gas engines; INED in Fortna Inc., a robotics and automation OEM based in Atlanta, GA; and INED in Univar Solutions Inc. a chemicals distribution company based in Chicago, IL.Ms. Giadrossi also worked as Chair of Ferrovie dello Stato Italiane Spa, the holding company for mobility infrastructure, until June 2024; Chair of Cairn Energy plc; a FTSE 250 gas producer in Scotland until January 2023; Chair of Techouse AS, a cleantech engineering company in Norway until July 2023; Chair of the Remuneration Committee of Brembo S.p.A., an automotive components manufacturer listed on the Italian MIB until April 2023. She also served on the boards of Falck Renewables S.p.A., now Renantis, a leading European renewable energy producer until 2022; IHS Markit Ltd, listed on the NYSE, until 2022; Fincantieri SpA, listed on the Italian MIB, until April 2018; Bureau Veritas S.A. and Faiveley Transport S.A., both listed in France, until April 2017; and Aker Solutions Asa, listed in Norway, until 2013. Ms. Giadrossi has experience in leading and participating in audit, risk, sustainability, and remuneration committees. Ms. Giadrossi's executive career has spanned 30 years in energy, engineering, and capital goods. From 2014 to 2016 she was President in, Europe, Africa, India, for Technip, an engineering company, and from 2012 to 2014 she was EVP, Head of Operations, for Aker Solutions. Prior to that, she was VP and General Manager, EMEA, for Dresser Rand (now Siemens Energy). Ms. Giadrossi spent 10 years with General Electric Company in several executive positions, notably General Manager for GE’s Oil and Gas, Refinery & Petrochemicals Division, a position held until 2005. She started her career at The Boston Consulting Group. She also holds a BA in Economics and Mathematics from Yale University and an MBA from Harvard Business School.
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Ms. Kavita Saha has a work experience in the Indian financial sector of over 29 years. She is the Head of Infrastructure & Sustainable Energies Group, India, for CPP Investments. This CPP Investments team focuses on evaluation and management of investments in core infrastructure and energy sectors such as transportation, renewable energy generation and utilities. Prior to joining CPP Investments in 2018, Ms. Saha was MD at JP Morgan India Pvt. Ltd. and part of the India team advising JP Morgan Asian Infrastructure and Related Resources Opportunity Fund (AIRRO) with total assets under management of over US$1 billion. Ms. Saha was responsible for originating and managing Indian investments in sectors such as roads, renewable and conventional power and healthcare infrastructure. She worked previously with Barclays Capital, and with leading Indian financial institutions IL&FS and IDBI, where she was responsible for evaluation, financial structuring and arranging debt and equity finance for projects. Ms. Saha holds an MBA and BSc Physics (Hons) from the University of Delhi, India and is a CFA.
Mr. Yuzhi Wang is a Portfolio Manager in the Infrastructure Department at Abu Dhabi Investment Authority (“ADIA”), where he is responsible for sourcing, executing and managing investments across the transport, utilities, energy, and digital infrastructure sectors with a primary focus on Asia. He has over 10 years of infrastructure investing experience across Asia, Europe, and the Americas. Prior to joining ADIA in 2015, he worked at CPP Investments and State Street Corporation in Canada. He has a BSc in Human Biology from the University of Toronto, Canada and an MBA from Queen’s University, Canada.
Mr. William Bowen Shephard Rogers (“Bill Rogers”) has served as the Global Head of Sustainable Energies Group of CPP Investments since August 2023. He has also served as a director of Renewable Power Capital since December 2020 and of Reventus Power Limited since April 2021. Mr. Rogers has over 20 years of private equity investment experience, with the majority focused on the energy transition. Most recently he was part of the Leadership Team that built the Green Investment Group, Macquarie’s global renewables principal investment business. Mr. Rogers started his career at Shell and McKinsey. Mr. Rogers holds a BA and an MA in Engineering from Cambridge University.
Executive Officers
Kailash Vaswani is one of the founding team members of the Company and has been appointed as Group CFO with effect from October 31, 2023. Before being appointed as Group CFO, he was designated as President Corporate Finance and also served as interim CFO. He has more than two decades of diverse and global business experience. He has been instrumental in raising over US$15 billion of debt and equity for the company since its inception. In addition, Mr. Vaswani has been responsible for M&A deals with several marquee investors and has also led treasury, capital allocation, IR and cash management. He has significantly contributed to the company’s growth by being involved in strategic decisions and organization building as well as the growth of the asset portfolio through organic and inorganic additions. Mr. Vaswani’s leadership experience includes core financial reporting, business partnership, business model realignment and cost optimization, corporate finance, and global investor relations, apart from implementing several high-impact, cross-functional transformational projects. Mr. Vaswani is a chartered accountant and previously worked in financial markets. He started his career as a Research Analyst at CRISIL (owned by S&P and India’s leading rating provider) before moving to Morgan Stanley in a fixed income research role covering the US and European bond markets. Mr. Vaswani also worked at Aditya Birla Group and Saffron Asset Advisors in various corporate finance and investment roles and helped them with investment decisions in excess of US$6.5 billion in India and the United States.
Mr. Balram Mehta is the Group President – ReNew Services & Wind EPC Business. He joined ReNew India in 2011. He has been instrumental in establishing ReNew India’s wind energy business. As Group President, Mr. Mehta oversees the asset management function at ReNew India, and is responsible for managing pan-India site Administration and Security. He handles Wind EPC function, Wind Resource, Wind Project Development, and utility receivables functions in ReNew. Mr. Mehta has over 32 years of experience across sectors including the renewable energy industry. Prior to joining ReNew India, Mr. Mehta worked with CLP Wind Farms (India) Private Limited as vice president for renewables operations including construction and O&M. He also worked previously for Enercon India Limited, a wind energy OEM, and DCM Engineering. He has been a prominent member of technical and industry bodies supporting the development of wind energy. Mr. Mehta holds a bachelor’s degree in technology from the Himachal Pradesh University, with the first rank, and an MBA in operations management from the Indira Gandhi National Open University, New Delhi, India. He also did Advance Management Program (AMP203) from Harvard Business School in October 22.
Mr. Sanjay Varghese is ReNew India’s Group President. Mr. Varghese has been with ReNew India since October 2017 and his responsibilities include overseeing development and execution of ReNew India’s solar power projects, and solar manufacturing business. Mr. Varghese has over 13 years of experience in the solar energy sector. Prior to joining ReNew India, Mr. Varghese worked with Lanco Group for over nine years where he held various leadership positions, including as their Chief Operating Officer. Prior to joining Lanco Group, Mr. Varghese worked in the field of investment banking. Mr. Varghese holds a bachelor’s degree in technology in the field of Metallurgy from the Indian Institute of Technology, Kanpur, India and a post graduate diploma in management from the Indian Institute of Management, Ahmedabad India.
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Family Relationships
There are no family relationships between any of the Company’s executive officers and directors or director nominees. Our Chief Sustainability, CSR and Communications Officer, Ms. Vaishali Nigam Sinha, is married to our Founder, Chairman and CEO, Mr. Sumant Sinha.
The primary objective of our executive compensation program is to attract, motivate, reward and retain the talent needed to achieve our business objectives and also enable these individuals to have greater involvement with, and share in, our future growth. Compensation arrangements for our executive officers have been designed to align a portion of their compensation with the achievement of business objectives and growth strategy. Bonus payments for certain of our executive officers are determined with respect to a given fiscal year based on quantitative and qualitative goals set for the Company as a whole, as well as on the basis of individual performance. Bonus payments are determined on certain parameters determined by the Board which are subject to change.
In accordance with the terms of the ReNew Global Shareholders Agreement and letters of appointment of respective directors, all Investor Nominee Directors appointed by Platinum Cactus and CPP Investments are not eligible to receive any retainer fee or any other benefit from the Company. The non-executive independent directors of the Company were paid in accordance with the following terms and conditions of their appointment as approved by the Board for the year ended March 31, 2024 (there is no increase in the remuneration of non-executive independent directors for Fiscal 2024-25):
Grant Frequency |
Annual award of RSUs settled in Class A Ordinary Shares |
|||||
Grant Computation |
In respect of the Fiscal 2023-24*, the following RSUs were granted to the following Non-Executive Independent Directors under the Non-Employee 2021 Incentive Award Plan: |
|||||
|
|
|
|
|
|
|
Restricted Stock Units |
|
S. No |
Director |
US$ |
No. of RSU |
|
|
|
1 |
Mr. Manoj Singh |
152,356 |
24,313 |
|
|
|
2 |
Sir Sumantra Chakrabarti |
152,356 |
24,313 |
|
|
|
3 |
Ms. Vanitha Narayanan |
152,356 |
24,313 |
|
|
|
4 |
Ms. Paula Gold-Williams*** |
89,956 |
15,325 |
|
|
|
5 |
Ms. Nicoletta Giadrossi*** |
89,956 |
15,325 |
|
|
|
6 |
Mr. Philip Graham New*** |
89,956 |
15,325 |
|
|
|
7 |
Mr. Ram Charan** |
62,400 |
8,988 |
|
|
|
8 |
Ms. Michelle Robyn Grew** |
62,400 |
8,988 |
|
|
|
9 |
Mr. Philip Kassin** |
70,566 |
10,165 |
|
|
* The Company’s RSU grant and vesting cycle runs annually. Except as noted below, each Independent Director in office on the relevant date received a grant of 22,471 RSUs (with a value of US$ 156,000) on November 21, 2022 with contractual effect from August 25, 2022 |
|||||
105
|
and a grant of 27,905 RSUs (with a value of US$ 163,800) on September 13, 2023. The figures above are the prorated number and value of RSUs granted to each Independent Director that relate to service in the Fiscal 2022-23 and Fiscal 2023-24. |
|
** Mr. Charan, Ms. Grew and Mr. Kassin ceased from the Board effective August 22, 2023. RSUs granted during Fiscal 2022-23 to Mr. Charan and Ms. Grew were vested on August 24, 2023 and RSUs granted during Fiscal 2022-23 to Mr. Kassin were vested on October 3, 2023. |
|
*** Ms. Williams, Ms. Giadrossi and Mr. New appointed to the Board with effect from August 23, 2023 and on September 13, 2023, granted 27,905 RSUs (with a value of US$ 163,800) with annual vesting. |
Vesting |
100% after 1 year from the date of the grant. |
Particulars** |
|
Mr. Manoj Singh |
|
Sir Sumantra Chakrabarti |
|
Ms. Vanitha Narayanan |
|
Ms. Paula Gold-Williams |
|
Ms. Nicoletta Giadrossi |
|
Mr. Philip Graham New |
|
Mr. Ram Charan* |
|
Ms. Michelle Robyn Grew* |
|
Mr. Philip Kassin* |
Fees paid (actual) (in US$) |
|
195,478 |
|
148,090 |
|
145,768 |
|
80,531 |
|
78,871 |
|
78,041 |
|
46,930 |
|
56,101 |
|
46,931 |
RSUs granted to Directors (subject to vesting period) (in US$) |
|
152,356 |
|
152,356 |
|
152,356 |
|
89,956 |
|
89,956 |
|
89,956 |
|
62,400 |
|
62,400 |
|
70,566 |
* Mr. Ram Charan and Ms. Michelle Robyn Grew, Independent Directors of the Company retired on August 22, 2023 due to expiry of their term. The tenure of Mr. Philip Kassin, MKC Investments LLC Nominee and Independent Director also expired on August 22, 2023, due to expiration of the director nomination rights of MKC Investments LLC.
** The figures above are the prorated number and value of RSUs granted to each Independent Director that relate to service in the Fiscal 2022-23 and Fiscal 2023-24.
Each RSU represents the right to receive 1 Class A Ordinary Share on payment of face value thereof @US$ 0.0001 per share. There are no performance measures as the RSUs represent part of the directors’ fixed remuneration. The Company’s RSU grant and vesting cycle runs annually. Except as explained in other notes, each Independent Director in office on the relevant date received a grant of 22,471 RSUs (with a value of US$ 156,000) on November 21, 2022 with contractual effect from August 25, 2022 and a grant of 27,905 RSUs (with a value of US$ 163,800) on September 13, 2023.
Compensation of the Executive Director and Senior Management
For the year ended March 31, 2024, the aggregate compensation paid to the executive director and our executive officers for service in all capacities, but excluding grants of share options, was US$ 9,899,421. This amount includes approximately US$ 477,279 set aside or accrued to provide pension, severance, retirement and similar benefits to our executive director and executive officers.
In accordance with his service agreement, Mr. Sumant Sinha was paid an amount equivalent to US$ 6,684,395 as aggregate remuneration, which includes US$ 1,232,036 as fixed payments (including other benefits amounting US$ 130,217), US$ 1,303,356 as variable bonus and a discretionary special bonus of US$ 4,018,786 to Mr. Sinha in June 2023.
As of March 31, 2024, options to purchase an aggregate of 30,279,548 Class A Ordinary Shares granted to our executive director and executive officers were outstanding (vested) under our equity incentive plans with a weighted average exercise price of US$ 8.37 per share, and such options expire 10 years after the date of grant.
Sumant Sinha Employment Agreement
The employment of Mr. Sumant Sinha, Chairman and Chief Executive Officer (“CEO”) of the Company is governed by a service agreement which became effective on August 23, 2021 and was subsequently amended on July 11, 2022 (the “CEO Service Agreement”). Pursuant to the employment agreement, Mr. Sinha serves as the Chairman and Chief Executive Officer of the ReNew group.
For the year ended March 31, 2024, the Board approved an increase in the fixed component of the salary of Mr. Sinha from Rs. 70,000,000 per annum to Rs. 103,300,000 per annum and of his target bonus from Rs. 70,000,000 per annum to Rs. 103,300,000 per annum. The performance measures applicable to Mr. Sinha’s annual target bonus for the year ending March 31, 2024 were same as applied to Mr. Sinha’s annual target bonus for the year ended March 31, 2023. The Board also approved the payment of a discretionary special bonus of Rs. 335,000,000 to Mr. Sinha each payable in June 2023 (in respect of Fiscal 2023-24) and April 2024 (in respect of Fiscal 2024-25) and
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the same has been paid accordingly by ReNew India. The Board also approved the grant of an LTIP award with a fair value of approximately US$ 2.0 million and the grant of additional employee share options to purchase 8,000,000 Class A Ordinary Shares, both under the Employee 2021 Plan. The additional share options were awarded subject to the terms of the Employee 2021 Plan. The grant of the LTIP award and of the additional employee share options to purchase 8,000,000 Class A Ordinary Shares were approved by shareholders at 2023 annual general meeting of the Company. In addition, Mr. Sinha remains entitled to certain share option grants (see ‘Sumant Sinha Option Grants’ below) and customary benefits.
The allocation of the annual target bonus, between financial and non-financial parameters continues to be 90:10. However, in the assessment of financial performance, equal weighting is given to the Group’s achievement of its revenue and EBITDA budgets. No financial bonus is payable if the achieved revenue and EBITDA are less than 80% (averaged) of the budgeted amounts. If they are higher, the amount of the financial bonus will be calculated on a linear scale, as a proportion of the weighted share of the target bonus applicable to each parameter equal to the achieved value for the parameter divided by the budgeted value. The budgeted revenue and EBITDA are determined by the Board annually, as are the non-financial parameters. Mr. Sinha is also employed by ReNew India, the Company’s subsidiary, pursuant to a service agreement under which he receives 20% of his total remuneration (excluding discretionary special bonus) from ReNew India; the above total remuneration payable by the Company is reduced by the amount of remuneration paid by ReNew India. In addition, as approved by the Board, the CEO is entitled to re-imbursement / benefit of the salary of his drivers, fuel, car insurance, and maintenance and upkeep costs for a car.
The following table illustrates the calculation of the part of Mr. Sinha’s bonus awarded by reference to financial parameters in respect of each financial year:
Financial parameter multiplier |
Bonus payable |
Average of %ages of Budgeted EBITDA and Budgeted Revenue achieved is less than 80% |
No Bonus payable |
Average is more than 80% |
Pro-rata Financial Bonus payable based on financial parameter is linear based on the following formula: Target Bonus Payable = [(Achieved EBITDA/ Budgeted EBITDA)/2 + (Achieved Revenue/ Budgeted Revenue)/2] * 90% of Target Bonus |
Mr. Sinha’s LTIP award in respect of Fiscal 2023-24 was in the form of RSU and PBU, the key terms of which are as follows:
Exercise Price |
$0.0001 (Face Value of Awards) |
|
Target LTI Quantum (% of compensation) |
Class A Ordinary Shares with a fair value of approximately US$ 2.0 million. |
|
LTI Mix-split of target LTI into Restricted Stock Units (RS) and Performance Shares (PS) |
102,215 Restricted Stock Units (RSU) – 30% and 238,500 Performance Based Units (PBU) - 70% |
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Vesting Schedule |
RSU: On the 1st anniversary of the Grant Date - 33%; On the 2nd anniversary of the Grant Date – 33%; On the 3rd anniversary of the Grant Date – 34% PBU: On the 3rd anniversary of the Grant Date – 100% subject to achievement of Performance Metrics |
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Performance metrics** for vesting of PSU |
o Revenue : 20% Weight o Profit After Tax (PAT) : 35% Weight o Operating Cash Flow (OCF) : 35% Weight o ESG Rating : 10% Weight Relative Total Shareholder Return (R-TSR) will be used as an additional modifier. |
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Financial Performance (for each of Revenue, PAT and OCF) |
Financial Performance (i) Financial Performance will be assessed on a consolidated basis against targets approved by the Board annually in respect of the period of three fiscal years beginning with the fiscal year in which the Grant Date falls. While performance will be assessed against annual performance in each of these three fiscal years (equally weighted), PBUs will vest only at the end of 3 years from the Grant Date. (ii) Performance evaluation would be done basis unaudited annual results of Renew generally published around June of the following financial year. (iii) Performance evaluation will be done as per the table below. There would be straight -line interpolation between performance levels and vesting will be computed on each metric separately. |
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Performance Evaluation (% of Target) |
Accrual / Vesting of PBUs |
|
|
|
Below Threshold or <85% of Target |
0% |
|
|
|
At Threshold (85% of Target) |
75% |
|
|
|
At Target (100% of Target) |
100% |
|
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At Maximum (115% of Target) |
125% |
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ESG Performance o ESG performance will be evaluated via Sustainalytics’ ESG Risk Rating scale (or equivalent metric as determined by the Remuneration Committee in its absence) on an annual basis over three financial years from the year of Grant Date. The last three annual ratings available on the date of Vesting will be considered for performance evaluation. o Vesting will occur by reference to ReNew’s ESG Risk Category at the end of each of the last three years as follows: Negligible – 125%; Low – 100%, Medium – 75%; High or Severe – 0%. Relative-Total Shareholder Return Performance (R-TSR) The numbers of Performance Based Units that will vest on the basis of Financial Performance and ESG Performance calculated as set out above will, however, be modified as follows. o R-TSR Performance will be evaluated on the basis of ReNew’s TSR performance in comparison to other companies’ TSR performance in the S&P Global Clean Energy Index (or such other Index as may be approved by the Remuneration Committee from time to time) over the same period of 3 fiscal years (1st day of the first fiscal and the last day of the last fiscal) as financial performance evaluation] (no annual assessment) o The R-TSR Vesting Modifier ranges from -25% of Target (Bottom Quartile performance) to +25% (Top Quartile performance). o The R-TSR Vesting Modifier percentage will be added to / reduced from (as the case may be) the vesting percentage computed on the basis of Financial Performance and ESG Performance at the end of the third year from the Grant Date. o The overall number of Performance Based Units vesting following such modification in respect of each metric (excluding those for which no shares vest) therefore will range from 50% at threshold performance to 150% at maximum performance (i.e., 75%-25% to 125%+25%). There would be straight-line interpolation between Bottom and Top Quartiles.
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Mr. Sinha was awarded additional employee share options to purchase 8,000,000 Class A Ordinary Shares in respect of Fiscal 2023-24 subject to the terms of ReNew’s Employee 2021 Incentive Award Plan. Key terms of the options are as follows:
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Group EBITDA budgeted for the last financial year |
% Options vested |
Delivered at 100% |
1.0X |
Delivered between 90% & 100% |
0.5X to 1.0X linear |
Delivered below 90% |
0.0X |
With the introduction of LTIPs, grant of new Stock options have been phased out for CEO and other eligible employees except for new leadership hires or critical retention cases only. In the current Fiscal 2023-24, LTIP award has been granted to CEO in form of Restricted Stock Units (RSU) and Performance Based Units (PBU) in ration of 30:70, with 30% as RSU and 70% as PBU (the split of RSUs and PBUs for the direct reports of the CEO is 50:50). The 30% RSU will be vesting on each of the first three anniversaries of the grant date subject only to continued employment. The 70% PBU will be vested as ‘Cliff Vesting on the third anniversary of the grant date’, subject only to continued employment and the achievement of performance matrix. The long-term incentive awards were initially granted on August 23, 2021 to the CEO in the form of Stock options and were commercially agreed between the parties as part of SPAC listing and these terms were disclosed as part for disclosures made at the time of listing. For the major part of the aforesaid grants which were awarded in 2021, the vesting period is spread over 4 years (vesting of 6.25% of total options at the end of each quarter). For the grants awarded / to be awarded in 2022, 2023, 2024 and 2025 (part of the aforesaid grants), 80% is time based and 20% is performance based. Further the performance-based grants for 2022 and 2023 had lapsed as relevant EBITDA target (agreed at the time of grant) for these years was not attained. Similarly, the new stock option grants awarded in 2023 is 80% time based and 20% performance based.
For the year ending March 31, 2025, the Board, on the recommendation of the Remuneration Committee, unanimously approved the following remuneration of the CEO, Mr. Sinha:
The performance measures applicable to Mr. Sinha’s annual target bonus for Fiscal 2024-25 will be the same as applied to Mr. Sinha’s annual target bonus for Fiscal 2023-24, which the Committee considered continue to be appropriate to incentivise Mr. Sinha and align his interests with those of shareholders and the successful execution of the Company’s strategy.
The terms of RSU and PBUs granted for Fiscal 2024-25 remain same as for RSUs and PBUs granted for Fiscal 2023-24.
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Summary of the grants made to Mr. Sinha up to March 31, 2024 are as follows:
Date of Grant |
Type of Vesting |
Number of Options |
Strike Price (US$) |
Vested Options (as of 31 March 24) |
Vesting terms |
23 Aug 21 |
Time Based |
6,216,750 |
4.53 |
6,216,750 |
All vested |
23 Aug 21 |
Time Based (initial option grant) |
23,045,965 |
10.00 |
15,844,101 |
6.25% of total options vest at the end of each quarter (Vesting to complete by 30 June 2025) |
23 Aug 22 |
Time Based (subsequent option grant) |
3,687,354 |
10.00 |
3,226,435 |
12.5% of total options vest at the end of each quarter (Vesting to complete by 30 June 2024) |
23 Aug 23 |
Time Based (subsequent option grant) |
3,687,354 |
10.00 |
1,382,758 |
12.5% of total options vest at the end of each quarter (Vesting to complete by 30 June 2025) |
13 Sep 2023 |
Time Based |
6,400,000 |
5.87 |
NIL |
Refer terms provided in “CEO Service Agreement terms” |
13 Sep 2023 |
Performance Based |
1,600,000 |
5.87 |
NIL |
Refer terms provided in “CEO Service Agreement terms” |
13 Sep 2023 |
RSU |
102,215 |
0.0001 |
NIL |
Refer terms provided in “CEO Service Agreement terms” |
13 Sep 2023 |
PBU |
238,500 |
0.0001 |
NIL |
Refer terms provided in “CEO Service Agreement terms” |
Performance based options aggregating to 1,843,677, having an exercise price of US$ 10, have not been granted as the EBITDA target have not met yet.
Determination of CEO’s Annual Bonus for the period ended March 31, 2024
For the period ended March 31, 2024, 90% of Mr. Sinha’s maximum target bonus of INR 103,300,000 was payable by reference to the Company’s performance against financial criteria. The Company achieved 105.75% of the relevant financial targets ((Achieved EBITDA/ Budgeted EBITDA)/2 + (Achieved Revenue/ Budgeted Revenue)/2)) in Fiscal 2023-24. Accordingly, Mr. Sinha was entitled to a bonus payment of INR 98,315,775 (105.75% of 90% of INR 103,300,000) in respect of these financial criteria. The Board considers that the Budgeted EBITDA and Budgeted Revenue are commercially sensitive to the Company and accordingly this information is not disclosed. The Board expects that this information will remain commercially sensitive and so does not expect it to be reported to shareholders in future. In respect of each of the non-financial parameters set by the Board for the award of the remaining 10% of Mr. Sinha’s target bonus for the financial year ended March 31, 2024 (strategic orientation, operational effectiveness, and governance stewardship) the Remuneration Committee considered that Mr. Sinha’s performance merited the allocation of the bonus pertaining to the non-financial parameters, reflecting his contributions and commitment to the Company’s strategic goals and accordingly the Committee exercised its discretion to recommend a bonus payment to Mr. Sinha in respect of these non-financial criteria of INR 10,330,000 (100% of 10% of INR 103,300,000). The Board approved both elements of Mr. Sinha’s bonus and accordingly he has been paid a total of INR 108,645,775 in respect of his contractual bonus entitlement for the year ended March 31, 2024.
Pursuant to the CEO Service Agreement, Mr. Sinha’s employment will continue indefinitely until terminated by him or the Company on six months’ notice (but the Company may pay him the amounts to which he would be entitled for that period in lieu of notice). If the Company terminates Mr. Sinha’s employment without “cause” or he resigns for “good reason” (each as defined in the CEO Service Agreement) otherwise than within 12 months following a change in control of the Company, subject to Mr. Sinha’s execution of a release of claims in favour of the Company he will be entitled to receive (i) 12 months’ base salary, (ii) a prorated portion of his annual bonus for the year of termination, (iii) a payment in lieu of 12 months’ medical coverage paid by the Company for 12 months and (iv) accelerated
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granting and vesting of options in accordance with the Employee 2021 Incentive Award Plan (“2021 Plan”) and Mr. Sinha’s option grants. If such qualifying termination occurs within 12 months following a change in control of the Company, subject to Mr. Sinha’s execution of a release of claims in favour of the Company, he will be entitled to receive (i) 18 months’ base salary and target bonus, (ii) a prorated portion of his annual bonus for the year of termination, (iii) a payment in lieu of 18 months’ medical coverage paid by the Company and (iv) accelerated granting and vesting of options in accordance with the 2021 Plan and Mr. Sinha’s option grants. The employment agreement also subjects Mr. Sinha to restrictive covenants, including non-competition, non-solicitation of customers and employees, non-dealing and non-hire, in each case, lasting for 12 months following the termination of his employment.
Determination of CEO’s Discretionary Special Bonus
In respect of Fiscal 2023-24 and Fiscal 2024-25, the discretionary special bonuses paid to Mr. Sinha are subject to him achieving the minimum parameters to earn any of the financial bonus part of his annual target bonus (as defined in the CEO Service Agreement) for the relevant financial year. If these minimum parameters are not achieved, Mr. Sinha will be required to repay the entire post tax amount of the relevant discretionary special bonus to the Company within 90 days of the end of the relevant financial year. The minimum parameters to earn the discretionary special bonus for the Fiscal 2023-24 have been achieved.
Employment Agreement of Executive Officers other than Sumant Sinha
The employment agreements of the Company’s executive officers other than Mr. Sinha are governed by Indian law. The agreements may be terminated by either party with prior written notice of 90 days. We also reserve the right to terminate the employment with immediate effect without any compensation or notice, on account of any act which may constitute ‘misconduct’ under our policies or applicable laws. Executive officers are entitled to a monthly compensation and share options. For more details on their compensation, see section titled “Compensation of the Executive Director and Senior Management” above and “Equity Compensation” below.
Equity Compensation
Employee 2021 Incentive Award Plan
On August 23, 2021, we adopted and our shareholders approved the Employee 2021 Incentive Award Plan, or the “Employee 2021 Plan” under which the Company may grant cash and equity-based incentive awards to eligible employees, including our executive director, in order to attract, retain and motivate the persons who make important contributions to the Company. The material terms of the Employee 2021 Plan are summarised below:
Eligibility and administration
Our and our subsidiaries’ employees are eligible to receive awards under the Employee 2021 Plan. The Employee 2021 Plan is administered by the Board, which may delegate its duties and responsibilities to one or more committees of its directors and/or officers (referred to collectively as the plan administrator below), subject to the limitations imposed under the Employee 2021 Plan, Section 16 of the Exchange Act, stock exchange rules and other applicable laws. The plan administrator will have the authority to take all actions and make all determinations under the Employee 2021 Plan, to interpret the Employee 2021 Plan and award agreements and to adopt, amend and repeal rules for the administration of the Employee 2021 Plan as it deems advisable. The plan administrator also has the authority to grant awards, determine which eligible employees receive awards and set the terms and conditions of all awards under the Employee 2021 Plan, including any vesting and vesting acceleration provisions, subject to the conditions and limitations in the Employee 2021 Plan.
Shares available for awards
The shareholders have approved at the AGM 2023 for increasing the number of shares available for issuance by 22,969,839 Class A Ordinary Shares, in addition to the existing number available for issuance, thereby taking overall limits to 88,000,000 Class A Ordinary Shares, which includes 1,300,000 Class A Ordinary Shares for Non-Employee 2021 Plan. An aggregate of 26,468,450 Class A Ordinary Shares is available for issuance under the Employee 2021 Plan and an aggregate of 900,268 Class A Ordinary Shares is available for issuance under the Non-Employee 2021 Plan.
As of March 31, 2023, options for 366,064 Class A Ordinary Shares had been exercised pursuant to the Employee 2021 Plan and 232,302 RSU had been exercised pursuant to the Non-Employee 2021 Plan.
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If an award under the Employee 2021 Plan expires, terminates, is settled for cash, is cancelled without having been fully exercised or is forfeited, any unused shares subject to the award will, as applicable, become or again be available for new grants under the Employee 2021 Plan. Awards granted under the Employee 2021 Plan in substitution for any options or other share or share- based awards granted by an entity before the entity’s merger or consolidation with the Company or acquisition of the entity’s property or share will not reduce the shares available for grant under the Employee 2021 Plan, but may count against the maximum number of shares that may be issued upon the exercise of the ISOs.
Awards
The Employee 2021 Plan provides for the grant of share options, including incentive share options, or “ISOs,” and nonqualified share options, or “NSOs,” share appreciation rights, or “SARs,” restricted share, RSUs, and other share or cash-based awards. All awards under the Employee 2021 Plan will be set forth in award agreements, which will detail the terms and conditions of awards, including any applicable vesting and payment terms and post-termination exercise limitations. A brief description of each award type follows.
Performance criteria
The plan administrator may select performance criteria for an award to establish performance goals for a performance period.
Certain transactions
In connection with certain corporate transactions and events affecting our shares, including a change in control, or change in any applicable laws or accounting principles, the plan administrator has broad discretion to take-action under the Employee 2021 Plan in relation to employees other than the CEO to prevent the dilution or enlargement of intended benefits, facilitate the transaction or event or give effect to the change in applicable laws or accounting principles. This includes cancelling awards for cash or property, accelerating the vesting of awards, providing for the assumption or substitution of awards by a successor entity, adjusting the number and type of shares subject to outstanding awards and/or with respect to which awards may be granted under the Employee 2021 Plan and replacing or terminating awards under the Employee 2021 Plan. In the case of the CEO, the consequences of change in control would be as set out in his employment agreement. In addition, in the event of certain non-reciprocal transactions with our shareholders, the plan administrator will make equitable adjustments to awards outstanding under the Employee 2021 Plan as it deems appropriate to reflect the transaction.
If, upon a change in control, any options held by officers of the Company are not assumed by the successor entity, such options will accelerate and vest immediately upon the closing of the transaction constituting a change in control.
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Plan amendment and termination
The Board may amend or terminate the Employee 2021 Plan at any time; however, no amendment, other than an amendment that increases the number of shares available under the Employee 2021 Plan, may materially and adversely affect an award outstanding under the Employee 2021 Plan without the consent of the affected participant and shareholder approval will be obtained for any amendment to the extent necessary to comply with applicable laws. Further, the plan administrator may not and shall not have the right to, without the approval of our shareholders, amend any outstanding share option or SAR to reduce its price per share. The Employee 2021 Plan will remain in effect until the tenth anniversary of its effective date, unless earlier terminated by the Board. No awards may be granted under the Employee 2021 Plan after its termination.
Clawback provisions, transferability and participant payments
All awards will be subject to any company claw-back policy as may be set forth in such claw-back policy or the applicable award agreement. Except as the plan administrator may determine or provide in an award agreement, awards under the Employee 2021 Plan are generally non-transferrable, except by will or the laws of descent and distribution, or, subject to the plan administrator’s consent, pursuant to a domestic relations order, and are generally exercisable only by the participant. With regard to tax withholding obligations arising in connection with awards under the Employee 2021 Plan and exercise price obligations arising in connection with the exercise of share options under the Employee 2021 Plan, the plan administrator may, in its discretion, accept cash, wire transfer or check, ordinary shares that meet specified conditions, a promissory note, a “market sell order,” such other consideration as the plan administrator deems suitable or any combination of the foregoing.
Sumant Sinha Option Grants
On August 23, 2021, immediately following the Closing of the Business Combination, Mr. Sinha was granted options to purchase 29,262,715 Class A Ordinary Shares of the Company. 6,216,750 of these options have an exercise price of $ 4.53 per Class A Ordinary Share and are fully vested. The remaining 23,045,965 of these options have an exercise price of $10 per Class A Ordinary Share and 6.25% of them vest at the end of each quarter (with the first vesting on September 30, 2021) until they are fully vested, subject to Mr. Sinha’s continuous employment through each such vesting date. Vesting will be accelerated in the event of the termination of Mr. Sinha’s employment other than by the Company for cause or by Mr. Sinha without good reason (as such terms are defined in his service agreement) or in the event of a change in control (as defined in the Employee 2021 Plan) to which Mr. Sinha objects in writing, or in the case of cessation of employment for death or incapacitation. All the said Options granted to Mr. Sumant Sinha will expire on August 23, 2031 unless exercised earlier. 15,844,101 of these options had vested by March 31, 2024.
Pursuant to the CEO Service Agreement Mr. Sinha is entitled to be granted: (a) ‘time -based options’ to purchase 3,687,354 Class A Ordinary Shares, respectively, in the Company on August 23, 2022 and on August 23, 2023, and then, subject to his continued employment through each grant date, on August 23 in each of 2024 and 2025; and (b) ‘performance-based options’ to purchase 921,839 Class A Ordinary Shares in the Company within 60 days following the end of the Company’s financial years ending on March 31 in 2022, 2023, 2024 and 2025, subject to Mr. Sinha’s continuous employment through each grant date and the Group’s achieving its consolidated target EBITDA for those years in its pre- Closing investor presentation as filed with the SEC (2022: US$ 810 million; 2023: US$ 1,135 million; 2024: US$ 1,425 million; 2025: US$ 1,685 million). If the EBITDA target so fixed for any financial year is not met, then the grants will accumulate and Mr. Sinha will be entitled to receive a full catch-up of all previous ungranted performance-based options in the first year when the consolidated EBITDA target for the year is met. If none of the targets are met for the 5 financial years after the Grant Date, then future grants of the performance-based options will be subject to meeting the consolidated EBITDA targets set by the Board. Each of the time- based options and the performance-based options will vest as to 12.5% on the last day of each of the first eight calendar quarters after their respective grant date. All the aforesaid options are at an exercise price of US$ 10 per share.
During the Fiscal 2023-24, (a) a grant of an LTIP award, consisting of 102,215 Restricted Stock Units (RSU) and 238,500 Performance Based Units (PBU) (with a fair value of approximately US$ 2.0 million) under the Company’s Employee 2021 Incentive Award Plan in respect of Fiscal 2023-24 and (b) a grant of additional employee share options to purchase 8,000,000 Class A Ordinary Shares under the Company’s Employee 2021 Incentive Award Plan.
A summary of grants made and vested up to March 31, 2024 is mentioned above in “Sumant Sinha Employment Agreement”.
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Management Option Grants
During the financial year ended March 31, 2024, the executive officers (other than CEO) were granted an option to purchase 560,000 Class A Ordinary Shares of the Company which we refer to as the “Management Options”. The Management Options have a weighted average exercise price per Class A Ordinary Share equal to $ 5.84 and vest as per the following terms.
Group EBITDA budgeted for the fiscal year |
% Options vested |
Delivered at 100% |
1.0X |
Delivered between 90% & 100% |
0.5X to 1.0X linear |
Delivered below 90% |
0.0X |
Restrictive Stock Units (RSU) and Performance Based Units (PBU)
During the financial year ended March 31, 2024, certain members of management (other than CEO) were granted an RSUs and PBUs to purchase 204,462 Class A Ordinary Shares of the Company which we refer to as the “RSU and PBU”. The RSU/PBU shall vest as per the following terms:
Salient Plan Features |
Details |
Objective(s) |
o To drive business performance, sustainability agenda and superior share price performance o To attract and retain high performing senior-level talent |
Number of LTI Plans |
Two Plans: Restricted Stock Units(RSUs) and Performance Based Units (PBUs) |
Settlement |
Class A Ordinary Shares of ReNew Global |
Exercise Price |
$0.0001 |
Grant Frequency |
Annual (effective 1st July every year) subject to grant approval by the Remuneration Committee. (as an exception Fiscal’24 grant is with a different timeline) |
Vesting Schedule |
o RSUs: On the 1st anniversary of the Grant Date - 33%; o On the 2nd anniversary of the Grant Date – 33%; o On the 3rd anniversary of the Grant Date – 34% o PBUs: On the 3rd anniversary of the Grant Date – 100% subject to achievement of Performance Metrics |
Performance metrics** for vesting of PBUs |
o Revenue : 20% Weight o Profit After Tax (PAT) : 35% Weight o Operating Cash Flow (OCF) : 35% Weight o ESG Rating : 10%Weight Relative Total Shareholder Return (R-TSR) will be used as an additional modifier |
Financial Performance (for each of Revenue, PAT and OCF) |
Financial Performance
(i) Financial Performance will be assessed on a consolidated basis against targets approved by the Board annually in respect of the period of three fiscal years beginning with the fiscal year in which the Grant Date falls. While performance will be assessed against annual performance in each of |
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these three fiscal years (equally weighted), PBUs will vest only at the end of 3 years from the Grant Date. (ii) Performance evaluation would be done basis unaudited annual results of Renew generally published around June of the following financial year. (iii) Performance evaluation will be done as per the table below. There would be straight-line interpolation between performance levels and vesting will be computed on each metric separately.
Performance Evaluation (% of Target) Accrual / Vesting of PBUs Below Threshold or <85% of Target 0% At Threshold (85% of Target) 75% At Target (100% of Target) 100% At Maximum (115% of Target) 125%
ESG Performance
o ESG performance will be evaluated via Sustainalytics’ ESG Risk Rating scale (or equivalent metric as determined by the Remuneration Committee in its absence) on an annual basis over three financial years from the year of Grant Date. The last three annual ratings available on the date of Vesting will be considered for performance evaluation. o Vesting will occur by reference to ReNew’s ESG Risk Category at the end of each of the last three years as follows: Negligible – 125%; Low – 100%, Medium – 75%; High or Severe – 0%.
Relative-Total Shareholder Return Performance (R-TSR)
The numbers of Performance Based Units that will vest on the basis of Financial Performance and ESG Performance calculated as set out above will, however, be modified as follows.
o R-TSR Performance will be evaluated on the basis of ReNew’s TSR performance in comparison to other companies’ TSR performance in the S&P Global Clean Energy Index (or such other Index as may be approved by the Remuneration Committee from time to time) over the same period of 3 fiscal years (1st day of the first fiscal and the last day of the last fiscal) as financial performance evaluation] (no annual assessment) o The R-TSR Vesting Modifier ranges from -25% of Target (Bottom Quartile performance) to +25% (Top Quartile performance). o The R-TSR Vesting Modifier percentage will be added to / reduced from (as the case may be) the vesting percentage computed on the basis of Financial Performance and ESG Performance at the end of the third year from the Grant Date. o The overall number of Performance Based Units vesting following such modification in respect of each metric (excluding those for which no shares vest) therefore will range from 50% at threshold performance to 150% at maximum performance (i.e., 75%-25% to 125%+25%). There would be straight-line interpolation between Bottom and Top Quartiles
Notwithstanding the foregoing, vesting shall terminate immediately upon the Participant’s termination of employment or other service relationship other than due to death or disability or retirement.
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Non-Employee 2021 Incentive Award Plan
On August 23, 2021, the Company adopted and our shareholders have approved the Non-Employee 2021 Incentive Award Plan, or the “Non - Employee 2021 Plan”, under which the Company may grant cash and equity-based incentive awards to eligible non- executive directors and eligible non-employee service providers in order to attract, retain and motivate the persons who make important contributions to it. The material terms of the Non-Employee 2021 Plan are summarised below.
Eligibility and administration
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Our and our subsidiaries’ non-employee directors and eligible non-employee service providers will be eligible to receive awards under the Non-Employee 2021 Plan. The Non-Employee 2021 Plan is administered by the Board, which may delegate its duties and responsibilities to one or more committees of its directors and/or officers (referred to collectively as the plan administrator below), subject to the limitations imposed under the Non-Employee 2021 Plan, Section 16 of the Exchange Act, stock exchange rules and other applicable laws. The plan administrator has the authority to take all actions and make all determinations under the Non-Employee 2021 Plan, to interpret the Non-Employee 2021 Plan and award agreements and to adopt, amend and repeal rules for the administration of the Non-Employee 2021 Plan as it deems advisable. The plan administrator also has the authority to grant awards, determine which eligible non-employee directors or non-employee service providers receive awards and set the terms and conditions of all awards under the Non - Employee 2021 Plan, including any vesting and vesting acceleration provisions, subject to the conditions and limitations in the Non- Employee 2021 Plan.
Shares available for awards
An aggregate of 300,000 Class A Ordinary Shares was initially available for issuance under the Non -Employee 2021 Plan; provided that in no event shall the aggregate number of ordinary shares issued under the Non-Employee 2021 Plan exceed a number equal to (i) the number of ordinary shares available for issuance under the Employee 2021 Plan minus (ii) the number of ordinary shares issued under the Employee 2021 Plan. The Board increased the number of shares available for issuance by 1,000,000 Class A Ordinary Shares (in addition to the existing number available for issuance, thereby taking the overall limit to 1,300,000 Class A Ordinary Shares) which was subsequently approved, by shareholders at the 2023 annual general meeting.
If an award under the Non-Employee 2021 Plan expires, terminates, is settled for cash, is cancelled without having been fully exercised or is forfeited, any unused shares subject to the award will, as applicable, become or again be available for new grants under the Non- Employee 2021 Plan. Awards granted under the Non- Employee 2021 Plan in substitution for any options or other share or share based awards granted by an entity before the entity’s merger or consolidation with the Company or acquisition of the entity’s property or shares will not reduce the shares available for grant under the Non-Employee 2021 Plan.
Awards
The Non-Employee 2021 Plan provides for the grant of share options, SARs, restricted shares, RSUs and other share or cash-based awards. All awards under the Non-Employee 2021 Plan will be set forth in award agreements, which will detail the terms and conditions of awards, including any applicable vesting terms. A brief description of each award type is as follows:
Certain transactions
In connection with certain corporate transactions and events affecting our shares, including a change in control, or change in any applicable laws or accounting principles, the plan administrator has broad discretion to take action under the Non-Employee 2021 Plan in relation to non-employee directors to prevent the dilution or enlargement of intended benefits, facilitate the transaction or event or give effect to the change in applicable laws or accounting principles. This includes cancelling awards for cash or property, accelerating the
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vesting of awards, providing for the assumption or substitution of awards by a successor entity, adjusting the number and type of shares subject to outstanding awards and/or with respect to which awards may be granted under the Non-Employee 2021 Plan and replacing or terminating awards under the Non-Employee 2021 Plan. In addition, in the event of certain non-reciprocal transactions with our shareholders, the plan administrator will make equitable adjustments to awards outstanding under the Non-Employee 2021 Plan as it deems appropriate to reflect the transaction.
If, upon a change in control, any awards issued under the Non-Employee 2021 Plan are not assumed by the successor entity, such awards will accelerate and vest immediately upon the closing of the transaction constituting a change in control.
Plan amendment and termination
The Board may amend or terminate the Non-Employee 2021 Plan at any time; however, no amendment, other than an amendment that increases the number of shares available under the Non -Employee 2021 Plan, may materially and adversely affect an award outstanding under the Non-Employee 2021 Plan without the consent of the affected participant and shareholder approval will be obtained for any amendment to the extent necessary to comply with applicable laws. The Non-Employee 2021 Plan will remain in effect until the tenth anniversary of its effective date, unless earlier terminated by the Board. No awards may be granted under the Non-Employee 2021 Plan after its termination.
Clawback provisions, transferability and participant payments
All awards will be subject to any company claw back policy as may be set forth in such claw back policy or the applicable award agreement. Except as the plan administrator may determine or provide in an award agreement, awards under the Non-Employee 2021 Plan are generally non-transferable, except by will or the laws of descent and distribution, or, subject to the plan administrator’s consent, pursuant to a domestic relations order, and are generally exercisable only by the participant. With regard to tax withholding obligations arising in connection with awards under the Non-Employee 2021 Plan, the plan administrator may, in its discretion, accept cash, wire transfer or check, ordinary shares that meet specified conditions, a “market sell order,” or any combination of the foregoing.
For the year ended March 31, 2024, the aggregate compensation, including directors’ fees but excluding grants of share options, to our executive director and executive officers included in the list herein, was US$ 9,899,421. Our agreements with each of the members of senior management are listed in the section titled “Compensation — Sumant Sinha Employment Agreement” and “Compensation — Employment Agreement of Executive Officers other than Sumant Sinha” under Item 6.B. Except as otherwise disclosed, the above cash compensation does not include share compensation and employee benefits to our directors and senior management.
Outstanding Options at the Company (for directors and executive officers)
Outstanding Options as of March 31, 2023 |
|
Options Granted during the year |
|
Options exercised during the year |
|
Options cancelled/forfeited during the year |
|
Outstanding as of March 31, 2024 |
36,743,349 |
|
12,708,069 |
|
NIL |
|
92,925 |
|
49,358,493 |
Notes:
This includes options granted/cancelled with respect to Mr. Kedar Upadhye, who resigned from the position of CFO.
Compensation Clawback Policy
In fiscal year 2024, we adopted a Compensation Clawback Policy in compliance with the SEC rules and Nasdaq listing standards to recover any excess incentive-based compensation from current and former executive officers after an accounting restatement. A copy of Compensation Clawback Policy is filed as Exhibit 97.1 to this Annual Report.
Foreign Private Issuer Status
We currently follow the practice of our home country, England and Wales, in lieu of the corporate governance requirements of Nasdaq in respect of the following:
117
English law does not impose any of the requirements set out above on us.
Board of Directors
From and after August 23, 2023, the ReNew Global Shareholders Agreement requires the Board to be comprised of (i) up to ten (10) Directors, if there are three (3) or fewer Investor Nominee Directors (other than the Founder Director) or (ii) up to eleven (11) Directors, if there are four (4) Investor Nominee Directors (other than the Founder Director), in each case (A) a majority of whom must be Independent Directors, and (B) at least two (2) of the directors must be female.
As of March 31, 2024, our Board consisted of ten directors, being (A) six independent directors, of which three are female directors and one Lead Independent Director, satisfying the independence requirements of the Nasdaq and (B) four directors appointed and maintained in office by certain of our investors including one female director.
During Fiscal 24, the Board appointed Ms. Paula Gold-Williams, Ms. Nicoletta Giadrossi and Mr. Philip Graham New and also reappointed Mr. Manoj Singh, Sir Sumantra Chakrabarti and Ms. Vanitha Narayanan as Non-Executive Independent Directors with effect from August 23, 2023. The appointments were also approved by the Company’s shareholders at the 2023 annual general meeting of the Company and, the respective term of office for each appointee will last until the annual general meeting scheduled to be held in the calendar year 2025. During the year the Board also appointed Mr. Bill Rogers as CPP Investments second nominee Director.
During the year, Mr. Ram Charan and Ms. Michelle Robyn Grew, Independent Directors of the Company retire on August 22, 2023, due to expiry of their term. The tenure of Mr. Philip Kassin, MKC Investments LLC Nominee and Independent Director expired on August 22, 2023 following the expiration of the director nomination rights of MKC Investments LLC.
Mr. Manoj Singh was appointed as Lead Independent Director with effect from January 1, 2023, to hold office until August 23, 2024, subject to continuing to hold the office of Independent Director. In June 2024, the Board extended the term of the Lead Independent Director (Mr. Manoj Singh) from August 23, 2024, up to the conclusion of Annual General Meeting (AGM) of fiscal year 2025.
Term of Office for Directors
The ReNew Global Shareholders Agreement and ReNew Global Articles provides, that the Founder Investors have the right to appoint the Founder as a Director of the Company for so long as he is the CEO or Chairman or they (along with their affiliates) hold at least 40% of the Equivalent Voting Beneficial Shares they held as of the Closing Date, whichever is longer.
Also, from August 23, 2023 any “Major Investor” (being the Shareholders Agreement Investor holding the largest Effective Economic Interest not being less than 26% of the Equivalent Outstanding Voting Beneficial Shares, presently CPP Investments) is entitled to appoint two Directors to the ReNew Global Board. And each Voting Investor holding at least 15% of the Equivalent Outstanding Voting Beneficial Shares and that is not the Major Investor (presently Platinum Cactus) shall be entitled to appoint one Director. Notwithstanding the forgoing, in no event shall the total number of Directors appointed by the Voting Investors exceed four. Pursuant to ReNew Global Shareholders Agreement, if the “Voting Investors” (any shareholder of the Company who owns Voting Shares, other than a Founder Investor) as a group obtain the right to appoint more than four Directors, then the Director Appointment Rights shall be reallocated among the Appointing Investors as follows: (i) if there is an Appointing Investor who is a Major Investor, (x) such Appointing Investor shall be entitled to appoint two Directors, (y) the Appointing Investors holding the next two highest percentages of Equivalent Outstanding Voting Beneficial Shares (and each being not less than fifteen percent (15%)) will be entitled to appoint one Director each, and (z) no other Voting Investor(s) shall be an Appointing Investor; or (ii) if no Appointing Investor is a Major Investor, then (x) the Appointing Investors with the four (4) highest percentages of Equivalent Outstanding voting Beneficial Shares (each being not less than fifteen percent (15%)) will each be entitled to appoint one Director, and (y) no other Voting Investor(s) shall be an Appointing Investor.
118
Currently, all Independent Directors of the Company are appointed for an initial term of two years, subject to Company’s shareholders' approval at its annual general meeting following the appointment.
Board Diversity Matrix
(as of March 31, 2024) |
||||
Country of Principal Executive Offices |
India |
|||
Foreign Private Issuer |
England and Wales |
|||
Disclosure Prohibited under Home Country Law |
No |
|||
Total Number of Directors |
10 |
|||
|
Female |
Male |
Non- Binary |
Did Not Disclose Gender |
Part I: Gender Identity |
|
|
|
|
Directors |
4 |
6 |
- |
- |
Part II: Demographic Background |
|
|
|
|
Underrepresented Individual in Home Country |
- |
|||
Jurisdiction |
- |
|||
LGBTQ+ |
- |
|||
Did Not Disclose Demographic Background |
- |
|||
Duties of Directors
Under English law, ReNew Global’s directors owe certain duties towards ReNew Global, including duties to act in the way they consider, in good faith, would be most likely to promote the success of ReNew Global for the benefit of its members as a whole, to exercise reasonable care, skill and diligence, to exercise independent judgment, to avoid a situation in which they have, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of ReNew Global, to act in accordance with ReNew Global’s constitution and only exercise their powers for the purposes for which they are conferred, not to accept benefits from a third party conferred by reason of their being a director or doing, or not doing, anything as a director, and to declare any interest that they have, whether directly or indirectly, in a proposed or existing transaction or arrangement with ReNew Global. Pursuant to the ReNew Global Shareholders Agreement and the ReNew Global Articles, ReNew Global has expressly agreed that no director appointed by a Shareholders Agreement Investor will have the duty to provide or offer to ReNew Global any information or opportunity which arises in any other capacity.
Committees of the ReNew Global Board
The Board has five committees: an audit committee, a remuneration committee, a nomination and board governance committee and a finance and operations committee and an environmental, social and governance Committee. Each committee’s members and functions are as described below.
Audit Committee
The Company’s audit committee (the “Audit Committee”) consists of three (3) independent directors. The members of ReNew Global’s Audit Committee as of March 31, 2024, were Mr. Manoj Singh, Ms. Vanitha Narayanan, and Ms. Paula Gold-Williams. Mr. Singh is the chairperson of the committee. Each committee member satisfies the independence requirements of Nasdaq and the independence requirements of Rule 10A-3 under the Exchange Act. The Board has determined that Mr. Singh qualifies as an audit committee financial expert within the meaning of the SEC rules. During the year, Ms. Paula Gold-Williams was appointed as member of the Audit Committee in place of Mr. Michelle Robyn Grew. The Audit Committee is responsible for, among other things:
119
Remuneration Committee
The Company’s remuneration committee (the “Remuneration Committee”) consists of four (4) directors. The members of the Remuneration Committee as of March 31, 2024, were Ms. Vanitha Narayanan, Mr. Manoj Singh, Ms. Nicoletta Giadrossi and Ms. Kavita Saha. Ms. Vanitha Narayanan is the Chairperson. During the year, Ms. Vanitha Narayanan was appointed as Chairperson in place of Mr. Manoj Singh and Ms. Nicoletta Giadrossi and Ms. Kavita Saha were appointed as member of the Remuneration Committee in place of Sir Sumantra Chakrabarti and Mr. Sumant Sinha. The Remuneration Committee is responsible for, among other things:
On May 18, 2023, the Board of the Company approved amendments to its Remuneration Charter. The scope of the charter was expanded to cover periodic review of the management development and succession plans for the Executive Officers other than the CEO and such other officers of the Company as it may deem fit.
Nomination and Board Governance Committee
The Company’s Nomination and Board Governance Committee (the “Nomination Committee”) consists of five (5) directors. The members of the Nomination Committee as of March 31, 2024, were Sir Sumantra Chakrabarti, Mr. Sumant Sinha, Ms. Kavita Saha, Ms. Nicoletta Giadrossi and Mr. Manoj Singh. Sir Sumantra is the chairperson. During the year, Ms. Nicoletta Giadrossi and Mr. Manoj Singh were appointed as member of the Nomination Committee. The Nomination Committee is responsible for, among other things:
120
On May 18, 2023, the Board of the Company approved amendments to its Nomination and Board Governance Committee Charter. The scope of the charter was modified by moving the talent management and succession planning and performance appraisal of Executive Officers (other than the CEO) to the Remuneration Committee.
Environment, Social and Governance Committee
The Environment, Social and Governance (“ESG”) Committee, as of March 31, 2024, comprises of three independent directors of the Company: Ms. Kavita Saha, Mr. Philip Graham New and Sir Sumantra Chakrabarti who serves as the chairperson of the ESG Committee. The Committee aims to support the Board in its oversight of (i) ESG vision, strategy and targets set out on an ongoing basis (ii) implementation of ESG initiatives (iii) monitor the progress against the vision and targets (iv) advise on specific ESG priorities with the goal of integrating ESG across the Company.
The duties and responsibilities of the ESG Committee include, but are not limited to, the following
Finance and Operations Committee
The Finance and Operations Committee (“F&O Committee”) consists of five (5) directors of the Company out of which three are independent. The members of F&O Committee as of March 31, 2024, were Mr. Sumant Sinha, Ms. Kavita Saha, Ms. Vanitha Narayanan, Ms. Paula Gold-Williams and Mr. Philip Graham New. Mr. Sinha is the chairperson of the F&O Committee. Mr. Yuzhi Wang is a permanent invitee to the committee. During the year, Ms. Vanitha Narayanan, Ms. Paula Gold-Williams and Mr. Philip Graham New were appointed as member of the F&O Committee. Further, Mr. Yuzhi Wang and Mr. Philip Kassin ceased to be member of F&O Committee. The F&O Committee is responsible for investment, borrowings, bidding and M&A related matters.
121
D. Employees
The following table provides a breakdown of our employee base by function as of the dates indicated:
|
|
As of March, 31 |
|
||||
Function: |
|
2022 |
|
2023 |
|
2024 |
|
Business support (includes finance, legal, company secretarial, human resources, execution support, IT, offtaker, billing and management teams) |
|
467 |
|
477 |
|
619 |
|
Business development (includes business development, bidding and new business teams) |
|
54 |
|
134 |
|
120 |
|
Digital Solutions through Regent Climate Connect Knowledge Solutions Private Limited |
|
— |
|
170 |
|
53 |
|
Design and engineering (include design, technical and power evacuation teams) |
|
298 |
|
193 |
|
207 |
|
Procurement and commercial |
|
46 |
|
52 |
|
116 |
|
Module and Cell Manufacturing |
|
— |
|
160 |
|
1373 |
|
Project execution |
|
304 |
|
537 |
|
640 |
|
O&M (includes project asset management and performance monitoring teams) |
|
441 |
|
667 |
|
730 |
|
Quality health safety and environment |
|
65 |
|
91 |
|
130 |
|
Total |
|
1,675 |
|
2,481 |
|
3,988 |
|
None of our employees is represented by a labour union with respect to his or her employment with us. We have not experienced any material work stoppages or labour disruptions in the past and we consider our relations with our employees to be amicable.
E. Share Ownership
Ownership of our shares by our directors and executive officers is set forth in the section titled “Major Shareholders” under Item 7.A of this Report.
122
The following table sets forth information regarding the beneficial ownership of our Ordinary Shares as of March 31, 2024 by:
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days, provided that any person who acquires any such right with the purpose or effect of changing or influencing the control of the company, or in connection with or as a participant in any transaction having such purpose or effect, immediately upon such acquisition shall be deemed to be the beneficial owner of the securities which may be acquired through the exercise of such right. Under these rules, more than one person may be deemed to be a beneficial owner of these same securities.
As of March 31, 2024, 244,266,823 Class A Ordinary Shares par value $ 0.0001 per share, one Class B Ordinary Share par value $ 0.0001 per share, 118,363,766 Class C Ordinary Shares par value $0.0001 per share, one Class D Ordinary Share par value $0.0001 per share, one Deferred Share par value US$ 0.01 per share and 50,000 Redeemable Preference Shares par value GBP 1.00 per share, were issued and outstanding. The Company as of March 31, 2024 held 38,698,288 Class A Ordinary Shares par value $0.0001 per share as treasury shares.
Upon the sale or transfer of a Class C Ordinary Share by CPP Investments, each such Class C Ordinary Share will automatically be re-designated as one (1) Class A Ordinary Share in the hands of a transferee, in the circumstances described in Article 8.3 of the ReNew Global Articles. See section titled “Memorandum and Articles of Association — Share Capital” under Item 10.B.
Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all shares of voting shares beneficially owned by them.
Unless otherwise indicated, the business address of each of the individuals from ReNew Global is Commercial Block-1, Zone 6, Golf Course Road, DLF City Phase V, Gurugram 122009, Haryana, India.
Beneficial Owners |
|
Number of Class A Ordinary Shares |
|
Percentage of Class A Ordinary Shares (1) |
|
Number of Class B Ordinary Shares |
|
Percentage of Class B Ordinary Shares (2) |
|
Number of Class C Ordinary Shares |
|
Percentage of Class C Ordinary Shares |
|
Number of Class D Ordinary Shares |
|
Percentage of Class D Ordinary Shares |
Five Percent Holders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CPP Investments (3) |
|
88,846,844 |
|
34.6 |
|
|
|
- |
|
118,363,766 |
|
100 |
|
1 |
|
100 |
Platinum Cactus (4) |
|
58,170,916 |
|
23.8 |
|
|
|
- |
|
- |
|
|
|
|
|
- |
JERA (5) |
|
28,524,255 |
|
11.7 |
|
|
|
- |
|
- |
|
|
|
|
|
- |
Directors and Executive Officers |
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
Mr. Sumant Sinha (6)(7) |
|
26,670,044 |
|
9.8 |
|
1 |
|
100.00 |
|
- |
|
|
|
|
|
|
Mr. Manoj Singh |
|
37,471 |
|
* |
|
|
|
- |
|
- |
|
|
|
|
|
- |
Sir Sumantra Chakrabarti |
|
37,471 |
|
* |
|
|
|
- |
|
- |
|
|
|
|
|
- |
Ms. Vanitha Narayanan |
|
37,471 |
|
* |
|
|
|
- |
|
- |
|
|
|
|
|
- |
Ms. Paula Gold- Williams |
|
- |
|
- |
|
|
|
- |
|
- |
|
|
|
|
|
- |
Mr. Philip Graham New |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Ms. Nicoletta Giadrossi |
|
- |
|
- |
|
|
|
- |
|
- |
|
|
|
|
|
- |
Ms. Kavita Saha |
|
- |
|
- |
|
|
|
- |
|
- |
|
|
|
|
|
- |
Mr. Yuzhi Wang |
|
- |
|
- |
|
|
|
- |
|
- |
|
|
|
|
|
- |
Mr. William Bowen Shephard Rogers |
|
- |
|
- |
|
|
|
- |
|
- |
|
|
|
|
|
- |
Mr. Kailash Vaswani (7) |
|
* |
|
* |
|
- |
|
- |
|
- |
|
|
|
|
|
- |
Mr. Mayank Bansal (7) |
|
* |
|
* |
|
- |
|
- |
|
- |
|
|
|
|
|
- |
Mr. Sanjay Varghese (7) |
|
* |
|
* |
|
- |
|
- |
|
- |
|
|
|
|
|
- |
Mr. Balram Mehta (7) |
|
* |
|
* |
|
- |
|
- |
|
- |
|
|
|
|
|
- |
All directors and executive officers as a group (14 persons) (8) |
|
30,279,548 |
|
11.0 |
|
- |
|
- |
|
- |
|
|
|
|
|
- |
Notes:
* Less than 1%
123
124
Shareholders Agreement
The Company entered into the ReNew Global Shareholders Agreement on August 23, 2021 with the Founder Investors, GSW, CPP Investments, Platinum Cactus, JERA and RMG Sponsor II, or together the “Shareholders Agreement Investors”. On April 28, 2023, when GSW ceased to hold any Shares, the ReNew Global Shareholders Agreement terminated with respect to GSW and GSW ceased to be a Shareholders Agreement Investor. Pursuant to an amendment agreement dated July 17, 2023 (executed on July 24, 2023) between the Company and the Shareholders Agreement Investors, attached hereto as exhibit 4.17, the ReNew Global Shareholders Agreement was amended, inter-alia to change the parties’ agreements as to the rights of major investors in the Company under the ReNew Global Shareholders Agreement to appoint directors and associated provisions.
Furthermore, on July 24, 2023, Renew Global entered into a standstill agreement with CPP Investments (the “Standstill Agreement”), attached hereto as exhibit 4.18, pursuant to which CPP Investments agreed not to, directly or indirectly and either alone or jointly, acquire, offer or propose to acquire, or enter into any agreement to acquire any interest in any Class A Ordinary Shares (or rights or options to acquire any Class A Ordinary Shares), or any securities convertible into or exchangeable for Class A Ordinary Shares from July 24, 2023 to July 23, 2026, subject to certain exceptions and other terms and conditions set forth therein, including earlier termination of the standstill period upon the occurrence of certain events.
Pursuant to the ReNew Global Shareholders Agreement, among other things, the Company and the Shareholders Agreement Investors agreed that the majority of the directors on the Board will not be resident in India, the United Kingdom, the Channel Islands or the Isle of Man. From and after August 23, 2023, the ReNew Global Shareholders Agreement requires the Board to be comprised of (i) up to ten (10) Directors, if there are three (3) or fewer Investor Nominee Directors (other than the Founder Director) or (ii) up to eleven (11) Directors, if there are four (4) Investor Nominee Directors (other than the Founder Director), in each case (A) a majority of whom must be Independent Directors, and (B) at least two (2) of the directors must be female.
Pursuant to the ReNew Global Shareholders Agreement, certain Shareholders Agreement Investors have the right to appoint or reappoint certain directors (“Investor Nominee Directors”) to the Board as follows:
The Company and the Shareholders Agreement Investors agreed to take all necessary actions to give effect to the director appointment rights of the applicable Shareholders Agreement Investors (including, with respect to the Shareholders Agreement Investors, voting their ReNew Global Shares in favour of the appointment, reappointment or removal, as applicable, of such Shareholders Agreement Investors’ respective appointed directors).
Pursuant to the ReNew Global Shareholders Agreement, the Company is required to procure that, by no later than August 23, 2027, each Director (other than Directors who hold an executive position with the Company) is elected on an annual basis at a general meeting of the Company’s shareholders.
125
Pursuant to the ReNew Global Shareholders Agreement, the Company and the Shareholders Agreement Investors agreed that, any action by the Board to increase or decrease the maximum size of the Board will require the prior written consent of each Shareholders Agreement Investor that has the right to appoint a director at such time pursuant to the terms of the ReNew Global Shareholders Agreement, except that if a Shareholders Agreement Investor with a director appointment right ceases to have such appointment right, the size of the Board may be decreased by the director such Shareholders Agreement Investor ceases to have such right to appoint, without the consent of any Shareholders Agreement Investor.
“Effective Economic Interest” means, with respect to a Shareholders Agreement Investor or a Significant Shareholder, as applicable, at a particular time of determination, the percentage equal to (a) (i) the total number of Class A Ordinary Shares and Class C Ordinary Shares, if any, held by such Shareholders Agreement Investor and its affiliates or such Significant Shareholders and its affiliates, as applicable, at such time, plus (ii) the number of Class A Ordinary Shares that would have been issued to such Shareholders Agreement Investor and its affiliates or such Significant Shareholder and its affiliates, as applicable, had they exchanged the ReNew India Ordinary Shares, if any, that they continue to hold at such time for Class A Ordinary Shares at the exchange ratio under the Business Combination Agreement (as proportionally adjusted for any share dividends, share combinations or consolidations, share splits, bonus issues or merger, consolidation or other reorganization or recapitalization effected with respect to Company’s ordinary shares or ReNew India Ordinary Shares after the Closing), divided by (b) the Equivalent Outstanding Economic Beneficial Shares at such time. However, the effect of the issue or buy-back of certain shares after August 23, 2021, is disregarded for the purpose of this calculation under the ReNew Global Shareholders Agreement.
“Equivalent Outstanding Economic Beneficial Shares” means, at a particular time of determination, (a) the total number of Class A Ordinary Shares and Class C Ordinary Shares issued and outstanding at such time, plus (b) the total number of Class A Ordinary Shares that would have been issued to Shareholders Agreement Investors and their affiliates if they had exchanged the ReNew India Ordinary Shares that they continue to hold at such time for Class A Ordinary Shares at the exchange ratio (0.8289) under the Business Combination Agreement (as proportionally adjusted for any share dividends, share combinations or consolidations, share splits, bonus issues or merger, consolidation or other reorganization or recapitalization effected with respect to ReNew Global’s shares or ReNew India Ordinary Shares after the Closing).
“Equivalent Outstanding Voting Beneficial Shares” means, as of a particular time of determination, an amount equal to (a) the aggregate of the Equivalent Voting Beneficial Shares of the Founder Investors and CPP Investments and their respective affiliates as of such time, plus (b) the total number of issued and outstanding Class A Ordinary Shares as of such time.
“Equivalent Voting Beneficial Shares” means, with respect to the Founder Investors or CPP Investments, as applicable, as of a particular time of determination, an amount (rounded down to the nearest whole number) equal to (a) the number of ReNew India Ordinary Shares held as of such time by such Investor and its affiliates on an as-converted basis, multiplied by (b) 0.8289 (as proportionally adjusted for any share dividends, share combinations or consolidations, share splits, bonus issues or merger, consolidation or other reorganization or recapitalization effected with respect to the Shares or the ReNew India Ordinary Shares after the Closing).
“ReNew India Ordinary Shares” means the equity shares in the issued, subscribed and paid-up share capital of ReNew India having a par value of Rs. 10 each.
Removal; Resignation; Vacancies
Each Shareholders Agreement Investor that has the right to appoint a director to the Board has the right to remove its appointed director on the Board and the exclusive right to appoint a replacement director to fill any vacancy that is created at any time by the death, disqualification, disability, retirement, removal, failure of being elected or resignation of such Shareholders Agreement Investors’ appointed director on the Board, and the Company will be obligated to cause such vacancy to be filled, as soon as possible, by such replacement director. The Company has further agreed that, subject to applicable law, it will not propose any resolution to its shareholders which would, if passed, remove, reduce, restrict, impair or otherwise prejudice the rights and powers of any Shareholders Agreement Investor (or any director appointed by such Shareholders Agreement Investor on the Board) under the ReNew Global Shareholders Agreement, including its director appointment rights, if any, other than any such resolution requested by such Shareholders Agreement Investor or that is required by applicable law.
If a Shareholders Agreement Investor with a director appointment right ceases to have such right pursuant to the terms of the ReNew Global Shareholders Agreement such that there are any seats on the Board for which no Shareholders Agreement Investor has the right to appoint a director, the selection of any director to full that seat will be conducted in accordance with applicable law and the organizational documents of the Company then in effect.
126
Board Committees; Other Governance Principles
In accordance with the ReNew Global Shareholders Agreement, the Company agreed to cause the Board to establish and maintain as follows:
Unless already serving as a member of the applicable committee, upon the request of a Shareholders Agreement Investor that, together with its affiliates, holds an Effective Economic Interest equal to or greater than 10% and that has a director appointment right, the Company will be obligated to cause the director appointed by such Shareholders Agreement Investor to be appointed as an observer on each of the audit committee, the remuneration committee, the nomination committee and the finance and operations committee, who will be entitled to all rights and privileges of a member of such committee except for the right to vote in meetings of such committee and to be considered for purposes of the calculation of a quorum.
Observer rights
JERA is entitled (provided that it, together with its Affiliates, holds at least 40% of the Class A Ordinary Shares held by it as of the Closing Date (excluding, any dilution post-Closing Date) and it does not hold a right to appoint an Investor Nominee Director at the relevant time)) from time to time to appoint one person as an observer on the Board and to remove any such person so appointed and appoint another person in that person’s place, (ii) for so long as RMG, together with its Affiliates, holds at least 40% of the Effective Economic Interest held by RMG as of the Closing Date (excluding, any dilution post-Closing Date), RMG shall be entitled from time to time to appoint one person as an observer on the Board and to remove any such person so appointed and appoint another person in that person’s place and (iii) for so long as the Founder, together with his Affiliates, including the other Founder Investors, holds at least 40% of the Effective Economic Interest held by the Founder Investors as of the Closing Date (excluding, any dilution post -Closing Date), the Founder shall be entitled from time to time to appoint one person as an observer on the Board and to remove any such person so appointed and appoint another person in that person’s place.
Founder Consultation Rights
Pursuant to the ReNew Global Shareholders Agreement, for so long as the Founder (together with his affiliates) holds any Ordinary Shares of the Company or ReNew India Ordinary Shares, the Company must first consult with the Founder in good faith before appointing or removing the Chief Executive Officer of the ReNew group or the Chairman of the Board.
Founder Investor Exchange Rights
At any time prior to August 20, 2026, each Founder Investor will have a right under the ReNew Global Shareholders Agreement to deliver a notice to the Company requiring the Company, at any time, subject to applicable law, as such Founder Investor may determine, to issue Class A Ordinary Shares to such Founder Investor and/or its Affiliates or nominees in exchange for the transfer to the Company of ReNew India Ordinary Shares held by such Founder Investor, at the same exchange ratio as applied under the Business Combination Agreement (as proportionally adjusted for any share dividends, share combinations or consolidations, share splits, bonus issues or merger, consolidation or other reorganization or recapitalization effected with respect to ReNew Global Shares or ReNew India Ordinary Shares after the Closing). The Company and the Shareholders Agreement Investors will agree to take all necessary actions (including, with respect to the Shareholders Agreement Investors, voting their ReNew Global Shares in favour of any resolution) to increase our share capital to effect and facilitate such issuance and to register such Class A Ordinary Shares pursuant to and in accordance with the Registration Rights, Coordination and Put Option Agreement.
Restrictions Relating to ReNew
For so long as CPP Investments or a Founder Investor continues to hold ReNew India Ordinary Shares following the Closing, the Company has agreed under the ReNew Global Shareholders Agreement not to permit the Company to, without CPP Investments’, such Founder Investor’s and, in the case of the matters contemplated by clauses (i) through (iii), Platinum Cactus’s prior written consent, as
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applicable: (i) issue shares, other than issuances to the Company or to a wholly owned subsidiary of the Company; (ii) alter or change the rights, preferences or privileges of the ReNew India Ordinary Shares; (iii) repurchase, buy- back or otherwise extinguish any ReNew India Ordinary Shares, other than in connection with the Founder Investors’ put rights under the Registration Rights, Coordination and Put Option Agreement; or (iv) amend or waive any provision of the constitutional documents of ReNew India, in each case, in a manner that is materially adverse and disproportionate to CPP Investments or such Founder Investor, as applicable, in relation to its ReNew India Ordinary Shares as compared to any other shareholder of the Company in relation to such shareholder’s ReNew India Ordinary Shares.
ReNew India Ordinary Shares Transfer Restrictions
In addition, the Company and the Shareholders Agreement Investors have agreed, pursuant to the ReNew Global Shareholders Agreement, that the articles of association of ReNew India adopted with effect from the Closing will provide that CPP Investments and the Founder Investors will not be permitted to transfer any ReNew India Ordinary Shares other than to their respective affiliates or to the Company, except for certain transfers by the Founder Investors relating to indebtedness incurred by the Founder Investors and their affiliates.
ReNew Global Articles
Pursuant to the ReNew Global Shareholders Agreement, the Company on August 23, 2021 adopted the ReNew Global Articles with effect as of the Closing which, among other things, incorporated and gave effect to the applicable provisions of the ReNew Global Shareholders Agreement and the terms of the ordinary shares set forth in the ReNew Global Shareholders Agreement as discussed below and provide that the provisions of the ReNew Global Articles that incorporate and give effect to such provisions and terms may not be amended or waived without the prior written consent of the Shareholders Agreement Investors that hold an Effective Economic Interest. Pursuant to the ReNew Global Shareholders Agreement, the Company and the Shareholders Agreement Investors agreed that in the event of any conflict or inconsistency between the ReNew Global Shareholders Agreement and the ReNew Global Articles, it is their intent that the provisions of the ReNew Global Shareholders Agreement will prevail and the Company and the Shareholders Agreement Investors will take all necessary actions within their control (including, with respect to the Shareholders Agreement Investors, voting their ReNew Global Shares in favour of any resolution) to amend the ReNew Global Articles accordingly.
On July 24, 2023, the shareholders’ agreement dated August 23, 2021 between certain of the Company’s significant investors (the ‘‘Investors’’) and the Company (the ‘‘SHA’’) was amended with immediate effect, principally to change the parties’ agreements as to the rights of Investors in the Company under the SHA to appoint directors and associated provisions.
As required by the amended SHA, it was necessary to amend its articles of association (the ‘‘New Articles’’) so as to remove the inconsistencies between the Company’s previous articles of association and the SHA that have arisen as a result of the latter’s amendment. To understand the changes in full, shareholders are encouraged to review the full text of the New Articles, which is appended herewith as an exhibit. These amendments to the articles were approved unanimously by the Board on July 17, 2023 and subsequently by the shareholders at Annual General Meeting of the Company held on September 12, 2023.
Terms of ReNew Global Shares—Voting Rights
Pursuant to the ReNew Global Articles the following voting rights attach to the ReNew Global Shares:
Terms of ReNew Global Shares—Redemption and Cancellation; Conversion and Re-designation
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Pursuant to the ReNew Global Shareholders Agreement, the ReNew Global Articles provide that (i) subject to applicable law, the Company may in its sole discretion redeem and cancel the Class B Ordinary Share for nominal value at any time after the Founder Investors and their respective affiliates cease to hold any ReNew India Ordinary Shares and (ii) the Company will redeem and cancel the Class D Ordinary Share for nominal value as soon as reasonably practicable following the transfer and contribution to ReNew Global of all of the ReNew India Ordinary Shares that continue to be held by CPP Investments and its affiliates following the Closing in exchange for Class A Ordinary Shares pursuant to the terms of the Business Combination Agreement.
In addition, pursuant to the ReNew Global Shareholders Agreement, the ReNew Global Articles provides that each Class C Ordinary Share will be automatically re -designated as one Class A Ordinary Share in the hands of a transferee (other than where the holder thereof transfers such Class C Ordinary Share to any of its affiliates) upon a transfer of such Class C Ordinary Share: (i) pursuant to a widespread public distribution; (ii) to the Company; (iii) in transfers in which no transferee (or group of associated transferees within the meaning of the U.S. Bank Holding Company Act of 1956, as amended, of the transferring holder) receives equal to or more than 2% of the issued and outstanding Class A Ordinary Shares or a class of voting shares of the Company representing 2% of the voting power attached to such class of voting shares; or (iv) to a transferee that controls more than 50% of the issued and outstanding Class A Ordinary Shares and more than 50% of the issued and outstanding shares of each other class of voting shares of the Company, without counting any Class C Ordinary Share transferred to such transferee.
Terms of ReNew Global Shares—Transferability
Pursuant to the ReNew Global Shareholders Agreement, the ReNew Global Articles provide that each of the Class B Ordinary Share and the Class D Ordinary Share shall not be transferable by the holder thereof, except to any of its affiliates.
Terms of ReNew Global Shares—Rights to Dividends and Other Distributions
Pursuant to the ReNew Global Shareholders Agreement, the ReNew Global Articles contains provisions reflecting that (i) the holders of Class A Ordinary Shares and Class C Ordinary Share are entitled to dividends and other distributions pro rata with all other shares in the capital of ReNew Global which are entitled to dividends and other distributions and (ii) until August 23, 2024, the holder of the Class B Ordinary Share and the holder of the Class D Ordinary Share will be entitled to participate in dividends and other distributions by ReNew Global to the holders of Class A Ordinary Shares and Class C Ordinary Share, which will be made pro rata to the number of Class A Ordinary Shares and Class C Ordinary Share held by each such person and on the basis that each of the holders of the Class B Ordinary Share and the Class D Share will be deemed to hold, at the time of such dividend or other distribution, such number of Class A Ordinary Shares as would have been issued to such holder and its affiliates if such holder and its affiliates had exchanged the ReNew India Ordinary Shares that they continue to hold at the time of such dividend or other distribution for Class A Ordinary Shares at the exchange ratio under the Business Combination Agreement (as proportionally adjusted for any share dividends, share combinations or consolidations, share splits, bonus issues or merger, consolidation or other reorganization or recapitalization effected with respect to ReNew Global Shares or ReNew India Ordinary Shares after the Closing), without duplication of, and reduced by, the amount of any dividends or other distributions made by ReNew to its shareholders in which the holder of the Class B Ordinary Share or any of its affiliates or the holder of the Class D Ordinary Share or any of its affiliates participates in its or their capacity as a holder of ReNew India Ordinary Shares.
Termination
Following the Closing, the ReNew Global Shareholders Agreement will terminate (i) as to a particular Shareholders Agreement Investor, at such time as such Shareholders Agreement Investor and its affiliates cease to hold any ReNew Global Shares or ReNew India Ordinary Shares and (ii) as to all Shareholders Agreement Investors and ReNew Global, at such time as all Shareholders Agreement Investors and their respective affiliates cease to hold any ReNew Global Shares or ReNew India Ordinary Shares or upon the written consent of all parties to the ReNew Global Shareholders Agreement.
Registration Rights, Coordination and Put Option Agreement
Pursuant to the Business Combination Agreement, on August 23, 2021, the Company, each of GSW, CPP Investments, Platinum Cactus, JERA, SACEF and RMG Sponsor II, or “Significant Shareholders”, the Founder Investors and ReNew India entered into a registration rights, coordination and put option agreement, or the “Registration Rights, Coordination and Put Option Agreement,” pursuant to which, among other things, (i) the Significant Shareholders are entitled to certain registration rights in respect of the resale, pursuant to Rule 415 under the Securities Act, of the Class A Ordinary Shares and the Class C Ordinary Share to be received by or issued or issuable to such parties in connection with the Business Combination pursuant to the terms of the Business Combination Agreement, or the “Significant Shareholder Registrable Securities,” (ii) the Significant Shareholders (other than SACEF and RMG Sponsor II (for so long as it is not an affiliate of ReNew Global)) agreed to certain obligations to coordinate transfers and sales of Significant Shareholder Registrable Securities, (iii) the Founder Investors are entitled to require the Company to purchase certain ReNew India Ordinary Shares held by the Founder Investors and the Company agreed to register for issuance of Class A Ordinary Shares, or the “Founder Registrable Securities”
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and, together with the Significant Shareholder Registrable Securities, the “Registrable Securities,” to the extent required to be issued for purposes of financing and facilitating such purchase of ReNew India Ordinary Shares pursuant to a Founder Investor Ordinary Put Option (as described below), or a “Founder Investor Put Financing Issuance,” and (iv) the Significant Shareholders (other than SACEF) and the Founder Investors will agree to certain post-Closing transfer restrictions during a lock-up period in respect of ReNew Global Shares held by them.
Registration Rights
Under the Registration Rights, Coordination and Put Option Agreement, we agreed to file a registration statement on Form F- 1 within thirty (30) days of the Closing for the resale of Registrable Securities pursuant to Rule 415 under the Securities Act, and use our commercially reasonable efforts to cause such registration statement to become effective as soon as practicable and to maintain such effectiveness until such time that all Registrable Securities covered by such registration statement until such time as there are no longer any Registrable Securities. The Company also agreed to convert such registration statement to a shelf registration statement on Form F-3 as soon as practicable after the Company becomes eligible to use such form and to similarly maintain the effectiveness of such registration statement. Additionally, for so long as the Founder Investors have the right to require the Company to purchase ReNew India Ordinary Shares held by them (as described below), the Company agreed to file and maintain a registration statement to cover issuances of Class A Ordinary Shares by the Company for purposes of a Founder Investor Put Financing Issuance.
The Significant Shareholders are entitled from time to time to deliver to the Company a request to sell all or a portion of their Registrable Securities under an effective shelf registration statement in an underwritten offering; provided, that (a) each Significant Shareholder shall be entitled to make no more than two (2) such requests in the 12 -month period immediately following Closing and no more than one (1) such request in each calendar quarter thereafter, and (b) the Company shall not be required to effect an offering if (i) during the 12-month period immediately following Closing, the Company has effected one (1) offering pursuant to a Significant Shareholder’s request in the immediately preceding three (3) month period, and (ii) after such 12-month period, the Company has effected two (2) offerings pursuant to a Significant Shareholder’s request in the calendar quarter in which a request for an offering is received.
Each other Significant Shareholder holding Registrable Securities are entitled to join the requesting Significant Shareholder in underwritten offerings under the shelf registration statement by requesting for such number of such joining Significant Shareholder’s ReNew Global Shares equal to not more than its Effective Economic Interest be included in such offering, subject to customary underwriter cut-backs. If the managing underwriter(s) appointed by the Company in respect of such offering advice that marketing factors require a cut -back in the number of Registrable Securities requested to be sold under the offering, the number of Registrable Securities to be sold by each requesting Significant Shareholder will be reduced on a pro rata basis based on the number of Registrable Securities requested to be sold by all of the selling Significant Shareholders; provided that: (a) if such right is exercised by GSW, the number of Registrable Securities to be sold by GSW in respect of such offering will not be reduced and will take priority (i) if GSW is the Significant Shareholder initially requesting such offering, in respect of an amount of Registrable Securities equal to the greater of (A) such number of Registrable Securities, when taken together with the amount of all Registrable Securities sold by GSW in all prior offerings requested by GSW, equal to 5% of the then issued and outstanding ReNew Global Shares and (B) such number of Registrable Securities as may be necessary to enable GSW to reduce (x) the GSW Total Equity Interest to 33% and/or (y) the aggregate number of Class A Ordinary Shares then held by GSW or any of its affiliates does not exceed 4.9% of the aggregate number of issued and outstanding Class A Ordinary Shares, Class B Ordinary Shares and Class D Ordinary Shares; or (ii) if GSW is not the Significant Shareholder initially requesting such offering, in respect of an amount of Registrable Securities as may be necessary to enable GSW to reduce (A) the GSW Total Equity Interest to 33% and/or (B) the aggregate number of Class A Ordinary Shares then held by GSW or any of its affiliates does not exceed 4.9% of the aggregate number of issued and outstanding Class A Ordinary Shares, Class B Ordinary Shares and Class D Ordinary Shares, or the “GSW Priority Offering Right,” and any offering of Registrable Securities in respect of which GSW exercises the GSW Priority Offering Right, a “GSW Priority Offering”; and (b) subject to the GSW Priority Offering Right, the number of Registrable Securities to be sold by SACEF in respect of such offering will not be reduced and will take priority. If GSW exercises its GSW Priority Offering Right, in each subsequent offering that is not a GSW Priority Offering, each of the Significant Shareholders other than GSW will be entitled to have their Registrable Securities sold (pro rata to the number of Registrable Securities requested to be sold by each such Significant Shareholder in aggregate in each GSW Priority Offering) in priority to any Registrable Securities requested to be sold by GSW in such offering, until each such Significant Shareholder (other than GSW) has sold such number of Registrable Securities it had requested to sell and would have been entitled to sell in prior GSW Priority Offerings but for the exercise of the GSW Priority Offering Right, or the “Catch-Up Right”; provided that if a Significant Shareholder elects not to participate in a subsequent offering requested by GSW where such Significant Shareholder would have been entitled to exercise its Catch- Up Right, such Significant Shareholder shall cease to be entitled to such Catch-Up Right in respect of such number of Registrable Securities it would have been entitled to sell under its Catch-Up Right had such Significant Shareholder participated in such offering.
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If the Company proposes to file a registration statement to register securities or effect an offering of securities for its own account or the account of any other shareholder who is not a Significant Shareholder or a Founder Investor, the Company will be required to notify all Significant Shareholders and the Founder Investors prior to filing such registration statement, and each of the Significant Shareholders and Founder Investors will be entitled to piggyback registration rights to request that Registrable Securities held by them equal to not more than such Significant Shareholder’s or such Founder Investor’s Effective Economic Interest be included in such registration statement. If the managing underwriter(s) appointed in respect of a piggyback registration that is an underwritten offering advice that marketing factors require a cut-back in the number of Registrable Securities that can be sold under the offering, the number of Registrable Securities to be sold by each Significant Shareholder and each Founder Investor requesting to include its Registrable Securities in such offering will be reduced on a pro rata basis based on the number of Registrable Securities requested to be sold by all of the requesting Significant Shareholders and Founder Investors; provided, that (a) GSW shall be entitled to exercise the GSW Priority Offering Right in respect of such offering and (b) subject to the GSW Priority Offering Right, (i) the number of Registrable Securities to be sold by SACEF in respect of such offering will not be reduced and will take priority and (ii) the number of Registrable Securities proposed to be offered in respect of the Founder Investors (through a Founder Investor Put Financing Issuance) will not be reduced and will take priority.
Each Significant Shareholder’s and Founder Investor’s registration rights pursuant to the Registration Rights, Coordination and Put Option Agreement will not be transferrable to any third party, except (a) that GSW’s registration rights in respect of its Class C Ordinary Share will transfer to a third party which acquires Class C Ordinary Share from GSW provided such third party agrees to comply with the obligations applicable to GSW under the Registration Rights, Coordination and Put Option Agreement as if such third party were a party thereto, and provided further that such third party will only be subject to the coordination obligations thereunder if such third party acquires Class C Ordinary Share representing an Effective Economic Interest of at least 5%. GSW’s registration rights are also transferable to third-parties that acquire Class A Ordinary Shares from GSW pursuant to its lock-up transfer right, (b) that the Founder Investors’ registration rights may be transferred to certain third parties in connection with the exercise of the Founder Investors’ put option and swap rights under the Registration Rights, Coordination and Put Option Agreement and (c) to their affiliates.
Coordination
Other than (a) SACEF, (b) for so long as it is not an affiliate of the Company, MKC Investments (as assignee of RMG Sponsor II), and (c) GSW, but only to the extent a transfer of ReNew Global Shares by GSW is (i) necessary to enable GSW to reduce (x) the GSW Total Equity Interest to 33% and/or (y) the aggregate number of Class A Ordinary Shares then held by GSW or any of its affiliates does not exceed 4.9% of the aggregate number of issued and outstanding Class A Ordinary Shares, Class B Ordinary Shares and Class D Ordinary Shares or (ii) pursuant to an exception to its post-Closing lock-up, each Significant Shareholder will agree to use its commercially reasonable efforts to coordinate all sales and/or transfers of ReNew Global Shares pursuant to (A) registered underwritten offerings of Registrable Securities, except for underwritten block trades conducted during the two year period following Closing, and (B) any registered non-underwritten offering and sales pursuant to Rule 144 under the Securities Act until the earlier of (x) the date falling two (2) years after the Closing or (y) in respect of any particular Significant Shareholder, the date on which it holds an Effective Economic Interest less than or equal to 25% of the Effective Economic Interest it held immediately following the Closing.
No later than ten (10) days prior to the commencement of each calendar quarter following the date that is 180 days following the Closing, each Significant Shareholder (other than SACEF) shall provide the other Significant Shareholders with a written notice of its intention to sell any ReNew Global Shares during such calendar quarter (provided that the first notice shall be provided no later than ten (10) days after the date that is 180 days following the Closing and shall apply for that calendar quarter). Such notice shall facilitate all Significant Shareholders (other than SACEF) electing to transfer ReNew Global Shares to coordinate the timing and process for such transfers in an orderly manner. Each Significant Shareholder receiving such notice shall be entitled to effect a transfer of such number of its ReNew Global Shares during the relevant calendar quarter on a pro rata basis to the aggregate number of ReNew Global Shares proposed to be transferred by the other Significant Shareholders during that calendar quarter. Furthermore, any transfer of ReNew Global Shares by a Significant Shareholder (other than SACEF) or any issuance of ReNew Global Shares by ReNew Global which would result in change of control of the Company will not be consummated unless the Company has purchased in full all ReNew India Ordinary Shares that the Founder Investors have elected to sell to the Company in connection with such change of control pursuant to the Founder Investors’ put rights described below.
Founder Investors’ Put Options
Under the Registration Rights, Coordination and Put Option Agreement, the Founder Investors are entitled to require or request (as applicable) that the Company purchase from such Founder Investor its ReNew India Ordinary Shares held by the Founder Investors or their affiliates, or the “Put Shares,” in the following manner:
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During the one (1) year period following the Closing Date, subject to paragraph (c) below the Founder Investors may only exercise the Founder Investors Ordinary Put Option if the proceeds of the sale are used by the Founder to repay, prepay or otherwise discharge outstanding indebtedness incurred by the Founder and secured by his ReNew India Ordinary Shares as at the Closing.
In addition, under the Registration Rights, Coordination and Put Option Agreement, to the extent the Founder Investors identify a third party, or an affiliate, willing to acquire any of the ReNew India Ordinary Shares held by them, the Company will agree to use its commercially reasonable efforts to facilitate an issuance of Class A Ordinary Shares to such third party, or affiliate, in exchange for the transfer of ReNew India Ordinary Shares by the Founder Investors to the Company.
Voting Agreement
Pursuant to the Business Combination Agreement, at the Closing, the Company, ReNew India, GSW, CPP Investments and the Founder Investors entered into a voting agreement, or the “Voting Agreement,” pursuant to which, among other things, GSW, CPP Investments and the Founder Investors have granted to the Company (or its representative or nominee) irrevocable proxies to exercise all voting rights in respect of their respective ReNew India Ordinary Shares that they continue to hold following the Closing at all general meetings of the shareholders of the Company, subject to certain conditions, including that (i) the Company will vote such ReNew India Ordinary Shares in the same manner it votes the ReNew India Ordinary Shares that it owns, and (ii) the Company will not vote in favour of certain matters that would materially and adversely affect certain rights of GSW relating to its ReNew India Ordinary Shares without its consent; and (iii) the Company will not vote in favour of matters that would materially adversely and disproportionately affect the Economic Interests of the Founder Investors, GSW and CPP Investments, as compared to the Economic Interests of other shareholders of the Company, or certain rights of the Founder Investors and CPP Investments relating to their ReNew India Ordinary Shares, as compared to the other shareholders of ReNew, in each case, without the prior written consent of the Founder Investors.
Employment Agreements
See section titled “Compensation — Sumant Sinha Employment Agreement” and “Compensation — Employment Agreement of Executive Officers other than Sumant Sinha” under Item 6.B for a description of the employment agreements with our executive officers.
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Equity-Based Compensation Plans
See section titled “Compensation — Equity Compensation” under Item 6.B for a description of the equity incentive plans.
ReNew Foundation
The Company set up the ReNew Foundation, which is a non-profit organization under Indian laws, to further its corporate social responsibility initiatives. Mr. Sumant Sinha and Ms. Vaishali Sinha are the directors of ReNew Foundation. ReNew Foundation is a philanthropic arm of the Company working towards creating sustainable communities through its initiatives around energy access in rural and semi-urban rural areas. Further, ReNew Foundation is involved in conducting a wide mix of thought-leadership events in the form of expert lecture sessions and roundtables for discussing various challenges and opportunities under the broad spectrum of sustainability, environment and social responsibility, as well as feeding those discussions into recommendations for various stakeholders.
Not applicable.
ITEM 8. FINANCIAL INFORMATION.
See section titled “Financial Statements” under Item 18 for a list of the financial statements filed as part of this Report.
Legal Proceedings
Except as disclosed below, we and our subsidiaries are not currently subject to any material regulatory, legal, tax or arbitration proceedings nor are we aware of any such proceedings that are pending or threatened. We are also party to other litigations, proceedings and potential liabilities with OEMs, customers, contractors, and suppliers, including matters relating to payment disputes, right of way issues and disputes over land that arise in the ordinary course of our business in India.
Although there can be no assurances regarding the outcome of any of the matters noted below, including those arising in the normal course of business in India, we do not expect any of these, individually or collectively, will have or have had a material adverse impact on our financial position, results of operations or cash flows.
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The Karnataka High Court, in its interim orders dated July 18, 2019 and September 18, 2020, ordered the Karnataka Electricity Supply Companies (KESCOMs) to refrain from taking any precipitative action against captive users. Thereafter, KERC disposed of the Karnataka Petitions based on the principles laid down by APTEL in its judgment dated June 7, 2021 in the case of Tamil Nadu Power Producers Association vs. Tamil Nadu Electricity Regulatory Commission and others. KERC declared that the ReNew Wind Energy (Karnataka) Private Limited and ReNew Wind Energy (AP) Private Limited plants maintained their compliance as a captive generating plant for FY 2017-18, except for FY 2013-14 and FY 2015-16.
On October 9, 2023, the Supreme Court notified its judgment in Civil Appeal Nos. 8527-8529 of 2009 in the matter of M/s Dakshin Gujarat Vij Company Limited, upholding the test of proportionality on a Special Purpose Vehicle (SPV), which was otherwise exempted, and reversing the judgment in the case of Tamil Nadu Power Producers Association vs. Tamil Nadu Electricity Regulatory Commission and others.
In December 2023, the KESCOMs challenged the KERC order before APTEL, which is pending final adjudication.
The Company has filed a Writ Petition before the Karnataka High Court challenging the levy of Cross subsidy surcharge, since the levy was intended to be a temporary provision and were supposed to be reduced progressively in subsequent years. The Company believes that since there was no levy of cross-subsidy surcharge since FY 2009-2012, it cannot be re-introduced as per the intent of the Electricity Act, 2003. A favourable disposal of this writ shall mitigate the overall adverse impact of the Supreme Court judgment on our captive energy projects. Based on an internal evaluation, the Company believes that there are merits in its position and the demand raised by the distribution companies would be ultimately rescinded and hence no adjustment has been made in the consolidated financial statements.
AP DISCOMs filed a petition against the Company, RVUPL, OAPL and other wind developers before APERC, requesting it to pass on the generation-based incentive (“GBI”) benefits received by the developers to AP DISCOMs. Ostro Andhra Wind Private Limited (“OAWPL”) and Ostro AP Wind Private Limited (“OAPWPL”), the Company’s subsidiaries, became parties to this matter subsequently.
APERC in its order dated July 28, 2018 (“APERC Order”), allowed this petition and permitted the AP DISCOMs to deduct the GBI benefits and only pay the balance tariff payable to the wind power generators from February 14, 2017 until such GBI benefits were credited against the tariff payable in full. Subsequently, the Company filed a writ petition before the AP HC challenging the APERC Order. The AP HC, by its interim order dated August 24, 2018, suspended the operation of the APERC Order. Subsequently, Green Infra Wind Solutions Limited (unrelated to the Company) filed an appeal before APTEL against the AP DISCOMs challenging the APERC Order and impleaded the Company, RVUPL, OAPL and other wind developers.
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APTEL, in its order dated October 5, 2018 granted an interim stay on the APERC Order, which is continuing. Thereafter, the Company filed an interim application on November 4, 2019 in the writ petition before the AP HC for directions to the AP DISCOMs to comply with order dated August 24, 2018 of the AP HC and release payment of GBI benefits to the Company. Both the writ petition and the appeal are pending. The cumulative amounts receivable recorded in trade receivables related to this matter amount to Rs. 4,598 million as of March 31, 2024. On the basis of its evaluation and practices followed consistently in other states, the Company believes the GBI benefit is over and above the applicable tariffs and APERC does not have jurisdiction to interfere with the intent of the GBI Scheme. Therefore, the outstanding amount is recoverable and continues to be recognised in the consolidated financial statements.
Based on MEDA’s Report, MERC initiated suo -moto proceedings in Case No. 108 of 2019 (“2nd Petition”). By its order dated July 10, 2019, MERC permitted MSEDCL to file a fresh Petition based on MEDA’s report. Thereafter, MSEDCL filed Case No. 338 of 2019 before MERC (“3rd Petition”). WIPPA (Wind Independent Power Producers Association) challenged the public hearing in the 3rdPetition before APTEL via OP No. 11 of 2021. By an interim order dated July 19, 2021, APTEL was of the prima facie view that the petition may be barred by res judicata. During the pendency of the OP No. 11 of 2021, MSEDCL withdrew its petition. APTEL, passed its final order in OP No. 11 of 2021 and directed MERC to decide MSEDCL’s withdrawal and if the need arises to decide the maintainability of the 3rd petition thereafter. On February 13,2023, MERC permitted MSEDCL to withdraw the 3rd Petition and allowed MSEDCL to file the new petition subject to the petition being maintainable. Accordingly, petition number 114 of 2023 was filed by MSEDCL (“4thPetition”). MERC has heard the arguments on maintainability of the 4thPetition and reserved its order. Any changes to the wind zone classification could affect the tariff charged by the Company to its customers which is not determinable until the matter is concluded, however, currently the matter is only pending before MERC on the issue of maintainability and the petition cannot be decided on merits until the maintainability is decided in their favour.
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Some of the affected subsidiaries have issued notices under their respective power purchase agreements, seeking additional compensation on account of increase in expenditure for setting up the solar power project due to change in law event, namely, the amendment of the Project Import Regulations, 1986 and the Finance Act, 2023. Therefore, the Company does not expect this matter to have a material impact on its financial position, results of operations or cash flows.
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Thereafter, the Company, along with ReNew Wind AP2, filed a petition against the CTUIL before the CERC, to set aside the transmission charges bills approximating to Rs.980 million raised by CTUIL for the LTA associated with the 100MW wind power project, on account of force majeure and termination of the 100MW PPA, and seeking a declaration that they stand discharged from their obligations under the associated agreements for the LTA executed with CTUIL. By an interim order dated January 24, 2023, the CERC has directed CTUIL not to take any coercive action subject to payment of 10% of the total Transmission Charged levied. Thereafter, ReNew Wind AP2 paid Rs.94 million towards these charges which is recorded in the consolidated financial statements of the Company. The Company, along with ReNew Wind AP2 will continue to pay the monthly transmission charges to CTUIL as per the terms of the invoices being raised by CTUIL and as directed by the CERC. The petition before the CERC is currently pending
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Matters pertaining to recovery of additional expenditure on account of change in law.
In addition to the matters listed below, the Company and its subsidiaries are also party to other matters on similar subject-matter which the Company does not consider individually to have a significant material impact on it. However, collectively these matters may have a material impact on the Company.
Adyah had entered into six PPAs (four with BESCOM and one each with HESCOM and GESCOM), in relation to the development of six solar power projects of 50 MW each in the Pavagada Solar Park, Karnataka. Subsequently, by notification dated July 30, 2018, (“2018 Notification”), Government of India levied safeguard duty at specified rates on the import of solar cells and modules. Consequently, Adyah filed six petitions (in respect of each of the projects) before the KERC seeking a declaration that implementation of the 2018 Notification constitutes an event of ‘change in law’ under the PPAs entitling it to compensation for increase in the expenditure on account of such change in law. By orders dated June 15, 2021, the petitions were partly allowed, and certain directions were passed including payment of certain incremental tariffs to Adyah on the quantum of energy equivalent to the minimum capacity utilization factor under the PPAs, supplied from the date of commissioning of the project until the expiry of the PPA. As on March 31, 2024, Rs. 820 million remains collectible.
Adyah filed appeals before the APTEL against the order of KERC to the extent of denial of change in law relief claimed in relation to the additional DC capacity, carrying cost and computation of tariff on minimum capacity utilization factor corresponding to minimum energy generated (“Adyah Appeals”).
In February 2022, HESCOM also filed an appeal before APTEL against one of the orders dated June 15, 2021, challenging the quantum of incremental tariff awarded by KERC and seeking a reduction in quantum of such incremental tariff (“HESCOM Appeal”). Thereafter, Adyah filed petitions against BESCOM, GESCOM and HESCOM before the KERC seeking compliance with its orders dated June 15, 2021 (collectively referred to as “Compliance Petitions” and singularly as “Compliance Petition”). The KERC by its orders dated December 14, 2022, directed HESCOM, BESCOM and GESCOM to comply with its order. Subsequently, four appeals were filed by BESCOM against the order dated June 15, 2021 before APTEL (“BESCOM Appeals”). The Compliance Petitions filed by Adyah against BESCOM were disposed of by the KERC pursuant to its order dated March 7, 2023. On March 28, 2023, the Compliance Petition filed by Adyah against GESCOM was disposed of by the KERC pursuant to the payment by GESCOM. Lastly, by its Order dated April 19, 2023, the Compliance Petition filed by Adyah against HESCOM were disposed of by the KERC. All Compliance Petitions have been concluded. All the appeals from the order of KERC, Adyah Appeals, HESCOM Appeal and four BESCOM Appeals are pending before APTEL.
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B. Significant Changes
Except as disclosed elsewhere in this Report we have not experienced any significant changes since the date of the annual financial statements included in this Report.
ITEM 9. THE OFFER AND LISTING
Our Class A Ordinary Shares and Warrants are listed on the Nasdaq Stock Market LLC, or “Nasdaq”, under the trading symbols “RNW” and “RNWWW”, respectively.
Not applicable.
Class A Ordinary Shares and Warrants to purchase Class A Ordinary Shares are listed on Nasdaq under the symbols “RNW” and “RNWWW,” respectively.
Not applicable.
Not applicable.
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Not applicable.
ITEM 10. ADDITIONAL INFORMATION
Not applicable.
We are a public limited company incorporated under the laws of England and Wales (company number 13220321) and our affairs are governed by the ReNew Global Articles, the U.K. Companies Act and English law. We were incorporated as a private limited company in England and Wales on February 23, 2021 and re-registered as a public limited company in England and Wales on May 12, 2021.
Share Capital
As of March 31, 2024, 244,266,823 Class A Ordinary Shares par value $0.0001 per share, one Class B Ordinary Share par value $0.0001, 118,363,766 Class C Ordinary Shares par value $0.0001 per share, one Class D Ordinary Share par value $0.0001, one Deferred Share par value $0.01 and 50,000 Redeemable Preference Shares par value GBP1.00 per share, were issued and outstanding. The Company as of March 31, 2024 held 38,698,288 Class A Ordinary Shares par value $0.0001 per share as treasury shares.
One Class B Ordinary Share represents the number of votes from time to time equal to the number of Class A Ordinary Shares that would be issued to the Founder Investors and their affiliates if the Founder Investors and their affiliates had exchanged the ReNew India Ordinary Shares that they hold at such time for Class A Ordinary Shares at the exchange ratio of 1 to 0.8289 specified in the Business Combination Agreement (as defined herein) (as proportionally adjusted for any share dividends, share combinations or consolidations, share splits, bonus issues or merger, consolidation or other reorganization or recapitalization effected with respect to Company’s ordinary shares or ReNew India Ordinary Shares after the Closing). During the year ended March 31, 2024, the Company acquired 2,553,897 ReNew India Ordinary Shares from the Founder pursuant to the Founder’s partial exercise of the Founder Investor De-Minimis Put Option, as defined in Item 7.B hereof, as a result of which the voting rights attaching to the Class B Ordinary Share were reduced by 2,116,955 votes from 13,554,680 to 11,437,725 votes. As of March 31, 2024, the Class B Ordinary Shares accordingly represented 11,437,725 votes.
One Class D Ordinary Share represents the number of votes from time to time equal to the number of Class A Ordinary Shares that would have been issued to CPP Investments and its affiliates if CPP Investments and its affiliates had exchanged the ReNew India Ordinary Shares that they hold at such time for Class A Ordinary Shares at the exchange ratio of 1 to 0.8289 specified in the Business Combination Agreement (as defined herein) (as proportionally adjusted for any share dividends, share combinations or consolidations, share splits, bonus issues or merger, consolidation or other reorganization or recapitalization effected with respect to Company’s ordinary shares or ReNew India Ordinary Shares after the Closing). As at March 31, 2024, the Class D Ordinary Share accordingly represented 12,345,678 votes.
In accordance with the ReNew Global Articles, we can issue, in addition to the shares already in issue, further Class A Ordinary Shares and Class C Ordinary Shares, each having the rights and entitlements as described in the ReNew Global Articles.
Allotment of Shares and Pre-emption Rights
The U.K. Companies Act permits our directors to allot (or grant rights to subscribe for or to convert any security into) shares in the Company only with prior authorization granted by an ordinary resolution of our shareholders (being a resolution passed by a majority of the votes cast) or in the ReNew Global Articles. This authorization must state the aggregate nominal amount of shares that it covers, can be valid up to a maximum period of five years and can be varied, renewed or revoked by shareholders. An exception applies in respect of the allotment of shares in pursuance of an employees' share scheme (as defined in the U.K. Companies Act).
In addition, subject to certain limited exceptions, the U.K. Companies Act provides shareholders with pre-emption rights when new ordinary shares in the Company are allotted (or rights to subscribe for, or to convert securities into, such ordinary shares are granted, or such ordinary shares held as treasury shares are sold) wholly for cash. However, it is possible for these pre-emption rights to be disapplied by the ReNew Global Articles or a special resolution of shareholders (being a resolution passed by at least 75% of the votes cast). Such a disapplication of pre-emption rights cannot apply for longer than the duration of the authority to allot shares to which it relates.
Pursuant to a resolution approved by the shareholders of the company on August 20, 2021, the Board has authority to allot (or grant rights to subscribe) shares in the Company, in respect of which shareholders’ statutory pre-emption rights have been disapplied, for
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five-year period i.e. until August 20, 2026. This included an authority to grant awards under the 2021 Incentive Plan and the Non-Employee 2021 Incentive Plan in respect of an aggregate nominal value up to US$ 6,503.02 (equivalent to 65,030,200 Shares). At our 2023 annual general meeting held on September 12, 2023, our shareholders passed resolutions authorizing our directors for increasing the nominal value to which it applies by US$ 2,296.98 (equivalent to 22,969,800 Shares) to a revised limit of up to US$ 8,800.00 (equivalent to 88,000,000 Shares) and expires on the fifth anniversary of the date on which the resolution is passed to refresh this allotment authority to reflect the increase in the share limits under the Company’s incentive award i.e. until September 12, 2028.
We are only allowed to pay commissions or brokerage in connection with a subscription for share to the extent permitted by the U.K. Companies Act. Any such commission or brokerage may be satisfied by the payment of cash or by the allotment of fully or partly paid shares.
Subject to the U.K. Companies Act and the ReNew Global Articles, the ReNew Global Board may, with the authority of an ordinary resolution of shareholders, capitalise undistributed profits and reserves of the Company and apply them to pay up in full shares, debentures or other obligations of the Company to be allotted to shareholders in a bonus issue.
Voting Rights and Restrictions on Voting
Pursuant to the ReNew Global Articles, holders of Class A Ordinary Shares will vote together as a single class with the holders of the other voting shares in the capital of the Company on all matters submitted to the shareholders of ReNew Global for their vote or approval, other than with respect to matters that require a class vote. Class A Ordinary Shares will be issued with voting rights attached to them and each Class A Ordinary Share will have one vote on a poll.
The holder of the Class B Ordinary Share will vote as a single class with the holders of the other voting shares in the capital of the Company on all matters submitted to the shareholders of ReNew Global for their vote or approval, other than with respect to matters that require a class vote. The Class B Ordinary Share will be issued with voting rights attached to it and the Class B Ordinary Share shall entitle the holder of such share to a number of voting rights from time to time equal to the number of ReNew India Ordinary Shares, if any, held as of such time by such holder and its affiliates on an As-Converted Basis, multiplied by (ii) the exchange ratio under the Business Combination Agreement (as proportionally adjusted for any share dividends, share combinations or consolidations, share splits, bonus issues or merger, consolidation or other reorganization or recapitalization effected with respect to the Shares or the ReNew India Ordinary Shares after August 23, 2021).
The Class C Ordinary Share will be non-voting and will not be entitled to any votes on any matter that is submitted to the shareholders of ReNew Global for their vote or approval.
The holder of the Class D Ordinary Share will vote together as a single class with the holders of the other voting shares in the capital of the Company on all matters submitted to the shareholders of ReNew Global for their vote or approval, other than with respect to matters that require a class vote. The Class D Ordinary Share shall be issued with voting rights attached to it and the Class D Ordinary Share shall entitle the holder of such share to a number of voting rights from time to time equal to the number of ReNew India Ordinary Shares, if any, held as of such time by the holder and its affiliates on an As-Converted Basis, multiplied by (ii) the exchange ratio under the Business Combination Agreement (as proportionally adjusted for any share dividends, share combinations or consolidations, share splits, bonus issues or merger, consolidation or other reorganization or recapitalization effected with respect to the Shares or the ReNew India Ordinary Shares after August 23, 2021).
Dividends and Other Distributions
ReNew Global may by ordinary resolution of the shareholders declare dividends out of profits available for distribution in accordance with the respective rights of shareholders but no such dividend shall exceed the amount recommended by the directors. The ReNew Global Board may from time to time pay shareholders such interim dividends as appear to the Board to be justified by the profits available for distribution.
Subject to any rights attaching to or the terms of issue of any share, all dividends shall be declared and paid according to the amounts paid up in respect of nominal value on the ordinary shares; but no amount paid on a share in advance of the date on which a call is payable shall be treated as paid on the share. All dividends shall be apportioned and paid proportionately to the amounts so paid up on the shares during any portion or portions of the period in respect of which the dividend is paid; but, if any share is allotted or issued on terms providing that it shall rank for dividend as from a particular date, that share shall rank for dividend accordingly.
No dividend or other moneys payable by ReNew Global on or in respect of any share shall bear interest against it unless otherwise provided by the rights attached to the share. Any dividend unclaimed after a period of 12 years from the date such dividend became due for payment may, if the Board so resolves, be forfeited and cease to remain owing.
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Dividends may be declared or paid in any currency and the Board may decide the rate of exchange for any currency conversions that may be required in relation to the currency of any dividend.
Any general meeting declaring a dividend may by ordinary resolution of shareholders, upon the recommendation of the Board, direct payment or satisfaction of such dividend wholly or in part by the distribution of non-cash assets of equivalent value, including without limitation paid up shares or debentures of another body corporate.
The directors may, if authorised by an ordinary resolution of shareholders, offer any holders of ordinary shares the right to elect to receive in lieu of a dividend, or part of a dividend, an allotment of shares credited as fully paid up. The ReNew Global Articles stipulate certain terms and procedures for any such share dividend (or ‘scrip dividend’).
Each holder of Class A Ordinary Shares shall be entitled to receive distributions, whether in the form of dividends, return of capital on a winding up or any other means (the “Distributions”) in proportion to the number of Class A Ordinary Shares held by them and pro rata with all other ReNew Global Shares in the capital of ReNew Global which are entitled to Distributions (so that all such ReNew Global Shares which are entitled to receive such Distributions receive the same amount per ReNew Global Share, subject to any differences in such amount as a result of rights to receive Distributions attaching to the Class B Ordinary Share and the Class D Ordinary Share).
Each holder of Class C Ordinary Share shall be entitled to receive Distributions in proportion to the number of Class C Ordinary Share held by them and pro rata with all other ReNew Global Shares in the capital of ReNew Global which are entitled to Distributions (so that all such ReNew Global Shares which are entitled to receive such Distributions receive the same amount per ReNew Global Share, subject to any differences in such amount as a result of rights to receive Distributions attaching to the Class B Ordinary Share and the Class D Ordinary Share).
The holder of the Class B Ordinary Share shall be entitled to participate in Distributions of the Company only during the period from August 23, 2021 until August 23, 2024 on the basis that such holder is deemed to hold for the purposes of only, at the time of any Distribution, such number of Class A Ordinary Shares as is equal to the number of ReNew India Ordinary Shares held by such holder and its affiliates at the time of such Distribution multiplied by 0.8289 (as proportionately adjusted for any share dividends, share combinations or consolidations, share splits, bonus issues or merger, consolidation or other reorganization or recapitalization effected with respect to the Shares or the ReNew India Ordinary Shares after August 23, 2021) and shall receive the relevant amount of such Distribution. If the holder of the Class B Ordinary Share or any of its affiliates participate in any Distribution made by ReNew India in its or their capacity as a holder of ReNew India Ordinary Shares, or “ReNew India Distributions”, the amount of future Distributions made by ReNew Global to the holder of the Class B Ordinary Share shall be reduced, in aggregate, by such amount as equals the amount of any ReNew India Distributions made to such holder.
The holder of the Class D Ordinary Share shall be entitled to participate in dividends of the Company only during the period from August 23, 2021 until August 23, 2024 on the basis that such holder is deemed to hold for the purposes of only, at the time of any Distribution, such number of Class A Ordinary Shares as is equal to the number of ReNew India Ordinary Shares held by such holder and its affiliates at the time of such Distribution multiplied by 0.8289 (as proportionately adjusted for any share dividends, share combinations or consolidations, share splits, bonus issues or merger, consolidation or other reorganization or recapitalization effected with respect to the Shares or the ReNew India Ordinary Shares after August 20, 2023) and shall receive the relevant amount of such Distribution. If the holder of the Class D Ordinary Share or any of its affiliates participate in any ReNew India Distributions, the amount of future Distributions made by ReNew Global to the holder of the Class D Ordinary Share shall be reduced, in aggregate, by such amount as equals the amount of any ReNew India Distributions made to such holder. For the avoidance of doubt, over such three (3) year period no more and no less in Distributions and ReNew India Distributions shall be received in the aggregate by the holder of the Class D Ordinary Share than the amount of the Distributions that would have been made to such holder by the Company had such holder held, at the time of each Distribution, the number of Class A Ordinary Shares as is equal to the number of ReNew India Ordinary Shares held by such holder and its Affiliates at the time of such Distribution multiplied by 0.8289 (as proportionately adjusted for any share dividends, share combinations or consolidations, share splits, bonus issues or merger, consolidation or other reorganization or recapitalization effected with respect to the Shares or the ReNew India Ordinary Shares after August 23, 2021), and any differences shall be adjusted on an annual basis to the extent possible (and if not, the required adjustments shall be made to Distributions following the three (3) year period).
Transferability
Subject to the terms of the ReNew Global Articles, any shareholder holding shares in certificated form may transfer all or any of their shares by an instrument of transfer in any usual form or any other form approved by the Board. Any written instrument of transfer shall be signed by or on behalf of the transferor and (in the case of a partly paid share) the transferee.
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In the case of uncertificated shares, the directors may take such action as they consider appropriate to achieve a transfer. The Uncertificated Securities Regulations 2001 permit shares to be issued and held in uncertificated form and transferred by means of a computer-based system.
The Board may decline to register any transfer of any share:
If the Board declines to register a transfer, it must return to the transferor the instrument of transfer together with notice of the refusal, unless the Board suspects that the proposed transfer may be fraudulent.
Pursuant to the ReNew Global Articles, the Class B Ordinary Share will not be transferable by the holder thereof to any person other than the Founder’s affiliates and the Class D Ordinary Share will not be transferable by the holder thereof to any person other than CPP Investments’ affiliates.
Redemption and Cancellation; Conversion and Re-designation
Pursuant to the ReNew Global Articles, subject to applicable law, ReNew Global may, in its sole discretion, redeem and cancel the Class B Ordinary Share for nominal value at any time after the Founder Investors and their respective affiliates cease to hold any ReNew India Ordinary Shares. The Class D Ordinary Share must be redeemed and cancelled by ReNew Global for nominal value as soon as reasonably practicable following the transfer and contribution to ReNew Global of all of the ReNew India Ordinary Shares that continue to be held by CPP Investments and its affiliates following the Closing in exchange for Class A Ordinary Shares pursuant to the terms of the Business Combination Agreement.
Pursuant to the ReNew Global Articles, each Class C Ordinary Share will be automatically re- designated as one Class A Ordinary Share in the hands of a transferee (other than where such transferee is an affiliate within the meaning of the U.S. Bank Holding Company Act of 1956, as amended, of the transferring holder) upon the transfer of such Class C Ordinary Share (including a transfer of depositary receipts or Identified Rights (as defined in the ReNew Global Articles) in respect of such Class C Ordinary Share) to such transferee, if such transfer is made: (i) pursuant to a widespread public distribution, within the meaning of the U.S. Bank Holding Company Act of 1956, as amended; (ii) to ReNew Global; (iii) in transfers in which no transferee (or group of associated transferees within the meaning of the U.S. Bank Holding Company Act of 1956, as amended, of the transferring holder) receives equal to or more than 2% of the issued and outstanding Class A Ordinary Shares (including depositary receipts or Identified Rights (as defined in the ReNew Global Articles) in respect of such Class A Ordinary Shares) or a class of voting shares of ReNew Global (including depositary receipts or Identified Rights (as defined in the ReNew Global Articles) in respect of such voting shares) representing 2% of the voting power attached to such class of voting shares; or (iv) to a transferee that controls more than 50% of the issued and outstanding Class A Ordinary Shares (including depositary receipts or Identified Rights (as defined in the ReNew Global Articles) in respect of such Class A Ordinary Shares) and more than 50% of the issued and outstanding shares (including depositary receipts or Identified Rights (as defined in the ReNew Global Articles) in respect of such shares) of each other class of voting shares of ReNew Global (without including any Class C Ordinary Share or depositary receipts or Identified Rights (as defined in the ReNew Global Articles) in respect of such Class C Ordinary Share transferred to such transferee).
Liquidation
If ReNew Global is in liquidation, the liquidator may, if authorised by a special resolution of shareholders and any other authority required at law, divide among shareholders (excluding holders of treasury shares) in specie the whole or any part of its assets (and the liquidator may for that purpose value any assets and determine how the division shall be carried out as between the shareholders or different classes of shareholders), or vest the whole or any part of such assets in trustees for the benefit of the shareholders and determine the scope and terms of those trusts, but no shareholder shall be compelled to accept any asset on which there is a liability.
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Variation of rights
All or any of the rights and privileges attached to any class of shares issued may be varied or abrogated only with the consent in writing of the holders of not less than three-fourths in nominal value of the issued shares of that class (excluding any shares held as treasury shares) or by special resolution passed at a separate general meeting of the holders of such shares, subject to the other provisions of the U.K. Companies Act and the terms of such shares’ issue. The U.K. Companies Act also provides a right to object to the variation of the share capital by the shareholders who did not vote in favour of the variation. Should 15% or more of the shareholders of the issued shares in question apply to the court to have the variation cancelled, the variation shall have no effect unless and until it is confirmed by the court. In addition to other variations, the ReNew Global Articles deem the rights attached to a class of shares to be varied by certain reductions of the capital paid up on that class of shares and by the allotment of any share with prior dividend rights or more favourable voting rights.
Alteration to share capital
ReNew Global may, by ordinary resolution of shareholders, consolidate all or any of its share capital into shares of larger amount per share than its existing shares, or sub-divide its shares or any of them into shares of a smaller amount. ReNew Global may, by special resolution of shareholders, confirmed by the court, reduce its share capital or any capital redemption reserve or any share premium account in any manner authorised by the U.K. Companies Act. ReNew Global may redeem or purchase all or any of its shares, subject to the requirements as set out in the U.K. Companies Act.
Other U.K. law considerations
Mandatory purchases and acquisitions
Pursuant to the U.K. Companies Act , where a takeover offer has been made for ReNew Global and the offeror has acquired or unconditionally contracted to acquire not less than 90% in value of the shares to which the offer relates and not less than 90% of the voting rights carried by those shares, the offeror may give notice to the holder of any shares to which the offer relates which the offeror has not acquired or unconditionally contracted to acquire that such offeror wishes to acquire, and is entitled to so acquire, those shares on the same terms as the general offer. The offeror would do so by sending a notice to the outstanding minority shareholders telling them that it will compulsorily acquire their shares. Such notice must be sent within three months of the last day on which the offer could be accepted in the prescribed manner. The squeeze-out of the minority shareholders can be completed at the end of six weeks from the date the notice has been given (subject to any court order previously made on the application of minority shareholders), when the offeror can execute a transfer of the outstanding shares in its favour and pay the consideration to ReNew Global, which it would hold in trust for the relevant minority shareholders. The consideration offered to the outstanding minority shareholders whose shares are compulsorily acquired under the U.K. Companies Act must, in general, be the same as the consideration that was available under the takeover offer.
Sell out
The U.K. Companies Act also gives ReNew Global’s minority shareholders a right to be bought out in certain circumstances by an offeror who has made a takeover offer for all of its shares. A holder of shares to which the offer relates, and who has not otherwise accepted the offer, may require the offeror to acquire his shares if, prior to the expiry of the acceptance period for such offer, the offeror has acquired or unconditionally agreed to acquire (i) not less than 90% in value of the voting shares, and (ii) not less than 90% of the voting rights carried by those shares. Minority shareholders will have not less than three months to exercise this right. If a shareholder exercises a right to be bought out, the offeror is required to acquire such shareholder’s shares on the terms of the general takeover offer or on such other terms as may be agreed.
Disclosure of interest in shares
Pursuant to the U.K. Companies Act, ReNew Global is empowered to give notice in writing to any person whom it knows or have reasonable cause to believe to be interested in its shares, or to have been so interested at any time during the three years immediately preceding the date on which the notice is issued, requiring such person, within a reasonable time, to disclose to ReNew Global particulars of that person’s interest and (so far as is within its knowledge) particulars of any other interest that subsists or subsisted in those three years in those shares.
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Pursuant to the ReNew Global Articles, if a person defaults in supplying ReNew Global with the required particulars in relation to the shares in question, or “default shares”, within the prescribed period, the directors may by notice direct that:
Purchase of own shares
Under the laws of England and Wales, a public limited company may only purchase its own shares out of the distributable reserves of the company or the proceeds of a fresh issue of shares made for the purpose of financing the purchase, subject to complying with procedural requirements under the Companies Act and provided that it is not restricted from doing so by its articles of association. A limited company may not purchase its own shares if, as a result of the purchase, there would no longer be any issued shares of the company other than redeemable shares or shares held as treasury shares. Shares must be fully paid to be repurchased.
Since Nasdaq is not a relevant market for the purpose of “market purchases” under the Companies Act, ReNew can currently only purchase its own shares through an “off-market purchase” as defined in the Companies Act. Any such purchase must be made pursuant to a purchase contract authorised in advance by ordinary resolution of ReNew’s shareholders. Any authority will not be effective if any shareholder from whom ReNew Global proposes to purchase shares votes on the resolution and the resolution would not have been passed if he had not done so. The resolution authorizing the purchase must specify a date, no later than five years after the passing of the resolution, on which the authority to purchase is to expire.
A buy-back by a company of its shares will give rise to U.K. stamp duty reserve tax or stamp duty at the rate of 0.5% of the amount or value of the consideration payable by the company (rounded up to the next £5.00), and such stamp duty reserve tax or stamp duty will be paid by the company.
At a general meeting held on August 20, 2021, our shareholders approved the forms of share repurchase contracts and counterparties with whom such contracts may be entered into for the purpose of making repurchases of our Class A Ordinary Shares. These approvals are valid for five years. We have entered into agreements with Credit Suisse Securities (USA) LLC and Mizuho Securities USA LLC, as our brokers (the “Brokers”) for the purchase, on a principal basis, of Class A Ordinary Shares, for subsequent sale and delivery to the Company.
As of March 31, 2024, we held 38,698,288 Class A Ordinary Shares in our treasury account, which were purchased in exchange for an aggregate consideration of US$ 238,538,364 (including fee and charges paid to the bankers).
Distributions and dividends
Under the U.K. Companies Act, before a company can lawfully make a distribution or dividend, it must ensure that it has sufficient distributable reserves (on a non -consolidated basis). The basic rule is that a company’s profits available for the purpose of making a distribution are its accumulated, realised profits, so far as not previously utilised by distribution or capitalization, less its accumulated, realised losses, so far as not previously written off in a reduction or reorganization of capital duly made. The requirement to have sufficient distributable reserves before a distribution or dividend can be paid applies to ReNew Global and to each of its subsidiaries that has been incorporated under English law.
In addition, we, as a public limited company, can only make a distribution:
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Compromises and arrangements
Under the U.K. Companies Act, if ReNew Global proposes a compromise or arrangement (a ‘scheme of arrangement’) between ReNew Global and its creditors or its shareholders or a class of either of them (as applicable), the High Court of Justice in England and Wales may order a meeting of the creditors or class of creditors or of its shareholders or class of shareholders (as applicable) to be called in such a manner as the court directs. Any compromise or arrangement approved by a majority in number present and voting at the meeting representing 75% or more in value of the creditors or 75% or more of the voting rights of shareholders or class of either of them (as applicable) if sanctioned by the court, is binding upon ReNew Global and all the creditors, shareholders or members of the specific class of either of them (as applicable).
Whether the capital of the Company is to be treated as being divided into a single or multiple class(es) of shares is a matter to be determined by the court. The court may in its discretion treat a single class of shares as multiple classes, or multiple classes of shares as a single class, for the purposes of the shareholder approval referred to above taking into account all relevant circumstances, which may include circumstances other than the rights attaching to the shares themselves.
In addition, the U.K. Companies Act provides for restructuring plans, which may be used by a company only for the purpose of reducing or mitigating the effects of financial difficulties it is encountering that may affect its ability to carry on business as a going concern. These plans are similar to schemes of arrangement, but: the only shareholder or creditor approval required is that of shareholders or creditors representing 75% in value of the capital held by, or debt owed to, the members present and voting of one class of shareholders or creditors that would have a genuine economic interest in the company if the plan were not approved; and if that approval is obtained, members of any other class of shareholders or creditors will be bound by the restructuring plan if they will not as a result be worse off than if the plan were not approved and the court grants its approval.
City code on takeovers and mergers
The U.K. City Code on Takeovers and Mergers, or the “Takeover Code,” applies, among other things, to an offer for a public limited company the registered office of which is in the United Kingdom and which is considered by the Panel on Takeovers and Mergers, or the “Takeover Panel,” to have its place of central management and control in the United Kingdom, the Channel Islands or the Isle of Man, in each case, a “Code Company.” This is known as the “residency test.” Under the Takeover Code, the Takeover Panel will determine whether ReNew Global has its place of central management and control in the United Kingdom, the Channel Islands or the Isle of Man by looking, in the first instance, at whether a majority of the directors on ReNew Global’s Board are resident in the United Kingdom, the Channel Islands and the Isle of Man. If a majority of the directors are so resident, then the “residency test” will normally be satisfied.
If at the time of a takeover offer, the Takeover Panel determines that the residency test is satisfied, ReNew Global would be subject to several rules and restrictions, including but not limited to the following: (i) its ability to enter into deal protection arrangements with a bidder would be extremely limited; (ii) ReNew Global would not, without the approval of its shareholders, be able to perform certain actions that could have the effect of frustrating an offer, such as issuing shares or carrying out acquisitions or disposals; and (iii) ReNew Global would be obliged to provide equality of information to all bona fide competing bidders. The Takeover Code also contains certain rules in respect of mandatory offers for Code Companies. Under the Takeover Code, if a person:
As at the date of this Report, ReNew Global has a majority of its Board resident outside of the United Kingdom, the Channel Islands and the Isle of Man. Therefore, for the purposes of the Takeover Code, ReNew Global believes that the residency test is not met. Therefore, the Takeover Code should not apply to us. It is possible that in the future changes in the Board’s composition, changes in the Takeover Panel’s interpretation of the Takeover Code, or other events may cause the Takeover Code to apply to us.
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Exchange controls
There are no governmental laws, decrees, regulations or other legislation in the United Kingdom that may affect the import or export of capital, including the availability of cash and cash equivalents for use by ReNew Global, or that may affect the remittance of dividends, interest, or other payments by ReNew Global to non-resident holders of its ordinary shares, other than withholding tax requirements. There is no limitation imposed by English law or in ReNew Global’s Articles on the right of non-residents to hold or vote shares. Any distribution of funds from ReNew India to ReNew Global in any form or manner is subject to applicable Indian exchange control regulations, including the Foreign Exchange Management Act, 1999.
Warrants
Upon the Closing, each outstanding RMG II warrant automatically became a Warrant of the Company and represented the right to purchase 1.0917589 Class A Ordinary Shares in lieu of one share of RMG II Class A Common Stock at a price of $11.50 per share, subject to adjustments as described below. The Warrants are governed by the Amended and Restated Warrant Agreement, entered into by us and Computershare, as warrant agent.
Public Warrants
The following description applies to Public Warrants.
The Amended and Restated Warrant Agreement requires ReNew Global to use commercially reasonable efforts to maintain the effectiveness of a registration statement registering the Class A Ordinary Shares issuable upon the exercise of the Warrants until the expiration of the Warrants. ReNew Global shall use its commercially reasonable efforts to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration or redemption of the Warrants. Notwithstanding the foregoing, if a registration statement covering the Class A Ordinary Shares issuable upon exercise of such warrants is not effective, holders of Warrants may, until such time as there is an effective registration statement and during any period when ReNew Global has failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. In such event, each holder would pay the exercise price by surrendering the Warrants for that number of Class A Ordinary Shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of Class A Ordinary Shares underlying the Warrants held by the holder, multiplied by the excess of the “fair market value” (defined below) less the exercise price of such warrants by (y) the fair market value and (B) 0.394, and, in either case, by paying (or giving an undertaking to pay) the nominal value (being $0.0001 per ReNew Global Ordinary Share). The “fair market value” for this purpose will mean the volume weighted average price of Class A Ordinary Shares as reported during the ten (10) trading day period ending on the trading day prior to the date notice of exercise is received.
ReNew Global will not be obligated to deliver any Class A Ordinary Shares pursuant to the exercise of a Warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A Ordinary Shares underlying the Warrants is then effective and a prospectus relating thereto is current, subject to ReNew Global satisfying its obligations described below with respect to registration. No Warrant will be exercisable and ReNew Global will not be obligated to issue Class A Ordinary Shares as a result of the exercise of a Warrant unless the Class A Ordinary Shares issuable upon such warrant exercise have been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of such warrants.
Notwithstanding the above, if Class A Ordinary Shares are at the time of any exercise of a Warrant not listed on a U.S. national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, ReNew Global may, at its option, require holders of Warrants who exercise such warrants to do so on a “cashless basis” and, in the event ReNew Global so elects, it will not be required to file or maintain in effect a registration statement, but it will be required to use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The exercise price and number of Class A Ordinary Shares issuable on exercise of the Warrants will be adjusted in certain circumstances and subject to certain exceptions described in the Amended and Restated Warrant Agreement, including in the event of a share dividend, extraordinary dividend or ReNew Global’s recapitalization, reorganization, merger or consolidation.
No fractional shares will be issued upon exercise of the Warrants. If, upon exercise of the Warrants, a holder would be entitled to receive a fractional interest in a share, ReNew Global will, upon exercise, round down to the nearest whole number of Class A Ordinary Shares to be issued to the holder.
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Once the Warrants become exercisable, ReNew Global may call such warrants for redemption if, and only if, the reported last sale price of the Class A Ordinary Shares equals or exceeds $18.00 per share (as adjusted for splits, dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before ReNew Global sends the notice of redemption to the holders of Warrants. In addition, ReNew Global may only call such Warrants for redemption:
If and when the Warrants become redeemable, ReNew Global may not exercise its redemption right if the issuance of Class A Ordinary Shares upon exercise of the Warrants is not exempt from registration or qualification under applicable state blue sky laws or ReNew Global is unable to effect such registration or qualification.
If ReNew Global calls the Warrants for redemption as described above, it will have the option to require any holder that wishes to exercise its Warrant prior to such redemption to do so on a “cashless basis.” If ReNew Global takes advantage of this option, the notice of redemption will contain the information necessary to calculate the number of Class A Ordinary Shares to be received upon exercise of the Warrants, including the “fair market value” in such case.
A holder of a Warrant may notify ReNew Global in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such Warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 9.8% (or such other amount as a holder may specify) of the Class A Ordinary Shares outstanding immediately after giving effect to such exercise.
The Amended and Restated Warrant Agreement provides that the terms of the Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding Warrants in respect of Public Warrants to make any change that adversely affects the interests of the registered holders of Public Warrants.
The Warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to ReNew Global, for the number of Warrants being exercised. The warrant holders do not have the rights or privileges of holders of Class A Ordinary Shares or any voting rights until they exercise their Warrants and receive Class A Ordinary Shares.
The Amended and Restated Warrant Agreement provides that, subject to applicable law, any action, proceeding or claim against ReNew Global arising out of or relating in any way to the Amended and Restated Warrant Agreement will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and ReNew Global irrevocably submits to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. See section titled “Risk Factors — Our ReNew Global Articles provide that the courts of England and Wales will be the exclusive forum for the resolution of all shareholder complaints other than complaints asserting a cause of action arising under the Securities Act or the Exchange Act, and that the United States District Court for the Southern District of New York will be the exclusive forum for the resolution of any shareholder complaint asserting a cause of action arising under the Securities Act or the Exchange Act.” under Item 3.D.
We have not entered into any material contracts other than as disclosed below and in the section titled “Related Party Transactions” under Item 7.B.
Description of Renew India’s Material Indebtedness
The following is a summary of certain information with respect to ReNew India’s material indebtedness. Unless the context otherwise requires, all references in this section to “we,” “us,” or “our” refer to ReNew India.
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Fund Based Facilities
S. No. |
SPV |
Project |
Details |
1. |
ReNew Surya Ravi Private Limited (RSRPL) |
Merchant Phase1 |
RSRPL has entered into a term loan facility of Rs. 5,800,000,000 from Power Finance Corporation Ltd. through the Finance Agreement dated March 29, 2022. Facility carries monthly interest payment and has a tenor of 20 years. Facility is secured by following security: |
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• Mortgage of immovable properties, |
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• Hypothecation of all plant & machinery and other immovable properties, |
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• Charge over all bank accounts, project cash flows, debtors and other assets, |
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• Assignment of all project contracts, project approvals and rights, |
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• Pledge of 51% shares of the SPV, |
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• Debt Service Reserve Account (“DSRA”) equivalent to one quarter debt servicing obligations. |
2. |
ReNew Surya Ravi Private Limited (RSRPL) |
Merchant Phase 2 |
RSRPL has entered into a term loan facility of Rs. 5,600,000,000 from Power Finance Corporation Ltd. through the Finance Agreement dated March 25, 2023. Facility carries monthly interest payment and has a tenor of 20 years. Facility is secured by following security: |
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• Mortgage of immovable properties, |
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• Hypothecation of all plant & machinery and other immovable properties, |
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• Charge over all bank accounts, project cash flows, debtors and other assets, |
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• Assignment of all project contracts, project approvals and rights, |
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• Pledge of 51% shares of the SPV, |
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• DSRA equivalent to one quarter debt servicing obligations. |
3. |
Ostro Kannada Power Private Limited (OKPPL) |
SECI-6 300.3 MW Wind |
OKPPL has entered into a term loan facility of Rs. 17,250,000,000 from Power Finance Corporation Ltd. through the Finance Agreement dated March 25, 2023. Facility carries monthly interest payment and has a tenor of 20 years. Facility is secured by following security: |
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• Mortgage of immovable properties, |
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• Hypothecation of all plant & machinery and other immovable properties, |
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• Charge over all bank accounts, project cash flows, debtors and other assets, |
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• Assignment of all project contracts, project approvals and rights, |
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• Pledge of 51% shares of the SPV, |
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• DSRA equivalent to one quarter debt servicing obligations. |
4. |
ReNew Vayu Urja Private Limited (RVUPL) |
AP (KCT) & Maharashtra (Kawaldhara) |
RVUPL has entered into a term loan facility of Rs. 10,230,000,000 from Power Finance Corporation Ltd. through the Finance Agreement dated July 28, 2020. Facility carries monthly interest payment and has a tenor of 18 years. Facility is secured by following security: |
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• Mortgage of immovable properties, |
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• Hypothecation of all plant & machinery and other immovable properties, |
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• Charge over all bank accounts, project cash flows, debtors and other assets, |
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• Assignment of all project contracts, project approvals and rights, |
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• Pledge of 100% shares of the SPV, |
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• DSRA equivalent to two quarter debt servicing obligations. |
149
5. |
ReNew Sun Bright Private Limited |
MSEDCL-2 |
RSBPL has entered into a term loan facility of Rs. 2,120,000,000 from Aseem Infrastructure Finance Limited through the Finance Agreement dated September 19, 2022 and an ECB facility of US$106 Mn from US Development Finance Corporation (DFC) through the Finance Agreement dated July 15, 2021. AIFL carries monthly Interest payments and DFC carries half-yearly interest payment cycle. Facilities is secured by following security: |
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• Mortgage of immovable properties, |
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• Hypothecation of all plant & machinery and other immovable properties, |
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• Charge over all bank accounts, project cash flows, debtors and other assets, |
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• Assignment of all project contracts, project approvals and rights, |
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• Pledge of 100% shares of the SPV, |
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• DSRA equivalent to two quarter debt servicing obligations, |
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• Liquidity Reserve equivalent to two quarters of debt servicing obligations. |
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Cross- collate SPV: Cross collate with ReNew Sun Energy (GUVNL- 105 MW). |
6. |
ReNew Wind Energy (TN2) Private Limited (RWETN2PL) |
150 MW NTPC |
RWETN2PL has entered into a term loan facility of Rs. 3,759,200,000 from Bank of America through the Finance Agreement dated September 9, 2022 and term loan facility of Rs. 3,940,700,000 from NIIF Infrastructure Finance Limited through the Finance Agreement dated March 2, 2023. Both NIIF and BoFA carries monthly Interest payments cycle. The facilities are secured by following security: |
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• Mortgage of immovable properties, |
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• Hypothecation of all plant & machinery and other immovable properties, |
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• Charge over all bank accounts, project cash flows, debtors and other assets, |
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• Assignment of all project contracts, project approvals and rights, |
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• Pledge of 100% shares of the SPV, |
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• DSRA equivalent to one quarter debt servicing obligations. |
7. |
ReNew Sun Waves Private Limited (RSWPL) |
SECI-III |
RSWPL has entered into a term loan facility of Rs. 2,861,900,000 from NIIF Infrastructure Finance Limited through the Finance Agreement dated March 29, 2022, term loan facility of Rs. 3,959,000,000 from Axis Bank through the Finance Agreement dated March 29, 2022 and term loan facility of Rs. 3,959,000,000 from HSBC through the Finance Agreement dated March 29, 2022. All carries monthly interest payments cycle. The facilities are secured by following security: |
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• Mortgage of immovable properties, |
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• Hypothecation of all plant & machinery and other immovable properties, |
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• Charge over all bank accounts, project cash flows, debtors and other assets, |
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• Assignment of all project contracts, project approvals and rights, |
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• Pledge of 100% shares of the SPV, |
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• DSRA equivalent to one quarter debt servicing obligations. |
8. |
Ostro AP Wind Private Limited (OAPPL) |
Ralla |
OAPPL has entered into a term loan facility of Rs. 444,100,000 from TATA through the Finance Agreement dated June 30, 2016, a term loan facility of Rs. 1,970,800,000 from IREDA through the Finance Agreement dated June 30, 2016, a term loan facility of 1,576,600,000 from IIFCL through the Finance Agreement dated June 30, 2016 and an ECB facility of Rs. 2,012,100,000 from IFC through the Finance Agreement dated May 6, 2016. TATA, IREDA, IIFCL carries monthly interest payments and IFC carries half-yearly interest payment cycle. The facilities are secured by following security: |
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• Mortgage of immovable properties, |
150
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• Hypothecation of all plant & machinery and other immovable properties, |
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• Charge over all bank accounts, project cash flows, debtors and other assets, |
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• Assignment of all project contracts, project approvals and rights, |
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• Pledge of 74% shares of the SPV, |
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• DSRA equivalent to two quarter debt servicing obligations, |
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• Corporate guarantee of OEPL. |
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No put option is present whereas Cross guarantee structure between Ostro AP and Ostro Andhra is made. |
9. |
Ostro Andhra Private Limited (OAPL) |
Ralla |
OAPL has entered into a term loan facility of Rs. 346,000,000 from TATA through the Finance Agreement dated June 30, 2016, which is prepaid on October 28, 2021, a term loan facility of Rs. 1,981,100,000 from IREDA through the Finance Agreement dated June 30, 2016, a term loan facility of 1,545,300,000 from IIFCL through the Finance Agreement dated June 30, 2016 and an ECB facility of Rs. 1,936,600,000 from IFC through the Finance Agreement dated May 6, 2016. TATA, IREDA, IIFCL carries monthly interest payments and IFC carries half-yearly interest payment cycle. The facilities are secured by following security: |
|
|
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• Mortgage of immovable properties, |
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• Hypothecation of all plant & machinery and other immovable properties, |
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• Charge over all bank accounts, project cash flows, debtors and other assets, |
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• Assignment of all project contracts, project approvals and rights, |
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• Pledge of 74% shares of the SPV, |
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• DSRA equivalent to two quarter debt servicing obligations. |
10. |
ReNew Wind Energy Sipla Private Limited (RWESPL) |
110 MW Karnataka |
RWESPL has entered into a term loan facility of Rs. 5,950,000,000 from L&T through the Finance Agreement dated June 8, 2022. Facility carries monthly interest payment cycle. The facility is secured by following security: |
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• Mortgage of immovable properties, |
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• Hypothecation of all plant & machinery and other immovable properties, |
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• Charge over all bank accounts, project cash flows, debtors and other assets, |
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• Assignment of all project contracts, project approvals and rights, |
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• Pledge of 51% shares of the SPV, |
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• DSRA equivalent to one quarter debt servicing obligations for first 2 year and 2nd quarter thereafter. |
11. |
Renew Wind Energy (Rajasthan One) Private Limited, Narmada Wind Energy Private Limited, Molagavalli Renewable Private Limited |
Rs. Bond |
RWE(R1)PL (along with co-borrowers Lexicon Vanijya Private Limited, Symphony Vyapaar Private Limited, Star Solar Power Private Limited and Sungold Energy Private Limited), NWEPL (along with co-borrower Renew Solar Energy (Karnataka Two) Pvt.Ltd.) and Molagavalli Renewable Private Limited have entered into term loans of Rs.4,695,900,000, Rs. 4,593,800,000 and Rs. 2,724,600,000 Respectively from IREDA. The facilities are secured by: |
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• Mortgage on immovable properties, |
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• Hypothecation of all plant & machinery and other immovable properties, |
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• Charge over all bank accounts, project cash flows, debtors and other assets, |
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• Assignment of all project contracts, project approvals and rights, |
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• Pledge of 51% shares of borrowers and co-borrowers except for NWEPL and RSE(K2)PL wherein 76% shares need to be pledged, |
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• DSRA equivalent to two quarter debt servicing obligations, |
151
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• Promoter Guarantee for 40% of the loan outstanding, |
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• Co-Borrower Guarantee, |
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• Other Borrowers Guarantee. |
12. |
Renew Solar Energy (Jharkhand Three) Private Limited (RSE(J3)PL) |
SECI IV |
RSE(J3)PL has entered into an ECB term loan facility in US$ equivalent of Rs.9,347,000,000. from a consortium of lenders consisting of Cooperative Rabobank U.A., BNP Paribas, Intesa Sanpaolo and Bayfront Infrastructure Capital III Pte. Ltd. The facility is secured by: Mortgage of immovable properties, |
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• Mortgage on Immovable Properties, |
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• Hypothecation of all plant & machinery and other immovable properties, |
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• Charge over all bank accounts, project cash flows, debtors and other assets, |
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• Assignment of all project contracts, project approvals and rights, |
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• Pledge of 100% shares of the SPV, |
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• DSRA equivalent to one quarter debt servicing obligations. |
13. |
Renew Solar Power Private Limited |
250 MW- MSEDCL Solar Project |
RSPPL has entered into a Term Facility of Rs 969,70,00,000 from SBI. The facility is having monthly interest payments. The facility is secured by: |
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• Mortgage on Immovable Properties pertaining to the project, |
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• Hypothecation of all plant & machinery and other movable properties pertaining to the project, |
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• Charge over all bank accounts, project cash flows, debtors and other assets pertaining to the project, |
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• Assignment of all project contracts, project approvals and rights, |
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• Pledge of 100% shares of the Promoter Contribution in the project. |
14. |
Ostro Kutch Wind Private Limited (OKWPL) |
250 MW- SECI I |
OKWPL has entered into a Term Loan facility of Rs. 5,820,000,000 from SBI, Rs.9,347,00,000 from SBI and an ECB Facility from ADB for Rs. 6,090,000,000. The SBI and Tata facility are having monthly interest and ADB facility is having quarterly interest payments. the facility is secured by: |
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• Mortgage on Immovable Properties, |
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• Hypothecation of all plant & machinery and other movable properties, |
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• Charge over all bank accounts, project cash flows, debtors and other assets, |
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• Assignment of all project contracts, project approvals and rights, |
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• Pledge of 51% share capital of the Borrower. |
15. |
Ostro Dakshin Power Private Limited (ODPPL) |
100 MW Wind Power Project-Taralkatti |
ODPPL has entered into a Term Loan Facility from State Bank of India (SBI) Amounting Rs 5,809,400,000 The facility is having monthly interest payments and is secured by: |
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• Mortgage on Immovable Properties, |
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• Hypothecation of all plant & machinery and other movable properties, |
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• Charge over all bank accounts, project cash flows, debtors and other assets, |
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• Assignment of all project contracts, project approvals and rights, |
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• Pledge of 76.13% share capital of the Borrower held by Ostro Energy Private Limited and NDU for balance 23.87% share capital of the borrower. |
16. |
• ReNew Wind Energy (Devgarh) Private Limited • ReNew Wind Energy (Rajasthan 3) |
Hermes |
The entities have entered into a facility from REC Limited (“RECL”) in a co-obligor and co- borrower structure. The total amount of the facility is Rs. 34,800,000,000. The facility is having monthly interest payments. The facility is secured by: • Mortgage on Immovable Properties and movables properties of all the projects, • Hypothecation of all plant & machinery and other movable properties, |
152
|
Private Limited • Kanak Renewables Limited • Rajat Renewables Limited • ReNew Solar Energy (Telangana) Private Limited • ReNew Saur Urja Privat Limited • Renew Clean Energy Private Limited • ReNew Wind Energy (Budh 3) Private Limited |
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• Charge over all bank accounts, project cash flows, debtors and other assets, • Assignment of all project contracts, project approvals and rights of all the projects • Pledge of 51% share capital of the Borrowers, • Cross guarantee of each Borrower security/ cash flows with the other Borrowers. |
17. |
Koppal- Narendra Transmission Limited |
Koppal Transmission Project |
The entity has entered into a facility with Axis Bank Limited, Aseem Infrastructure Finance Limited and India Infrastructure Finance Company Limited amounting to Rs. 5.175,000,000. The facility is having monthly interest payments. The Facility is secured by: |
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• Mortgage on Immovable Properties and movables properties, |
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• Hypothecation of all plant & machinery and other immovable properties, |
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• Charge over all bank accounts, project cash flows, debtors and other assets, |
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• Assignment of all project contracts, project approvals and rights of the project, |
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• Pledge of 51% share capital of the Borrowers held by the Promoters. |
18. |
Renew Jal Urja Private Limited |
99 MW Hydro Power Plant |
The project has entered into a facility from Indian Renewable Energy Development Agency (“IREDA”) amounting to Rs. 7,500,000,000. The facility is having monthly interest payments. The facility is secured by: |
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• Mortgage on Immovable Properties and movables properties, |
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• Hypothecation of all plant & machinery and other movable properties, |
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• Charge over all bank accounts, project cash flows, debtors and other assets, |
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• Assignment of all project contracts, project approvals and rights of the project, |
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• Pledge of 51% share capital of the Borrowers. |
19. |
Renew Surya Roshni Private Limited |
RTC |
The entity has entered into a facility from 13 Lenders (BNP Paribas, Cooperative Rabobank U.A., Crédit Agricole Corporate and Investment Bank, DBS, Intesa Sanpaolo S.p.A., Mizuho Bank, MUFG Bank, Natixis, Norddeutsche Landesbank Girozentrale, Siemens Bank, Société Générale, Sumitomo Mitsui Banking Corporation and Bayfront Infra) amounting to US$985,000,000. The facility is having quarterly interest payments. The facility is secured by the following: |
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• Mortgage/ Assignment by way of indenture/MoE/hypothecation and charge on the entire immovable properties, |
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• Hypothecation on the entire movable properties, |
153
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• Hypothecation on the entire cash flows, receivables, book debts and revenues, |
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• Hypothecation on the entire intangible assets, |
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• Hypothecation/mortgage/assignment, as the case may be, of all the rights, title, interest, benefits, claims and demands, |
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• Charge on the TRA, DSRA, and any other reserves and other bank accounts, |
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• Pledge of 100% shareholding in the Borrower in relation to the Project. |
20. |
Renew Power Private Limited (currently known as ReNew Private Limited) |
REC Re-Fi (Kod & Limbawas) |
RPL has entered into a Rupee Term Loan assistance of Rs. 5,458,800,000 for refinancing of Kod & Limbawas project from REC Limited. Facility carries monthly interest payment. Facility is secured by following security: |
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• Mortgage on Immovable Properties and movables properties, |
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• Hypothecation of all plant & machinery and other movable properties, related to Project, |
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• Charge over all bank accounts, project cash flows, debtors and other assets, related to project, |
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• Assignment of all project related contracts, approvals and rights. |
21. |
ReNew Solar Urja Private Limited |
SECI VI Solar (ReNew has sold its 49% stake and 100% economic interest in the SPV to Indigrid during the year) |
The entity has entered into the ECB facility from Rabobank, Siemens, Intesa and SOCGEN amounting to Rs. 10,700,000,000. The facility is having quarterly interest payments. The facility is secured by: • Mortgage/ Assignment by way of indenture/MoE/hypothecation and charge on the entire immovable properties, • Hypothecation on the entire movable properties, • Hypothecation on the entire cash flows, receivables, book debts and revenues, • Hypothecation on the entire intangible assets, • Hypothecation/mortgage/assignment, as the case may be, of all the rights, title, interest, benefits, claims and demands, • Charge on the TRA, DSRA, and any other reserves and other bank accounts, • Pledge of 100% shareholding in the Borrower in relation to the Project. |
22. |
ReNew Surya Aayan Private Limited |
SECI IX - 300 MW |
The entity has entered into the INR term loan facility from MUFG, Mizuho and BNP Paribas amounting to Rs. 10,350,000,000. The facility is having quarterly interest payments. The facility is secured by: • Mortgage/ Assignment by way of indenture/MoE/hypothecation and charge on the entire immovable properties, • Hypothecation on the entire movable properties, • Hypothecation on the entire cash flows, receivables, book debts and revenues, • Hypothecation on the entire intangible assets, • Hypothecation/mortgage/assignment, as the case may be, of all the rights, title, interest, benefits, claims and demands, • Charge on the TRA, DSRA, and any other reserves and other bank accounts, • Pledge of 100% shareholding in the Borrower in relation to the Project. |
23 |
ReNew Green (MHS One) Private Limited |
Sholapur Phase I |
The entity has entered into the INR term loan facility from PFC amounting to Rs. 1586,40,00,000. The facility is having monthly interest and debt payments. The facility is secured by: • Mortgage/ Assignment by way of indenture/MoE/hypothecation and charge on the entire immovable properties, • Hypothecation on the entire movable properties, |
154
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• Hypothecation on the entire uncalled capital, cash flows, receivables, book debts and revenues, • Hypothecation/assignment on the entire intangible assets, • Hypothecation/mortgage/assignment, insurance proceeds as the case may be, of all the rights, title, interest, benefits, claims and demands, guarantees from EPC contractor/Module supplier, • Charge on the TRA, DSRA, and any other reserves and other bank accounts, • Pledge of 51% shareholding in the Borrower in relation to the Project. |
24 |
ReNew Photovoltaics Private Limited |
3 projects: -Jaipur 4 GW Module -Dholera 2.4GW Module -Dholera 2.5GW Cell |
The entity has entered into the INR term loan facility from PFC amounting to Rs. 2546,40,00,000 (combined for 3 projects). The facility is having monthly interest and debt payments. The facility is secured by: • Mortgage/ Assignment by way of indenture/MoE/hypothecation and charge on the entire immovable properties, • Hypothecation on the entire movable properties, • Hypothecation on the entire uncalled capital, cash flows, receivables, book debts and revenues, • Hypothecation/assignment on the entire intangible assets, • Hypothecation/mortgage/assignment, insurance proceeds as the case may be, of all the rights, title, interest, benefits, claims and demands, guarantees from EPC contractor/Module supplier, • Charge on the TRA, DSRA, and any other reserves and other bank accounts, • Charge on Working capital assets • Pledge - At least 51% pledge of shares with Non-Disposal Undertaking (NDU) for additional 25% of shares. • Pledge of at least 51% OCRPS and/or CCDs and/or OCDs • Corporate Guarantee of ReNew India |
155
25 |
Renew Wind Energy (AP) Private Limited Renew Wind Energy (AP 3) Private Limited Pugalur Renewable Private Limited Bidwal Renewable Private Limited Zemira Renewable Energy Limited Renew Wind Energy (MP Three) Private Limited Renew Wind Energy (Rajasthan Four) Private Limited Renew Wind Energy (Maharashtra) Private Limited Shruti Power Projects Private Limited Bhumi Prakash Private Limited Tarun Kiran Bhoomi Private Limited |
Artemis |
The entities have entered into a facility from REC Limited (“RECL”) in a co- obligors and co- borrower structure. The total amount of the facility is Rs. 21,006,000,000. The facility is having monthly interest payments. The facility is secured by:
Mortgage on Immovable Properties and movables properties of all the projects, Hypothecation of all plant & machinery and other movable properties, Charge over all bank accounts, project cash flows, debtors and other assets, Assignment of all project contracts, project approvals and rights of all the projects Pledge of 51% share capital of the Borrowers, Cross guarantee of each Borrower security/ cash flows with the other Borrowers. |
26 |
Renew Wind Energy Varekarwadi Private Limited |
3 projects – Welturi, Bableshwar, GUVNL |
The entity has entered into the INR term loan facility from India IDF Limited amounting to Rs. 5,650,000,000. The facility is having monthly interest and quarterly debt payments. The facility is secured by:
Mortgage on Immovable Properties and movables properties of all the projects, Hypothecation of all plant & machinery and other movable properties, Charge over all bank accounts, project cash flows, debtors and other assets, Assignment of all project contracts, project approvals and rights of all the projects Pledge of 51% share capital of the Borrowers |
27 |
Renew Surya Ojas Private Limited |
Peak Power, Karnataka |
ReNew Surya Ojas has entered into INR term loan facility from State Bank of India, National Bank for Financing Infrastructure & Development (NaBFID), Standard Chartered & Canara Bank amounting to Rs. 27,101,400,000. The facility is having monthly interest payments. The facility is secured by:
Mortgage on Immovable Properties and movables properties of all the projects, Hypothecation of all plant & machinery and other movable properties, Charge over all bank accounts, DSRA, project cash flows, debtors and other assets, Assignment of all project contracts, project approvals and rights of all the projects Pledge of 51% share capital of the Borrowers and pledge/hypothecation & assignment of 100% of other instruments brought in as promoters’ contribution by shareholders and investors. |
156
Non-Fund based Facilities
Name of the Entity |
Name of the Bank |
Present limits |
Borrower & Utilization |
Security |
Date of sanction |
Tenor |
FB/ NFB (INR) |
|
|
|
|
||
ReNew Private Limited (RPL) |
Indusind |
5,000,000,000 |
Facility entered into by RPL and utilised at few SPVs level |
First Pari Passu hypothecation charge on all existing and future current assets and moveable fixed assets of the Borrower (except for assets specifically charged to project term lenders) |
28/09/2021 |
Up to 12 months (revolving basis) for LC/SBLC |
ReNew Private Limited (RPL) |
Yes Bank |
7,500,000,000 |
Carved out in multiple SPVs |
First Pari Passu hypothecation charge on all existing and future current assets and moveable fixed assets of the Borrower (except for assets specifically charged to project term lenders) |
15/09/2021 |
Up to 12 months (revolving basis) for LC/SBLC |
ReNew Private Limited (RPL) |
JP Morgan Chase Bank |
6,000,000,000 |
Carved out facility from RPL in Renew Solar Energy (Jharkhand One) Pvt Ltd, Ostro Bhesada Wind Pvt Ltd, Renew Wind Energy Jamb Pvt Ltd, ReNew Surya Jyoti Pvt Ltd and ReNew services Pvt Ltd |
First Pari Passu hypothecation charge on all existing and future current assets and moveable fixed assets of the Borrower (except for assets specifically charged to project term lenders) |
23/06/2021 |
Up to 12 months (revolving basis) for LC/SBLC |
ReNew Surya Ojas Private Limited (RSOPL) |
Standard Chartered |
5,000,000,000 |
Co-Borrower under Jharkhand One & Ostro Bhesada |
PP charge over current assets and movable fixed assets of JH1 and Ostro Bhesada & PP charge on project SPV i.e., Renew Surya Ojas (PP charge with project LC lenders) |
29/11/2022 |
Up to 12 months (revolving basis) for LC/SBLC |
Ostro Bhesada Wind Private Limited |
JPM |
6,000,000,000 |
Carved out from RPL |
First PP charge on current and Movable fixed assets of RPL |
11/11/2022 |
Up to 12 months (revolving basis) for LC/SBLC |
Ostro Bhesada Wind Private Limited |
Yes Bank |
7,500,000,000 |
Carved out from RPL |
First PP charge on current and Movable fixed assets of RPL |
15/09/2021 |
Up to 12 months (revolving basis) for LC/SBLC |
Ostro Bhesada Wind Private Limited |
Standard Chartered |
5,000,000,000 |
Co-Borrower under Jharkhand One & Ostro Bhesada |
PP charge over current assets and movable fixed assets of JH1 and Ostro Bheasda & PP charge on project SPV i.e., Renew Surya Ojas (PP charge with project LC lenders) |
29/11/2022 |
Up to 12 months (revolving basis) for LC/SBLC |
ReNew Solar Energy (Jharkhand One) Private Limited |
Standard Chartered |
5,000,000,000 |
Co-Borrower under Ojas, Jharkhand One & Ostro Bhesada |
PP charge over current assets and movable fixed assets of JH1 and Ostro Bheasda & PP charge on project SPV i.e., Renew Surya Ojas (PP charge with project LC lenders) |
29/11/2022 |
Up to 12 months (revolving basis) for LC/SBLC |
ReNew Solar Energy (Jharkhand One) Private Limited |
Axis |
6,000,000,000 |
Entered into by Jharkhand One Pvt Ltd |
exclusive charge on goods purchased under LC & CG from RPL |
19/07/2022 |
Up to 12 months (revolving basis) for LC/SBLC |
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2022 Notes
On September 12, 2019, we issued the $300,000,000 aggregate principal amount of 6.45% Senior Secured Notes due September 27, 2022, or the “2022 Notes”. The 2022 Notes accrue interest at a rate of 6.45% per annum, payable semi-annually. The 2022 Notes are secured by a first ranking pari passu mortgage over all our immovable and movable property in relation to the Kod-Limbwas project and the Pratapgarh Project; a first ranking pari passu charge over all our immovable assets, current assets, receivables, book-debts, cash flows and related accounts in relation to the same projects; a first ranking pari passu charge over the rights and benefits under the project documents and a first ranking pledge over certain equity shares and redeemable preference shares of ReNew Power Services Private Limited held by us.
The proceeds of the 2022 Notes were used for capital expenditure.
The 2022 Notes were offered and sold in transactions exempt from registration to qualified institutional buyers in the United States under Rule 144A under the Securities Act and institutional investors outside the United States under Regulation S under the Securities Act.
At any time, we may redeem the 2022 Notes, in whole or in part, at a redemption price equal to 100% of their principal amount, plus an applicable premium and accrued and unpaid interest, if any. At any time, we may redeem up to 40% of the aggregate principal amount of the 2022 Notes with the net cash proceeds from one or more sales of certain of our capital stock or offerings of the units of an infrastructure investment trust, at a redemption price equal to 106.45% of their principal amount, plus accrued and unpaid interest, if any.
The indenture governing the 2022 Notes contains covenants that limit our ability to incur or guarantee additional indebtedness, issue disqualified stock, declare dividends on capital stock or purchase or redeem capital stock, make certain investments or other specified restricted payments, sell assets, create liens, enter into transactions with shareholders or affiliates and effect a merger or consolidation, subject in each case to exceptions and qualifications.
The indenture also contains customary events of default (subject in certain cases to customary grace and cure periods). Generally, if an event of default occurs and is not cured within the time periods specified, the trustee or the holders of at least 25% in principal amount of the 2022 Notes then outstanding may declare all of the 2022 Notes to be due and payable immediately.
As of March 31, 2024, all of the 2022 Notes have been redeemed and none of the 2022 Notes remains outstanding.
2024 Notes
On March 12, 2019, March 26, 2019 and October 3, 2019, certain of our subsidiaries, Kanak Renewables Limited, Rajat Renewables Limited, ReNew Clean Energy Private Limited, ReNew Saur Urja Private Limited, ReNew Solar Energy (Telangana) Private Limited, ReNew Wind Energy (Budh 3) Private Limited, ReNew Wind Energy (Devgarh) Private Limited and ReNew Wind Energy (Rajasthan 3) Private Limited, issued the $525,000,000 aggregate principal amount of 6.67% Senior Secured Notes due March 12, 2024, or the “2024 Notes”. The 2024 Notes accrue interest at a rate of 6.67% per annum, payable semi-annually. The 2024 Notes are guaranteed by each issuer and by us, as the parent guarantor. The 2024 Notes are secured by a first priority charge on immovable and movable properties, project documents and securities of the issuers.
The proceeds of the 2024 Notes were used to repay existing indebtedness and capital expenditures.
The 2024 Notes were offered and sold in transactions exempt from registration to qualified institutional buyers in the United States under Rule 144A under the Securities Act and institutional investors outside the United States under Regulation S under the Securities Act.
At any time on or after March 12, 2021, the issuers may redeem the 2024 Notes, in whole or in part, at the redemption prices set forth in the indenture governing the 2024 Notes, plus accrued and unpaid interest, if any.
The indenture contains covenants that limit the ability of the issuers to incur or guarantee additional indebtedness, issue disqualified or preferred stock, declare dividends on capital stock or purchase or redeem capital stock, make investments or other specified restricted payments, have subsidiaries, sell assets, create liens, enter into sale and leaseback transactions, enter into transactions with shareholders or affiliates and effect a consolidation or merger, in each case subject to exceptions and qualifications.
The indenture also contains customary events of default (subject in certain cases to customary grace and cure periods). Generally, if an event of default occurs and is not cured within the time periods specified, the trustee or the holders of at least 25% in principal amount of the 2024 Notes may declare all of the 2024 Notes to be due and payable immediately.
As of March 31, 2024, all of the 2024 Notes have been redeemed and none of the 2024 Notes remains outstanding.
2027 Notes
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On January 29, 2020, we issued the $ 450,000,000 aggregate principal amount of 5.875% Senior Secured Notes due March 5, 2027, or the “2027 Notes”. Between July 29, 2022 and March 5, 2023, we must redeem 40% of the 2027 Notes then outstanding at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest. The 2027 Notes accrue interest at a rate of 5.875% per annum, payable semi-annually. The 2027 Notes are secured by a first ranking pari passu mortgage over all our immovable and movable property in relation to our 250 MW wind power project located in Kutch, Gujarat; a first ranking pari passu charge over all our immovable assets, current assets, receivables, book-debts, cash flows and related accounts in relation to that project; a first ranking pari passu charge over the rights and benefits under the project documents and a first ranking pledge over certain equity shares and redeemable preference shares of ReNew Power Services Private Limited held by us.
The proceeds of the 2027 Notes were used to repay existing indebtedness and capital expenditure.
The 2027 Notes were offered and sold in transactions exempt from registration to qualified institutional buyers in the United States under Rule 144A under the Securities Act and institutional investors outside the United States under Regulation S under the Securities Act.
At any time prior to July 29, 2022, we may redeem the 2027 Notes, in whole or in part, at a redemption price equal to 100% of their principal amount, plus an applicable premium and accrued and unpaid interest, if any. At any time prior to July 29, 2022, we may redeem up to 40% of the aggregate principal amount of the 2027 Notes with the net cash proceeds from one or more sales of certain of our capital stock or offerings of the units of an infrastructure investment trust, at a redemption price equal to 105.875% of their principal amount, plus accrued and unpaid interest, if any. At any time on or after July 29, 2022, we may on any one or more occasions redeem the 2027 Notes, in whole or in part, at the redemption prices set forth in the indenture governing the 2027 Notes, plus accrued and unpaid interest, if any.
The indenture contains covenants that limit our ability to incur or guarantee additional indebtedness, issued disqualified stock, declare dividends on capital stock or purchase or redeem capital stock, make certain investments or other specified restricted payments, sell assets, create liens, enter into transactions with shareholders or affiliates and effect a merger or consolidation, in each case subject to exceptions and qualifications.
The indenture also contains customary events of default (subject in certain cases to customary grace and cure periods). Generally, if an event of default occurs and is not cured within the time periods specified, the trustee or the holders of at least 25% in principal amount of the 2027 Notes then outstanding may declare all of the 2027 Notes to be due and payable immediately.
As of March 31, 2024, $270,000,000 of the 2027 Notes remained outstanding.
2027 Notes
On January 29, 2020, we issued the $ 450,000,000 aggregate principal amount of 5.875% Senior Secured Notes due March 5, 2027, or the “2027 Notes”. Between July 29, 2022 and March 5, 2023, we must redeem 40% of the 2027 Notes then outstanding at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest. The 2027 Notes accrue interest at a rate of 5.875% per annum, payable semi-annually. The 2027 Notes are secured by a first ranking pari passu mortgage over all our immovable and movable property in relation to our 250 MW wind power project located in Kutch, Gujarat; a first ranking pari passu charge over all our immovable assets, current assets, receivables, book-debts, cash flows and related accounts in relation to that project; a first ranking pari passu charge over the rights and benefits under the project documents and a first ranking pledge over certain equity shares and redeemable preference shares of ReNew Power Services Private Limited held by us.
The proceeds of the 2027 Notes were used to repay existing indebtedness and capital expenditure.
The 2027 Notes were offered and sold in transactions exempt from registration to qualified institutional buyers in the United States under Rule 144A under the Securities Act and institutional investors outside the United States under Regulation S under the Securities Act.
At any time prior to July 29, 2022, we may redeem the 2027 Notes, in whole or in part, at a redemption price equal to 100% of their principal amount, plus an applicable premium and accrued and unpaid interest, if any. At any time prior to July 29, 2022, we may redeem up to 40% of the aggregate principal amount of the 2027 Notes with the net cash proceeds from one or more sales of certain of our capital stock or offerings of the units of an infrastructure investment trust, at a redemption price equal to 105.875% of their principal amount, plus accrued and unpaid interest, if any. At any time on or after July 29, 2022, we may on any one or more occasions redeem the 2027 Notes, in whole or in part, at the redemption prices set forth in the indenture governing the 2027 Notes, plus accrued and unpaid interest, if any.
The indenture contains covenants that limit our ability to incur or guarantee additional indebtedness, issued disqualified stock, declare dividends on capital stock or purchase or redeem capital stock, make certain investments or other specified restricted payments, sell assets, create liens, enter into transactions with shareholders or affiliates and effect a merger or consolidation, in each case subject to exceptions and qualifications.
The indenture also contains customary events of default (subject in certain cases to customary grace and cure periods). Generally, if an event of default occurs and is not cured within the time periods specified, the trustee or the holders of at least 25% in principal amount of the 2027 Notes then outstanding may declare all of the 2027 Notes to be due and payable immediately.
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As of March 31, 2024, $270,000,000 of the 2027 Notes remained outstanding.
2027 NCDs
On November 2, 2020, certain of our subsidiaries, Bhumi Prakash Private Limited, Bidwal Renewable Private Limited, Pugalur Renewable Private Limited, ReNew Wind Energy (AP) Private Limited, ReNew Wind Energy (AP 3) Private Limited, ReNew Wind Energy (Maharashtra) Private Limited, ReNew Wind Energy (MP Three) Private Limited, ReNew Wind Energy (Rajasthan Four) Private Limited, Shruti Power Projects Private Limited, Tarun Kiran Bhoomi Private Limited and Zemira Renewable Energy Limited, issued the Rs. 23,910,550,000 aggregate principal amounts of 8.458% Senior Secured Non-Convertible Debentures due October 29, 2027, or the “2027 NCDs”. The 2027 NCDs accrue interest at a rate of 8.458% per annum, payable semi-annually. The 2027 NCDs issued by each issuer are guaranteed by each of the other issuers and ReNew India. The 2027 NCDs are secured by a first ranking charge on movable and immovable properties of the issuers, all accounts opened in accordance with the terms of the 2027 NCDs, project documents and pledges over 51% of the equity shares of the issuers.
The proceeds of the 2027 NCDs were used to extend loans within the ReNew India group and to repay existing indebtedness. The 2027 NCDs were offered and sold in transactions exempt from registration to an institutional investor, India Green Energy
Holdings, outside the United States under Regulation S under the Securities Act.
On one business day prior to April 29, 2024, India Green Energy Holdings has the right to require the issuers to redeem all of the 2027 NCDs then held by it at a redemption price to be determined in accordance with the debenture trust deeds governing the 2027 NCDs, plus accrued and unpaid interest, if any.
At any time, any of the issuers may redeem the 2027 NCDs, in whole or in part, at a redemption price determined in accordance with the debenture trust deeds, plus accrued and unpaid interest, if any. At any time, the issuers may redeem up to 40% of the aggregate principal amount of the 2027 NCDs with the net cash proceeds from one or more sales of certain of our capital stock, at a redemption price determined in accordance with the debenture trust deeds, plus accrued and unpaid interest, if any.
The debenture trust deeds contain covenants that limit the ability of the issuers to incur or guarantee additional indebtedness, declare dividends on capital stock or purchase or redeem capital stock, make investments or other specified restricted payments, issue or sell capital stock, sell assets, enter into transactions with shareholders or affiliates and effect a consolidation or merger, in each case subject to exceptions and qualifications.
The debenture trust deeds also contain customary events of default (subject in certain cases to customary grace and cure periods). Generally, if an event of default occurs and is not cured within the time periods specified, the trustee or the holders of at least 25% in aggregate principal amount of the applicable series of 2027 NCDs then outstanding may declare all of the 2027 NCDs to be due and payable immediately.
As of March 31, 2024, all of the 2027 NCDs have been redeemed and none of the 2027 NCDs remains outstanding.
2028 Notes
On April 14, 2021, certain of our subsidiaries, ReNew Wind Energy (AP 2) Private Limited, Ostro Jaisalmer Private Limited, Ostro Urja Wind Private Limited, Ostro Madhya Wind Private Limited, Badoni Power Private Limited, AVP Powerinfra Private Limited, Prathamesh Solarfarms Limited, Ostro Anantapur Private Limited, Ostro Mahawind Power Private Limited and ReNew Wind Energy Delhi Private Limited, issued the $585,000,000 in aggregate principal amount of 4.50% Senior Secured Notes due July 14, 2028, or the “2028 Notes”. The 2028 Notes accrue interest at a rate of 4.50% per annum, payable semi-annually, except that the first payment of interest, to be made on January 14, 2022, being the first interest payment date for the 2028 Notes, will be in respect of the period from and including April 14, 2021 to but excluding the first interest payment date. The 2028 Notes are guaranteed by each issuer from May 7, 2021 and by the parent guarantor from April 14, 2021. The 2028 Notes will be secured by a first priority pari passu mortgage/charge on immovable and movable properties of the issuers, a first priority pari passu charge on the project documents of the issuers, and a first priority pari passu pledge over 51.0% of the equity shares of the issuers.
The proceeds of the 2028 Notes, along with cash and cash equivalents will be used, among others, to repay outstanding indebtedness of the issuer group, and for capital expenditure in eligible green projects.
The 2028 Notes were offered and sold in transactions exempt from registration to qualified institutional buyers in the United States under Rule 144A under the Securities Act and institutional investors outside the United States under Regulation S under the Securities Act.
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At any time prior to October 14, 2023, the issuers may redeem the 2028 Notes, in whole or in part, at a redemption price equal to 100% of their principal amount, plus an applicable premium and accrued and unpaid interest, if any, to (but not including) the applicable redemption date. At any time prior to October 14, 2023, the issuers may redeem up to 40% of the aggregate principal amount of the 2028 Notes with the net cash proceeds from one or more equity offerings, at a redemption price equal to 104.50% of their principal amount, plus accrued and unpaid interest, if any, to (but not including) the applicable redemption date, subject to certain conditions. At any time on or after October 14, 2023, the issuers may redeem the 2028 Notes, in whole or in part, at the redemption prices, plus accrued and unpaid interest, if any.
The indenture for the 2028 Notes contains covenants that limit the ability of the issuers to incur or guarantee additional indebtedness, issue disqualified or preferred stock, declare dividends on capital stock or purchase or redeem capital stock, make investments or other specified restricted payments, have subsidiaries, sell assets, enter into sale and leaseback transactions, enter into transactions with shareholders or affiliates and effect a consolidation or merger, in each case subject to limitations and exceptions.
The indenture for the 2028 Notes also contains customary events of default (subject in certain cases to customary grace and cure periods). Generally, if an event of default occurs and is not cured within the time periods specified, the trustee or the holders of at least 25% in principal amount of the 2028 Notes then outstanding may declare all of the 2028 Notes to be due and payable immediately.
As of March 31, 2024, all of the 2028 Notes remained outstanding.
2030 NCDs
On March 25, 2021, certain of our subsidiaries, ReNew Solar Energy (Karnataka) Private Limited, ReNew Solar Energy (TN) Private Limited, ReNew Wind Energy (Karnataka) Private Limited, ReNew Wind Energy (MP Two) Private Limited, ReNew Wind Energy (Rajkot) Private Limited, ReNew Wind Energy (Shivpur) Private Limited and ReNew Wind Energy (Welturi) Private Limited, issued the Rs. 33,700,500,000 aggregate principal amounts of 6.028% Senior Secured Non-Convertible Debentures due March 26, 2030, or the “2030 NCDs”. The 2030 NCDs accrue interest at a rate of 6.028% per annum, payable semi-annually. The 2030 NCDs issued by each issuer are guaranteed by each other issuer and ReNew India. The 2030 NCDs are secured by a first priority charge on movable and immovable properties of the issuers, project documents and pledges over 51% of equity shares of the issuers. The proceeds of the 2030 NCDs were used to repay existing indebtedness of the issuers.
The 2030 NCDs were offered and sold in transactions exempt from registration to an institutional investor, India Green Power Holdings, outside the United States under Regulation S under the Securities Act.
On one business day before each of February 22, 2024, February 22, 2025 and February 22, 2026, the issuers must redeem 6.67%, 6.67% and 6.66%, respectively, of the original aggregate principal amount of the 2030 NCDs, subject to certain adjustments, at redemption prices determined in accordance with the debenture trust deeds governing the 2030 NCDs, plus accrued and unpaid interest, if any.
At any time on or after August 22, 2026, India Green Power Holdings will have the right to require the issuers to redeem some or all of the 2030 NCDs then held by it at a redemption price to be determined in accordance with the debenture trust deeds, plus accrued and unpaid interest, if any.
At any time, the issuers may redeem the 2030 NCDs, in whole or in part, at a redemption price determined in accordance with the debenture trust deeds, plus accrued and unpaid interest, if any. At any time, the issuers may redeem up to 40% of the aggregate principal amount of the 2030 NCDs with the net cash proceeds from one or more sales of certain of our capital stock, at a redemption price determined in accordance with the debenture trust deeds, plus accrued and unpaid interest, if any.
The debenture trust deeds contain covenants that limit the ability of the issuers to incur or guarantee additional indebtedness, issue disqualified or preferred stock, declare dividends on capital stock or purchase or redeem capital stock, make investments or other specified restricted payments, sell assets, create liens, enter into transactions with shareholders or affiliates and effect a consolidation or merger, in each case subject to exceptions and qualifications.
The debenture trust deeds also contain customary events of default (subject in certain cases to customary grace and cure periods). Generally, if an event of default occurs and is not cured within the time periods specified, the trustee or the holders of at least 25% in aggregate principal amount of the applicable series of 2030 NCDs may declare all of the 2030 NCDs to be due and payable immediately.
2032 Notes
On January 19, 2022, ReNew Power Private Limited (presently known as ReNew Private Limited), issued the $ 400,000,000 aggregate principal amount of 4.56% Senior Notes due January 18, 2032, or the “2032 Notes”.
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The 2032 Notes accrue interest at a rate of 4.56% per annum, payable semi-annually. The proceeds of the 2032 Notes were used to repay existing indebtedness of the issuer and subsidiaries of the issuer.
The 2032 Notes were offered and sold in transactions exempt from registration to an institutional investor, India Clean Energy Holdings, outside the United States under Regulation S under the Securities Act. India Clean Energy Holdings raised an underlying $ 400,000,000 aggregate principal amount of 4.5% senior secured notes with a tenor of 5.25 years.
At any time prior to July 18, 2025, the issuer may redeem the 2032 Notes, in whole or in part, at a redemption price determined in accordance with the debenture trust deeds, plus accrued and unpaid interest, if any. At any time prior to July 18, 2025, the issuer may redeem up to 40% of the aggregate principal amount of the 2032 Notes with the net cash proceeds from one or more sales of certain of our capital stock, at a redemption price determined in accordance with the debenture trust deed, plus accrued and unpaid interest, if any.
At any time during the period of July 18, 2025 to July 17, 2026, the issuer may redeem the 2032 Notes, in whole or in part, at a redemption price of 101.25%, plus accrued and unpaid interest, if any.
At any time after July 18, 2026, the issuer may redeem the 2032 Notes, in whole or in part, at a redemption price of 100%, plus accrued and unpaid interest, if any.
The trust deed contains covenants that limit the ability of the issuers to incur or guarantee additional indebtedness, issue disqualified stock, declare dividends on capital stock or purchase or redeem capital stock, make investments or other specified restricted payments, sell assets, create liens, enter into transactions with shareholders or affiliates and effect a consolidation or merger, in each case subject to exceptions and qualifications.
The trust deed also contains customary events of default (subject in certain cases to customary grace and cure periods). Generally, if an event of default occurs and is not cured within the time periods specified, the trustee or the holders of at least 25% in aggregate principal amount of the applicable series of 2032 Notes may declare all of the 2032 Notes to be due and payable immediately.
Description of Material Indebtedness of Renew Global and its immediate subsidiaries
The following is a summary of certain information with respect to material indebtedness of ReNew Global and its subsidiaries. Unless the context otherwise requires, all references in this section to “we,” “us,” or “our” refer to ReNew Global.
Facility of US$ 125 million from Standard Chartered Bank
On October 2022, ReNew Global entered into a facility agreement with Standard Chartered Bank and certain of its affiliates in respect of a US$ 75 million facility. In 2023, parties entered into a first deed of amendment and restatement with respect to the Standard Chartered Bank facility and included an additional facility amounting to US$ 50 million. As of March 31, 2024, this Facility has been completely prepaid and there is no outstanding under this Facility.
2026 Notes
On April 28, 2023, Diamond II Limited, a subsidiary of ReNew Global, issued the $400,000,000 aggregate principal amount of 7.95% Senior Secured Notes due July 28, 2026, or the “2026 Notes.”
The 2026 Notes accrue interest at a rate of 7.95% per annum, payable semi -annually. The proceeds of the 2026 Notes were used to on-lend to Renew Global and its subsidiaries and certain other uses, each in accordance with the Green Bond Framework.
The 2026 Notes were offered and sold in transactions exempt from registration to U.S. investors under Rule 144A of the Securities Act and outside the United States under Regulation S under the Securities Act.
At any time prior to July 28, 2025, the issuer may redeem the 2026 Notes, in whole or in part, at a redemption price determined in accordance with the indenture, plus accrued and unpaid interest, if any.
At any time prior to July 28, 2025, the issuer may redeem up to 40% of the aggregate principal amount of the 2026 Notes with the net cash proceeds from one or more sales of certain of our capital stock, at a redemption price determined in accordance with the indenture, plus accrued and unpaid interest, if any.
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At any time during the period of July 28, 2025 to January 27, 2026, the issuer may redeem the 2026 Notes, in whole or in part, at a redemption price of 103.975%, plus accrued and unpaid interest, if any.
At any time after January 28, 2026, the issuer may redeem the 2026 Notes, in whole or in part, at a redemption price of 100%, plus accrued and unpaid interest, if any.
The indenture contains covenants that limit the ability of the issuer and certain related entities to incur or guarantee additional indebtedness, issue disqualified stock, declare dividends on capital stock or purchase or redeem capital stock, make investments or other specified restricted payments, sell assets, create liens, enter into transactions with shareholders or affiliates and effect a consolidation or merger, in each case subject to exceptions and qualifications.
The indenture also contains customary events of default (subject in certain cases to customary grace and cure periods). Generally, if an event of default occurs and is not cured within the time periods specified, the trustee or the holders of at least 25% in aggregate principal amount of the 2026 Notes may declare all of the 2026 Notes to be due and payable immediately.
There are no governmental laws, decrees, regulations or other legislation in the United Kingdom that may affect the import or export of capital, including the availability of cash and cash equivalents for use by ReNew Global, or that may affect the remittance of dividends, interest, or other payments by ReNew Global to non-resident holders of its ordinary shares, other than withholding tax requirements. There is no limitation imposed by English law or in ReNew Global’s Articles on the right of non-residents to hold or vote shares.
The following description is not intended to constitute a complete analysis of all tax consequences relating to the acquisition, ownership and disposition of our Class A Ordinary Shares and Warrants. You should consult your own tax advisor concerning the tax consequences of your particular situation, as well as any tax consequences that may arise under the laws of any state, local, foreign or other taxing jurisdiction.
Certain Material U.S. Federal Income Tax Considerations
The following discussion is a summary of certain material U.S. federal income tax considerations to U.S. Holders and Non-US Holders (each as defined below) of the ownership and disposition of ReNew Global Shares and Warrants. This discussion applies only to ReNew Global Shares and Warrants, as the case may be, that are held as “capital assets” within the meaning of Section 1221 of the U.S. Internal Revenue Code of 1986, as the same may be amended or supplemented (the “Code”) (generally, property held for investment).
The following does not purport to be a complete analysis of all potential tax considerations arising in connection with the acquisition, ownership and disposal of ReNew Global Shares and Warrants. The effects and considerations of other U.S. federal tax laws, such as estate and gift tax laws, alternative minimum or Medicare contribution tax consequences and any applicable state, local or non-US tax laws are not discussed. This discussion is based on the Code, Treasury regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the U.S. Internal Revenue Service (the “IRS”), in each case in effect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect the tax consequences discussed below. Renew Global has not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS will not take or a court will not sustain a contrary position to that discussed below regarding the tax consequences discussed below.
This discussion does not, and is not intended to, address all U.S. federal income tax consequences relevant to a holder’s particular circumstances.
In addition, it does not address consequences relevant to holders' subject to special rules, including, without limitation:
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For purposes of this discussion, a “US Holder” is any beneficial owner of ReNew Global Shares and/or Warrants, as the case may be, that is for U.S. federal income tax purposes:
If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds ReNew Global Shares and/or Warrants, the tax treatment of an owner of such entity will depend on the status of the owners, the activities of the entity or arrangement and certain determinations made at the partner level. Accordingly, entities or arrangements treated as partnerships for U.S. federal income tax purposes and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.
THE U.S. FEDERAL INCOME TAX CONSEQUENCES APPLICABLE TO HOLDERS OF RENEW GLOBAL SHARES AND WARRANTS WILL DEPEND ON EACH HOLDER’S PARTICULAR TAX CIRCUMSTANCES. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE, AND LOCAL, AND NON-US INCOME AND OTHER TAX CONSEQUENCES TO YOU, IN LIGHT OF YOUR PARTICULAR INVESTMENT OR TAX CIRCUMSTANCES, OF ACQUIRING, HOLDING, AND DISPOSING OF RENEW GLOBAL SHARES AND WARRANTS.
US Holders
Distributions on ReNew Global Shares
If Renew Global makes distributions of cash or property on the ReNew Global Shares, the gross amount of such distributions (including any amount of foreign taxes withheld) will be treated for U.S. federal income tax purposes first as a dividend to the extent of its current and accumulated earnings and profits (as determined for U.S. federal income tax purposes), and then as a tax-free return of capital to the extent of the U.S. Holder’s tax basis, with any excess treated as capital gain from the sale or exchange of the shares. Because Renew Global does not expect to provide calculations of its earnings and profits under U.S. federal income tax principles, a U.S. Holder should expect all cash distributions to be reported as dividends for U.S. federal income tax purposes. Any such dividend will not be eligible for the dividends received deduction allowed to corporations in respect of dividends received from U.S. corporations.
Subject to the discussions below under “Passive Foreign Investment Company Rules”, dividends received by certain non-corporate
US Holders (including individuals) may be “qualified dividend income,” which is taxed at the lower applicable long-term capital gains rate, provided that:
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US Holders should consult their own tax advisors regarding the availability of the lower rate for dividends paid with respect to ReNew Global Shares. Subject to certain exceptions, dividends on ReNew Global Shares will constitute foreign source income and generally passive income for foreign tax credit limitation purposes.
Sale, Exchange, Redemption or Other Taxable Disposition of ReNew Global Shares and Warrants.
Subject to the discussion below under “Passive Foreign Investment Company Rules”, a U.S. Holder generally will recognise gain or loss on any sale, exchange, redemption or other taxable disposition of ReNew Global Shares or Warrants in an amount equal to the difference between (i) the amount realised on the disposition and (ii) such U.S. Holder’s adjusted tax basis in such ReNew Global Shares and/or Warrants, as the case may be. Any gain or loss recognised by a U.S. Holder on a taxable disposition of ReNew Global Shares or Warrants generally will be capital gain or loss. A non-corporate U.S. Holder, including an individual, who has held the ReNew Global Shares and/or Warrants for more than one year generally will be eligible for reduced income tax rates for such long-term capital gains. The deductibility of capital losses is subject to limitations.
Any such gain or loss recognised generally will be treated as U.S. source gain or loss. U.S. Holders are urged to consult their own tax advisor regarding the ability to claim a foreign tax credit and the application of the Treaty to such U.S. Holder’s particular circumstances.
Exercise or Lapse of a Warrant
Except as discussed below with respect to the cashless exercise of a Warrant, a U.S. Holder generally will not recognise gain or loss upon the acquisition of a Renew Global Share on the exercise of a Warrant for cash. A U.S. Holder’s tax basis in ReNew Global Shares received upon exercise of the Warrant generally should be an amount equal to the sum of the U.S. Holder’s tax basis in the Warrant received therefore and the exercise price. The U.S. Holder’s holding period for a Renew Global Share received upon exercise of the Warrant will begin on the date following the date of exercise (or possibly the date of exercise) of the Warrant and will not include the period during which the U.S. Holder held the Warrant. If a Warrant is allowed to lapse unexercised, a U.S. Holder that has otherwise received no proceeds with respect to such Warrant generally will recognise a capital loss equal to such U.S. Holder’s tax basis in the Warrant.
The income tax consequences of a cashless exercise of a Warrant are not clear under current U.S. federal income tax law. A cashless exercise may be tax-deferred, either because the exercise is not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either situation, a U.S. Holder’s basis in the ReNew Global Shares received would equal the U.S. Holder’s basis in the Warrants exercised therefor. If the cashless exercise is not treated as a realization event, a U.S. Holder’s holding period in the ReNew Global Shares would be treated as commencing on the date following the date of exercise (or possibly the date of exercise) of the Warrants. If the cashless exercise were treated as a recapitalisation, the holding period of the ReNew Global Shares would include the holding period of the Warrants exercised therefor.
It is also possible that a cashless exercise of a Warrant could be treated in part as a taxable exchange in which gain or loss would be recognised in the manner set forth above under “Sale, Exchange, Redemption or Other Taxable Disposition of ReNew Global Shares and Warrants.” In such event, a U.S. Holder could be deemed to have surrendered Warrants equal to the number of ReNew Global Shares having an aggregate fair market value equal to the exercise price for the total number of Warrants to be exercised. The U.S. Holder would recognise capital gain or loss in an amount generally equal to the difference between (i) the fair market value of the Warrants deemed surrendered and (ii) the U.S. Holder’s tax basis in such Warrants deemed surrendered. In this case, a U.S. Holder’s tax basis in the ReNew Global Shares received would equal the sum of (i) U.S. Holder’s tax basis in the Warrants deemed exercised and (ii) the exercise price of such Warrants. A U.S. Holder’s holding period for the ReNew Global Shares received in such case generally would commence on the date following the date of exercise (or possibly the date of exercise) of the Warrants.
Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise of Warrants, there can be no assurance which, if any, of the alternative income tax consequences and holding periods described above would be adopted by the IRS or a court of
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law. Accordingly, U.S. Holders should consult their own tax advisors regarding the income tax consequences of a cashless exercise of Warrants.
Possible Constructive Distributions
The terms of each Warrant provide for an adjustment to the number of ReNew Global Shares for which the Warrant may be exercised or to the exercise price of the Warrant in certain events, as discussed under “Additional Information—Memorandum and Articles of Association—Share Capital.” An adjustment which has the effect of preventing dilution generally is not taxable. A U.S. Holder of a Warrant would, however, be treated as receiving a constructive distribution from Renew Global if, for example, the adjustment increases the holder’s proportionate interest in Renew Global’s assets or earnings and profits (for instance, through an increase in the number of ReNew Global Shares that would be obtained upon exercise of such Warrant) as a result of a distribution of cash or other property such as other securities to the holders of the ReNew Global Shares which is taxable to the holders of such shares as described under “Distributions on ReNew Global Shares” above. Such constructive distribution would generally be subject to tax as described under that section in the same manner as if the U.S. Holder of such Warrant received a cash distribution from Renew Global equal to the fair market value of such increased interest. However, it is unclear whether a distribution treated as a dividend deemed paid to a non-corporate U.S. Holder would be eligible for the lower applicable long-term capital gains income tax rates as described above under “Distributions on ReNew Global Shares.”
Passive Foreign Investment Company Rules
The treatment of U.S. Holders of ReNew Global Shares could be materially different from that described above if Renew Global is treated as a PFIC for U.S. federal income tax purposes. A non-US entity treated as a corporation for U.S. federal income tax purposes generally will be a PFIC for U.S. federal income tax purposes for any taxable year if either (1) at least 75% of its gross income for such year is passive income or (2) at least 50% of the value of its assets (generally based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income. For this purpose, Renew Global will be treated as owning its proportionate share of the assets and earning its proportionate share of the income of any other entity treated as a corporation for U.S. federal income tax purposes in which Renew Global owns, directly or indirectly, 25% or more (by value) of the stock. Based on the current and anticipated composition of the income, assets and operations of Renew Global and its subsidiaries, Renew Global does not believe it will be treated as a PFIC for the current taxable year.
However, whether we or any of our subsidiaries are a PFIC for any taxable year is a factual determination that depends on, among other things, the composition of our income and assets, our market value and the market value of our subsidiaries’ shares and assets. Changes in the composition of our income or assets may cause us to be or become a PFIC for the current or subsequent taxable years. In addition, whether we are treated as a PFIC for U.S. federal income tax purposes is determined annually after the close of each taxable year and, thus, is subject to significant uncertainty. Moreover, the application of the PFIC rules is subject to uncertainty in several respects, and we cannot assure you that the IRS will not take a contrary position or that a court will not sustain such a challenge by the IRS. Accordingly, there can be no assurances that we will not be treated as a PFIC for the current taxable year or in any future taxable year.
Under the PFIC rules, if Renew Global were considered a PFIC at any time that a U.S. Holder owns ReNew Global Shares or Warrants, Renew Global would continue to be treated as a PFIC with respect to such U.S. Holder’s investment unless (i) it ceased to be a PFIC and (ii) the U.S. Holder made a “deemed sale” election under the PFIC rules. If such election is made, a U.S. Holder will be deemed to have sold its ReNew Global Shares or Warrants at their fair market value on the last day of the last taxable year in which Renew Global is classified as a PFIC, and any gain from such deemed sale would be subject to the consequences described below. After the deemed sale election, the ReNew Global Shares or Warrants with respect to which the deemed sale election was made will not be treated as shares in a PFIC unless ReNew Global subsequently becomes a PFIC.
For each taxable year that Renew Global is treated as a PFIC with respect to a U.S. Holder’s ReNew Global Shares or Warrants, the U.S. Holder will be subject to special income tax rules with respect to any “excess distribution” (as defined below) received and any gain realised from a sale or disposition (including a pledge) of its ReNew Global Shares or Warrants or, collectively the “Excess Distribution Rules”, unless the U.S. Holder makes a valid QEF election or mark-to-market election as discussed below. Distributions received by a U.S. Holder in a taxable year that are greater than 125% of the average annual distributions received during the shorter of the three preceding taxable years or the U.S. Holder’s holding period for the ReNew Global Shares will be treated as excess distributions. Under these special income tax rules:
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Under the Excess Distribution Rules, the income tax liability for amounts allocated to taxable years prior to the year of disposition or excess distribution cannot be offset by any net operating losses, and gains (but not losses) realised on the sale of the ReNew Global Shares or Warrants cannot be treated as capital gains, even though the U.S. Holder holds the ReNew Global Shares or Warrants as capital assets.
Certain of the PFIC rules may impact U.S. Holders with respect to equity interests in subsidiaries and other entities which Renew Global may hold, directly or indirectly, that are PFICs or, collectively, “Lower-Tier PFICs”. There can be no assurance, however, that Renew Global does not own, or will not in the future acquire, an interest in a subsidiary or other entity that is or would be treated as a Lower-Tier PFIC. U.S. Holders should consult their own tax advisors regarding the application of the PFIC rules to any of Renew Global’s subsidiaries.
If Renew Global is a PFIC, a U.S. Holder of ReNew Global Shares (but not Warrants) may avoid taxation under the Excess Distribution Rules described above by making a “qualified electing fund” or, “QEF”, election. However, a U.S. Holder may make a QEF election with respect to its ReNew Global Shares only if Renew Global provides U.S. Holders on an annual basis with certain financial information specified under applicable U.S. Treasury regulations. Because ReNew Global does not intend to provide such information, however, the QEF Election will not be available to U.S. Holders with respect to ReNew Global Shares and a QEF election is not available with respect to Warrants.
Alternatively, a U.S. Holder of “marketable stock” (as defined below) may make a mark-to- market election for its ReNew Global Shares to elect out of the Excess Distribution Rules discussed above if ReNew Global is treated as a PFIC. If a U.S. Holder makes a mark- to-market election with respect to its ReNew Global Shares, such U.S. Holder will include in income for each year that Renew Global is treated as a PFIC with respect to such ReNew Global Shares an amount equal to the excess, if any, of the fair market value of the ReNew Global Shares as of the close of the U.S. Holder’s taxable year over the adjusted basis in the ReNew Global Shares. A U.S. Holder will be allowed a deduction for the excess, if any, of the adjusted basis of the ReNew Global Shares over their fair market value as of the close of the taxable year. However, deductions will be allowed only to the extent of any net mark-to-market gains on the ReNew Global Shares included in the U.S. Holder’s income for prior taxable years. Amounts included in income under a mark-to-market election, as well as gain on the actual sale or other disposition of the ReNew Global Shares, will be treated as ordinary income. Ordinary loss treatment will also apply to the deductible portion of any mark-to-market loss on the ReNew Global Shares, as well as to any loss realised on the actual sale or disposition of the ReNew Global Shares, to the extent the amount of such loss does not exceed the net mark- to-market gains for such ReNew Global Shares previously included in income. A U.S. Holder’s basis in the ReNew Global Shares will be adjusted to reflect any mark-to-market income or loss. If a U.S. Holder makes a mark-to -market election, any distributions Renew Global makes would generally be subject to the rules discussed above under “Distributions on ReNew Global Shares,” except the lower rates applicable to qualified dividend income would not apply. U.S. Holders of Warrants may not be able to make a mark-to-market election with respect to their Warrants.
The mark-to-market election is available only for “marketable stock,” which is stock that is regularly traded on a qualified exchange or other market, as defined in applicable U.S. Treasury regulations. The ReNew Global Shares, which are expected to be listed on the Nasdaq, are expected to qualify as marketable stock for purposes of the PFIC rules, but there can be no assurance that ReNew Global Shares will be “regularly traded” for purposes of these rules. Because a mark- to-market election cannot be made for equity interests in any Lower-Tier PFICs, a U.S. Holder will continue to be subject to the Excess Distribution Rules with respect to its indirect interest in any Lower-Tier PFICs as described above, even if a mark-to-market election is made for ReNew Global.
If a U.S. Holder does not make a mark- to-market election (or a QEF election) effective from the first taxable year of a U.S. Holder’s holding period for the ReNew Global Shares in which Renew Global is a PFIC, then the U.S. Holder generally will remain subject to the Excess Distribution Rules. A U.S. Holder that first makes a mark-to-market election with respect to the ReNew Global Shares in a later year will continue to be subject to the Excess Distribution Rules during the taxable year for which the mark-to-market election becomes effective, including with respect to any mark-to- market gain recognised at the end of that year. In subsequent years for which a valid mark -to-mark election remains in effect; the Excess Distribution Rules generally will not apply. A U.S. Holder that is eligible to make a mark-to-market election with respect to its ReNew Global Shares may do so by providing the appropriate information on IRS Form 8621 and timely filing that form with the U.S. Holder’s income tax return for the year in which the election becomes effective. U.S. Holders should consult their own tax advisors as to the availability and desirability of making a mark-to-market election, as well as the impact of such election on interests in any Lower-Tier PFICs.
A U.S. Holder of a PFIC may be required to file an IRS Form 8621 on an annual basis. U.S. Holders should consult their own tax advisors regarding any reporting requirements that may apply to them if Renew Global is a PFIC.
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US Holders are strongly encouraged to consult their tax advisors regarding the application of the PFIC rules to their particular circumstances.
Non-US Holders
This section applies to Non-US Holders of ReNew Global Shares and Warrants. For purposes of this discussion, a Non-US Holder means a beneficial owner (other than a partnership or an entity or arrangement so characterised for U.S. federal income tax purposes) of ReNew Global Shares or Warrants that is not a U.S. Holder, including:
US Federal Income Tax Consequences of the Ownership and Disposition of ReNew Global Shares and Warrants to Non-US Holders
Any (i) distributions of cash or property paid to a Non-US Holders in respect of ReNew Global Shares or (ii) gain realised upon the sale or other taxable disposition of ReNew Global Shares and/or Warrants generally will not be subject to U.S. federal income taxation unless:
Gain or distributions described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular income tax rates. A Non-US Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items.
Gain described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty), which may be offset by U.S. source capital losses of the Non-US Holder (even though the individual is not considered a resident of the United States), provided the Non-US Holder has timely filed U.S. federal income tax returns with respect to such losses.
The U.S. federal income tax treatment of a Non-US Holder’s exercise of a Warrant, or the lapse of a Warrant held by a Non-US Holder, generally will correspond to the U.S. federal income tax treatment of the exercise or lapse of a Warrant by a U.S. Holder, as described under “US Holders—Exercise or Lapse of a Warrant,” above, although to the extent a cashless exercise or lapse results in a taxable exchange, the consequences would be similar to those described in the preceding paragraphs above for a Non-US Holder’s gain on the sale or other disposition of ReNew Global Shares and Warrants.
Non-US Holders should consult their own tax advisors regarding potentially applicable income tax treaties that may provide for different rules.
Information Reporting and Backup Withholding
Information reporting requirements may apply to distributions received by U.S. Holders of ReNew Global Shares, and the proceeds received on sale or other taxable disposition of ReNew Global Shares or Warrants effected within the United States (and, in certain cases, outside the United States), in each case other than U.S. Holders that are exempt recipients (such as corporations). Backup withholding may apply to such amounts if the U.S. Holder fails to provide an accurate taxpayer identification number (generally on an IRS Form W- 9 provided to the paying agent of the U.S. Holder’s broker) or is otherwise subject to backup withholding. Any distributions with respect to ReNew Global Shares and proceeds from the sale, exchange, redemption or other disposition of ReNew Global Shares or Warrants may be subject to information reporting to the IRS and possible U.S. backup withholding. U.S. Holders should consult their own tax advisors regarding the application of the U.S. information reporting and backup withholding rules.
Information returns may be filed with the IRS in connection with, and Non -US Holders may be subject to backup withholding on amounts received in respect of, a Non- US Holder’s ReNew Global Shares or Warrants, unless the Non-US Holder furnishes to the applicable withholding agent the required certification as to its non-US status, such as by providing a valid IRS Form W-8BEN, IRS Form W-8BEN-E or IRS Form W-8ECI, as applicable, or the Non-US Holder otherwise establishes an exemption. Distributions paid with respect to ReNew
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Global Shares and proceeds from the sale of other disposition of ReNew Global Shares or Warrants received in the U.S. by a Non-U.S. Holder through certain U.S.-related financial intermediaries may be subject to information reporting and backup withholding unless such Non-US Holder provides proof of an applicable exemption or complies with certain certification procedures described above, and otherwise complies with the applicable requirements of the U.S. backup withholding rules.
U.S. backup withholding is not an additional tax. Amounts withheld as backup withholding generally may be credited against the taxpayer’s U.S. federal income tax liability, and a taxpayer may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for a refund with the IRS and furnishing any required information.
Material United Kingdom Tax Considerations
The following is a general summary of material U.K. tax considerations relating to the ownership and disposal of ReNew Global Shares and Warrants. The comments set out below are based on current U.K. tax law as applied in England and Wales and HM Revenue & Customs, or HMRC, practice (which may not be binding on HMRC) as at the date of this summary, both of which are subject to change, possibly with retrospective effect. They are intended as a general guide and, save where expressly stated otherwise, apply only to absolute beneficial owners of the ReNew Global Shares or Warrants who are (i) individuals not resident in the U.K. for U.K. tax purposes who do not hold ReNew Global Shares or Warrants for the purposes of a trade, profession, or vocation which they carry on in the U.K. through a branch or agency or (ii) companies not resident in the U.K. for U.K. tax purposes which do not hold the ReNew Global Shares or Warrants for the purpose of a trade carried on in the U.K. through a permanent establishment in the U.K., together, “non-U.K. Holders.”
This summary does not address all possible tax consequences relating to an investment in the ReNew Global Shares or Warrants. Certain categories of holders, including those falling outside the category described above (such as those who are resident in the U.K. for U.K. tax purposes), those carrying on certain financial activities, those subject to specific tax regimes or benefitting from certain reliefs or exemptions, those connected with ReNew Global and those for whom the shares are employment-related securities may be subject to special rules and this summary does not apply to such holders and any general statements made in this disclosure do not take them into account.
This summary is for general information only and is not intended to be, nor should it be considered to be, legal or tax advice to any particular investor. It does not address all of the tax considerations that may be relevant to specific investors in light of their particular circumstances or to investors subject to special treatment under U.K. tax law.
Potential investors should satisfy themselves prior to investing as to the overall tax consequences, including, specifically, the consequences under U.K. tax law and HMRC practice of the acquisition, ownership and disposal of the ReNew Global Shares or Warrants in their own particular circumstances by consulting their own tax advisors.
THE FOLLOWING IS FOR INFORMATIONAL PURPOSES ONLY. EACH HOLDER SHOULD CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER OF THE OWNERSHIP AND DISPOSAL OF RENEW GLOBAL SHARES AND WARRANTS, AND OF THE BUSINESS COMBINATION AND AN EXERCISE OF REDEMPTION RIGHTS, INCLUDING THE EFFECTS OF U.K. TAX LAWS.
U.K. Taxation of Dividends
ReNew Global will not be required to withhold amounts on account of U.K. tax at source when paying a dividend in respect of ReNew Global Shares to a non-U.K. Holder.
Non-U.K. Holders who hold their ReNew Global Shares as an investment and not in connection with any trade carried on by them will not be subject to United Kingdom tax in respect of any dividends. There are certain exceptions from United Kingdom tax in respect of dividends on shares held in connection with a trade carried on in the U.K. for trades conducted in the U.K. through independent agents, such as some brokers and investment managers.
U.K. Taxation of Capital Gains
Acquisition of ReNew Global Shares on exercise of the Warrants
A company that is a non-U.K. Holder will generally not be liable to U.K. corporation tax on chargeable gains realised (if any) on the exercise of Warrants.
An individual non- U.K. Holder who is only temporarily a non-U.K. resident for U.K. tax purposes, may, in certain circumstances, become liable to U.K. tax on capital gains in respect of gains realised (if any) while he or she was not resident in the U.K.
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Disposal of ReNew Global Shares or Warrants
A company that is a non-U.K. Holder will generally not be liable for U.K. corporation tax on chargeable gains realised on the disposal of its ReNew Global Shares or Warrants.
An individual non- U.K. Holder who is only temporarily a non-U.K. resident for U.K. tax purposes will, in certain circumstances, become liable to U.K. tax on capital gains in respect of gains realised while he or she was not resident in the U.K.
Stamp Duty and Stamp Duty Reserve Tax
The stamp duty and stamp duty reserve tax, or SDRT, treatment of the issue and transfer of, and the agreement to transfer, ReNew Global Shares or Warrants outside a depositary receipt system or a clearance service are discussed in the paragraphs under “General” below. The stamp duty and SDRT treatment of such transactions into and within such systems are discussed in the paragraphs under “Depositary Receipt Systems and Clearance Services” below. The discussion under the headings below applies to transactions undertaken by any holder of ReNew Global Shares or Warrants (as the case may be).
General
No stamp duty, or SDRT, will arise on the issue of ReNew Global Shares in registered form by ReNew Global (including on exercise of Warrants).
An agreement to transfer ReNew Global Shares or Warrants will normally give rise to a charge to SDRT at the rate of 0.5% of the amount or value of the consideration payable for the transfer (or, in certain circumstances and if it is higher, the market value of the ReNew Global Shares to be transferred in accordance with the relevant agreement). SDRT is, in general, payable by the purchaser.
Instruments transferring ReNew Global Shares or Warrants will generally be subject to stamp duty at the rate of 0.5% of the consideration (or, in certain circumstances and if it is higher, the market value of the ReNew Global Shares transferred by way of the relevant instrument) given for the transfer (rounded up to the next £5). The purchaser normally pays the stamp duty.
If a duly stamped transfer completing an agreement to transfer is produced within six years of the date on which the agreement is made (or, if the agreement is conditional, the date on which the agreement becomes unconditional) any SDRT already paid is generally repayable, normally with interest, and any SDRT charge yet to be paid is cancelled.
Depositary Receipt Systems and Clearance Services
Where ReNew Global Shares or Warrants are issued or transferred (i) to, or to a nominee or an agent for, a person whose business is or includes the provision of clearance services or (ii) to, or to a nominee or an agent for, a person whose business is or includes issuing depositary receipts, SDRT or stamp duty will, subject as described below, generally be payable at the higher rate of 1.5% of the amount or value of the consideration given or, in certain circumstances, the value of the shares.
Following the Court of Justice of the European Union’s decision in C-569/07 HSBC Holdings Plc, Vidacos Nominees Limited v The Commissioners of Her Majesty’s Revenue & Customs and the First-tier Tax Tribunal decision in HSBC Holdings Plc and The Bank of New York Mellon Corporation v. The Commissioners of Her Majesty’s Revenue & Customs, HMRC has published guidance stating that 1.5% SDRT is no longer payable when new shares are issued to a clearance service or depositary receipt system. HMRC’s published guidance confirms that this remains HMRC’s position following the transition period which expired on December 31, 2020 after the withdrawal of the U.K. from the European Union. The U.K. Finance Act 2024 gives statutory effect to HMRC’s published position regarding issues of new shares and other chargeable securities into a clearance service or depository receipt system on or after 1 January 2024 notwithstanding the impact of the Retained EU Law (Revocation and Reform) Act 2023. The U.K. Finance Act 2024 also provides that, in certain circumstances, there is no charge to stamp duty or SDRT on the transfer of, or an agreement to the transfer of, ReNew Global Shares into a clearance service or depositary receipt system. Shareholders should accordingly seek their own advice before paying or accepting such charge
Except in relation to transfers or agreements to transfer within clearance services that have made an election under Section 97A (1) of the Finance Act of 1986, no stamp duty or SDRT is payable in respect of transfers or agreements to transfer within clearance services or depositary receipt systems. Accordingly, no stamp duty or SDRT should, in practice, be required to be paid in respect of transfers or agreements to transfer ReNew Global Shares or the Warrants within the facilities of The Depository Trust Company, or “DTC”.
Any liability for stamp duty or SDRT in respect of any transfer into a clearance service or depositary receipt system, or in respect of a transfer within any clearance service or depositary receipt system, which does arise will strictly be accountable by the clearance service
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or depositary receipt system operator or their nominee, as the case may be, but will, in practice, be payable by the participants in the clearance service or depositary receipt system.
Material India Tax Considerations
The following is a summary of the material Indian income tax consequences of the purchase, ownership and disposal of the ReNew Global Shares for non- resident investors of the ReNew Global Shares. The summary only addresses the tax consequences for non-resident investors who hold the ReNew Global Shares as capital assets and does not address the tax consequences which may be relevant to other classes of non- resident investors, including dealers. The summary proceeds on the basis that the investor continues to remain a non-resident when the income by way of dividends and capital gains are earned. The summary is based on the ITA and relevant interpretations thereof as are in force as of the date of this Report.
This summary is not intended to constitute a complete analysis of all the tax consequences for a non-resident investor under Indian law in relation to the acquisition, ownership and disposal of the ReNew Global Shares and does not deal with all possible tax consequences relating to an investment in the ReNew Global Shares, such as the tax consequences under state, local and other (for example, non-Indian) tax laws.
THE FOLLOWING IS FOR INFORMATIONAL PURPOSES ONLY. EACH HOLDER SHOULD CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH HOLDER OF THE BUSINESS COMBINATION AND AN EXERCISE OF REDEMPTION RIGHTS, INCLUDING THE EFFECTS OF INDIA TAX LAWS.
Residence
For the purpose of the ITA, an individual is considered to be a resident of India during fiscal year if he is in India for at least 182 days in a particular year or at least 60 days in a particular year and for a period or periods aggregating at least 365 days in the preceding four (4) years. However, the 60 days period shall be read as 182 days in the case of (i) a citizen of India who leaves India in the previous year for employment outside India, or (ii) a citizen of India or a person of Indian origin who being outside India visits India and does not have India sourced income of more than Rs. 1,500,000 in the relevant year. The 60 days period shall be read as 120 days in the case of a citizen of India or a person of India origin living who being outside India comes on visit to India and has India sourced income of more than Rs. 1,500,000 in the relevant year. A company is considered to be resident in India if it is incorporated in India or (ii) its POEM is in India. Comprehensive guidelines for determination of POEM have been issued by the Indian Income Tax department, the Indian Income Tax department has further clarified that guidelines regarding POEM shall not be applicable to companies having turnover or gross receipts of Rs. 500 million or less in a financial year. Individuals and companies who are not residents of India based on the above-mentioned criteria are treated as non-residents.
Taxation of Sale of the ReNew Global Shares
As per the provisions of the ITA, income arising to a non-resident in India through the transfer of a capital asset being shares or interest in a company or entity registered or incorporated outside India, is subject to tax in India, if such share or interest derives, directly or indirectly, its value substantially from the assets located in India. The share or interest in a company or entity registered or incorporated outside India is deemed to be deriving substantial value from the assets located in India if, on the specified date, the value of such assets (i) represents at least 50% of the value of all assets owned by the company or entity, and (ii) exceeds the amount of Rs. 100 million. An exception is available under the ITA for shareholders who neither hold more than 5% of voting power or share capital or interest in the company or the entity as the case may be, nor hold any right of management or control in the company or the entity either individually or together with its associated enterprises (as defined under the ITA), at any time in 12 months preceding the date of transfer. Similarly, non-residents from a jurisdiction with whom India have a tax treaty may evaluate the benefit available under such tax treaty, if any.
Accordingly, the shareholders of ReNew Global who are non-residents of India will be subject to tax in India at the time of transfer of shares in ReNew Global if ReNew Global derives substantial value from the assets located in India unless the relevant shareholder is eligible for the exemption as discussed above under the ITA or the applicable tax treaty. As on the date of the Exchange, ReNew Global derives substantial value from India. ReNew Global Shares will be considered as long-term capital assets if they are held for a period of more than 24 months otherwise they will be considered as short-term capital assets. ITA provides that income by way of long-term capital gains arising from the transfer of ReNew Global Shares by the non-resident shareholder is taxable at the rate of 10.0% plus applicable surcharge and education cess (Union Budget 2024-25 has proposed to change this rate to 12.5% plus applicable surcharge and cess with effect from 23 July 2024); short term capital gains on such a transfer is taxed at the rate of 30.0% (40.0% in case of a foreign company, Union Budget 2024-25 has proposed to change this rate to 35% plus applicable surcharge and cess with effect from 1 April 2024) plus applicable surcharge and education cess. The buyer of ReNew Global Shares would have an obligation to withhold applicable tax and deposit such tax with the Indian Income Tax treasury.
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Taxation of Dividends
Dividend distributed by an Indian company is taxable in the hands of its shareholders. The Indian company is required to withhold tax at 10.0% prior to distribution of dividend to Indian resident shareholders and at 20.0% plus applicable surcharge and cess prior to distribution of dividend to non-Indian resident shareholders subject to benefit, if any, under applicable double taxation avoidance agreement. Accordingly, where ReNew Global receives dividend on equity shares held in the Indian company, ReNew Global will be subject to an Indian withholding tax of 20.0% (plus surcharge and cess) subject to ReNew Global being eligible to reduced rate of 10.0% under the India-U.K. double taxation avoidance agreement. Any dividend distribution by ReNew Global to its non-resident shareholders shall not be subject to tax in India.
Taxation of Sale of the Equity Shares
Sale of equity shares held by ReNew Global in an Indian company held as capital asset shall be subject to capital gains tax in India. Capital gains accruing to ReNew Global on the sale of unlisted equity shares, whether to an Indian resident or to a person resident outside India and whether in India or outside India, shall be taxed at the rate of 10.0% plus surcharge and cess (Union Budget 2024-25 has proposed to change this rate to 12.5% plus applicable surcharge and cess with effect from 23 July 2024) where the shares have been held for a period of more than 24 months otherwise at the rate of 40.0% plus surcharge and cess (Union Budget 2024-25 has proposed to change this rate to 35% plus applicable surcharge and cess with effect from 1 April 2024). The buyer of such shares would have an obligation to withhold applicable tax and deposit such tax with the Indian Income Tax treasury.
MAT
As per the ITA, if the tax payable by a corporate entity is less than 15.0% of its book profits, it shall be liable to pay MAT at the rate of 15.0% (plus applicable surcharge and cess) of such book profit.
The MAT provisions are not applicable to a foreign company if, (a) it is a resident of a country with which India has a tax treaty and it does not have a Permanent Establishment in India; or (b) it is a resident of a country with which India does not have a tax treaty and is not required to seek registration under the Indian corporate law.
Capital Losses
The losses arising from a transfer of a capital asset in India can only be set off against capital gains and not against any other income in accordance with the ITA. A long-term capital loss may be set off only against a long-term capital gain. To the extent the losses are not absorbed in the year of transfer, they may be carried forward for a period of eight years immediately succeeding the year for which the loss was first computed and may be set off against the long -term capital gains assessable for such subsequent years. In order to get the benefit of set-off of the capital losses in this manner, the non-resident investor must file appropriate and timely tax returns in India.
Buy-Back of Securities
Indian companies buying back the shares are liable to pay tax on the distributed income at 20.0% (plus applicable surcharge and cess). Distributed income is computed as (i) consideration paid by the Indian company on buy back of shares reduced by the (b) amount that was received by the Indian company on issue of such shares. The shareholders shall be exempt from any further Indian tax on the buy-back of shares by the Indian company. Accordingly, ReNew Global on buy back of its shares held in the Indian company by the Indian company would be exempt from Indian tax whereas the Indian company would be liable to pay tax at 20.0% (plus applicable surcharge and cess). The tax on the distributed income by the Indian company shall be treated as the final payment of tax in respect of the said income and no further credit in India therefore shall be claimed in respect of the amount of tax so paid.
It has been proposed by Union Budget 2024-25 that with effect from 1 October 2024, pay-out on buy-back of shares by Indian company shall be treated as deemed dividend and shall be chargeable to tax in the hands of the recipient shareholder at applicable tax rate. On extinguishment of such shares on buy-back, the capital loss generated towards of cost of acquisition of such shares shall be allowed to the shareholder for set-off against capital gains. Accordingly, proceeds received by ReNew Global on buy back of its shares held in the Indian company by the Indian company would be taxable at the rate of 20% plus applicable surcharge and cess.
Effects of the Business Combination
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The ITA provides that profits and gains arising from the transfer of a capital asset shall be charged to tax as income under the head capital gains in the year in which transfer takes place. Transfer has been defined, inter alia, to include sale or exchange of an asset. Transfer of shares of the Indian company to ReNew Global shall be subject to capital gains tax in the hands of the shareholders of the Indian company who will be transferring such shares under the provisions of the ITA. To the extent such shareholders are Indian residents, ReNew Global shall not be required to withhold tax on transfer of shares of the Indian Company to ReNew Global. In case of non-residents from an Indian perspective, ReNew Global shall have an obligation to withhold applicable tax and deposit such tax with the Indian Income Tax treasury. The above-mentioned capital gains tax implications in the hands of the non-resident shareholders under the ITA may be subject to tax treaty benefit, if any, under the relevant tax treaty between India and the country of residence of relevant non -resident shareholder transferring shares of such Indian company. Therefore, to the extent the non- resident shareholders transferring the shares in the Indian company are tax residents of a jurisdiction where under the applicable tax treaty, capital gains are not taxable in India, ReNew Global shall not be required to withhold taxes on the transfer of shares of the Indian company to ReNew Global.
Shares of the unlisted Indian company will be considered as long-term capital assets if they are held for a period of more than 24 months otherwise they will be considered as short-term capital assets. ITA provides that income by way of long-term capital gains arising from the transfer of such shares by non -residents shall be taxable at the rate of 10.0% plus applicable surcharge and education cess (Union Budget 2024-25 has proposed to increase this rate to 12.5% with effect from 23 July 2024); short term capital gains on such a transfer is taxed at the rate of 30.0% (40.0% in case of a foreign company, Union Budget 2024-25 has proposed to change this rate to 35% plus applicable surcharge and cess with effect from 1 April 2024) plus applicable surcharge and education cess.
General Anti Avoidance Rule
Under the General Anti-Avoidance Rule, or “GAAR” of ITA, the Indian tax authority may declare an arrangement as an impermissible avoidance arrangement if the main purpose of such an arrangement is to obtain a tax benefit and the arrangement is not entered at arm’s length, results in misuse/abuse of provisions of ITA, lacks commercial substance or the is entered into by means or in a manner not ordinarily employed for bona fide business purpose. If any of the transactions are found to be ‘impermissible avoidance arrangements’ under GAAR, it could result in denial of tax benefit under the ITA and / or under the applicable double taxation avoidance agreement, among other consequences, and the business may be affected.
Stamp Duty
An Indian company issuing equity shares is required to pay stamp duty in accordance with the applicable state/ union territory specific Indian stamp duty law. A sale of equity shares of an Indian company by a shareholder, either physically or in dematerialised mode, will be subject to Indian stamp duty at the rate of: (a) 0.015% of the market value of equity shares if the transfer of equity shares is on delivery basis; and (b) 0.003% of the market value of equity shares if the transfer of equity shares is on non-delivery basis. As per the Indian stamp duty law, such duty is required to be borne by the transferor of the equity shares.
Tax Credit
A non -resident investor may be entitled to a tax credit with respect to any withholding tax paid by the Indian company or any other person for such non-resident investor’s account in accordance with the applicable laws of the applicable jurisdiction.
Not applicable.
Not applicable.
We are subject to certain of the informational filing requirements of the Exchange Act. Since we are a “foreign private issuer,” we are exempt from the rules and regulations under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act, with respect to their purchase and sale of our shares. In addition, we are not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we are required to file with the SEC an Annual Report on Form 20-F containing financial statements audited by an independent accounting firm. We also furnish to the SEC, on Form 6-K, unaudited financial information after each of our first three fiscal quarters. The
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SEC also maintains a website at http://www.sec.gov that contains reports and other information that we file with or furnish electronically with the SEC.
Not applicable.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our businesses are subject to several risks and uncertainties including commodity price risk and financial risks such as liquidity, foreign currency, interest rate and credit risk. See Note 45 to our audited consolidated financial statements included in this Report for disclosures on financial instruments and market risk.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not applicable.
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PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Material Modifications to the Rights of Security Holders
There have been no material modifications to the rights of securities holders.
Use of proceeds
Not applicable.
ITEM 15. CONTROLS AND PROCEDURES
As required by Rules 13(a)-15(f) and 15(d)-15(f) under the Exchange Act, management, including our Group’s Chief Executive Officer and our Group’s Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 20-F. Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarised and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Group’s principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding our required disclosure.
Based on their evaluation as of March 31, 2024, our Group’s Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as defined in Rules 13(a)-15(f) and 15(d)-15(f) under the Exchange Act were effective as at March 31, 2024.
Our Management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed by, or under the supervision of, our Group’s Chief Executive Officer and Chief Financial Officer and effected by our management and other personnel to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external reporting purposes in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB. Our internal control over financial reporting is supported by written policies and procedures that:
Our Management recognises that there are inherent limitations in the effectiveness of any system of internal control over financial reporting, including the possibility of human error and the circumvention or override of internal control. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect all misstatements and can only provide reasonable assurance with respect to the preparation and presentation of our financial statements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Our Management conducted an assessment of the effectiveness of internal control over financial reporting based on the framework established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment included evaluation of such elements as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and the Company’s overall control environment. Based on this assessment, management concluded that the internal control over financial reporting were effective as of March 31, 2024.
Remediation of Material Weakness
Our Management had identified that there were material weaknesses in its internal control over financial reporting for Fiscal 2023 due to: delayed performance of review controls and absence of adequate evidence with respect to operation of review controls, including those related to significant estimates and financial statement close process, such as control attributes, the precision levels applied, and completeness and accuracy of data and reports used; and inadequate segregation of duties for recording and review of manual journal entries.
During the course of the year, we have implemented several steps to remediate the material weaknesses described in this Item 15 and to enhance our overall control environment. The remediation steps included: -
As a result of the above, certain new controls were implemented, and certain existing controls were modified including requirement to maintain additional evidences to support the existing controls. On the basis of the same, our management concluded that the material weaknesses in internal control over financial reporting for Fiscal 2023 were successfully remediated as of March 31, 2024.
The effectiveness of our internal control over financial reporting as at March 31, 2024 has been audited by S.R. Batliboi & Co. LLP, an independent registered public accounting firm, as stated in its report which is reproduced in its entirety in Item 15(c) below.
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of ReNew Energy Global Plc
Opinion on Internal Control Over Financial Reporting
We have audited ReNew Energy Global Plc’s internal control over financial reporting as of March 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, ReNew Energy Global Plc (the Company) maintained, in all material respects, effective internal control over financial reporting as of March 31, 2024, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statement of financial position of the Company as of March 31, 2024 and 2023, the related consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for each of the three years in the period ended March 31, 2024, and the related notes and our audit report dated July 30, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
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The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting 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 control over financial reporting 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 authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/
July 30, 2024
d. Changes in Internal controls over Financial Reporting
Our Management has evaluated, with the participation of our Group Chief Executive Officer and our Group Chief Financial Officer, whether any changes in our internal control over financial reporting that occurred during our last fiscal year have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on the evaluation we conducted, except for the remediation efforts described above in respect of the material weaknesses identified in the previous year, management has concluded that no such changes have occurred in fiscal year 2024.
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Our Board of Directors has determined that one member of our Audit Committee, Mr. Manoj Singh, is an audit committee financial expert, as defined under the rules under the Exchange Act, and is independent in accordance with applicable Exchange Act rules and the Nasdaq Listing Rules.
ITEM 16B. CODE OF ETHICS
We have adopted a Code of Ethics that applies to all of our employees, officers, and directors. The full text of our Code of Ethics is posted on our website at https://www.renew.com/. We intend to disclose on our website any future amendments of the Code of Ethics or waivers that exempt any principal executive officer, principal financial officer, principal accounting officer or controller, persons performing similar functions, or our directors from provisions in the Code of Ethics.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
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Our financial statements are prepared in accordance with IFRS as issued by the IASB and are audited by S.R. Batliboi & Co. LLP, Chartered Accountants (“SRB”), a firm registered with the Public Company Accounting Oversight Board in the United States and an Indian firm of Chartered Accountants registered with the Institute of Chartered Accountants of India.
The following table shows the aggregate fees for the professional services and other services rendered by SRB and the various member firms of SRB to us, including our subsidiaries, in the years ended March 31, 2023 and 2024.
|
|
For the year ended March 31, |
|
||||||
Particulars |
|
2023 |
|
|
2024 |
|
|
2024 |
|
|
|
(Rs. in millions) |
|
|
(US$ in millions) |
|
|||
Audit fees (audit and review of financial statements) |
|
112 |
|
|
142 |
|
|
2 |
|
Audit-related fees (including other miscellaneous audit related certifications) |
|
19 |
|
|
22 |
|
|
0 |
|
Tax fees (tax audit, other certifications and tax advisory services) |
|
1 |
|
|
1 |
|
|
0 |
|
All other fees (advisory services) |
|
4 |
|
|
3 |
|
|
0 |
|
Total |
|
136 |
|
|
168 |
|
|
2 |
|
All other fees (advisory services) represent permissible services with respect to assessing the approach towards carbon pricing.
Audit Committee Pre-approval Process
Our Audit Committee reviews and pre-approves the scope and the cost of audit services related to us and permissible non-audit services performed by the independent auditors, other than those for de-minimis services which are approved by the Audit Committee prior to the completion of the audit. All of the services related to our Company provided by SRB during its tenure have been approved by the Audit Committee.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
See section titled “Board Practices — Foreign Private Issuer Status” under Item 6.C.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Company Purchases of Class A Ordinary Shares from open market
At a general meeting held on August 20, 2021, our shareholders approved the forms of share repurchase contracts and counterparties with whom such contracts may be entered into for the purpose of making repurchases of our Class A Ordinary Shares. These approvals are valid for five years. On February 2, 2022, the Company’s Board of Directors approved the proposal to commence a share repurchase program of up to $250 million Class A Ordinary Shares (the “Share Repurchase Program”) by way of open market purchases. Thereafter, the company entered into an agreements with Credit Suisse Securities (USA) LLC and Mizuho Securities USA LLC, as our brokers (the “Brokers”) for the purchase, on a principal basis, of Class A Ordinary Shares, for subsequent sale and delivery to the Company. The Share Repurchase Program does not obligate the Company to acquire any particular amount of Class A Ordinary Shares and may be suspended or discontinued at any time. Acquisitions for the share repurchase program are made at management’s discretion, at prevailing prices, subject to market conditions and other factors. Repurchases may be increased, decreased or discontinued at any time without prior notice. Shares repurchased under the plan are held as treasury shares.
Up to March 31, 2023, the Brokers had purchased 28,010,273 Class A Ordinary Shares (par value US$0.0001 each) from the open market for the purposes of the Share Repurchase Program for aggregate consideration of $179,695,085. During the year ended March 31, 2024, the Brokers purchased 10,688,015 Class A Ordinary Shares for an aggregate consideration of 59,543,536. As of March 31, 2024, we held 38,698,288 Class A Ordinary Shares as treasury shares, which were purchased in exchange for aggregate consideration of US$ 239,238,621. An overview of the repurchase of shares is provided below:
Month |
Total number of Shares purchased |
Average price paid per share |
Total number of shares purchased as part of a publicly announced repurchase plan |
Maximum dollar value of shares that may yet be purchased under the plan |
April |
2,134,681 |
5.56 |
30,144,954 |
59,139,208 |
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May |
1,692,850 |
5.44 |
31,837,804 |
49,932,423 |
June |
1,282,180 |
5.49 |
33,119,984 |
42,888,873 |
July |
1,303,148 |
5.71 |
34,423,132 |
35,452,364 |
Aug |
508,289 |
6.04 |
34,931,421 |
32,380,692 |
Sep |
1,024,396 |
5.78 |
35,955,817 |
26,461,629 |
Oct |
2,092,741 |
5.33 |
38,048,558 |
15,306,806 |
Nov |
649,730 |
5.92 |
38,698,288 |
11,461,636 |
Total |
10,688,015 |
|
|
|
*There were no repurchases of Class A Ordinary Shares from company employees in connection with the company’s broad-based employee incentive plans.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 16G. CORPORATE GOVERNANCE
We are subject to the Nasdaq corporate governance listing standards. As a foreign private issuer, however, Nasdaq Rule 5615(a)(3) allows us to follow the practice in our home country, England and Wales, in lieu of certain Nasdaq corporate governance standards. A summary of the significant differences between our corporate governance practices and those required of U.S. listed companies is set out in section “Board Practices — Foreign Private Issuer Status” under Item 6.C.
Compensation Committee
Nasdaq rules require that a compensation committee comprises solely of independent directors governed by a compensation committee charter overseeing executive compensation. English law does not require us to have a compensation committee. Our Remuneration Committee currently consists of (i) three independent directors and (ii) one director appointed by a Shareholders Agreement Investor that has a director appointment right.
Nomination of Directors
Nasdaq rules require that director nominees be selected or recommended for selection by either a majority of the independent directors or a nominations committee comprising solely independent directors. English law does not require this of us. Our Nomination and Board Governance Committee currently consists of (i) three independent directors, (ii) one director appointed by a Shareholders Agreement Investor that has a director appointment right and (iii) the director appointed by the Founder Investors.
Meetings of Independent Directors
Nasdaq rules require that the independent directors have regularly scheduled meetings with only the independent directors present. English law does not require this of us.
Quorum
We follow the requirements of English law with respect to the quorum for meetings of our shareholders, which are different from the requirements of the Nasdaq rules. Under the ReNew Global Articles, the quorum for a general meeting is two qualifying persons entitled to vote or, if there is only one member entitled to vote at the relevant time, one qualifying person entitled to vote.
A “qualifying person” means (a) an individual who is a member of the Company, (b) a person authorised to act as the representative of a corporation in relation to the meeting, or (c) a person appointed as a proxy of a member in relation to the meeting, or if that person is a corporation, the authorised representative of the corporation in relation to the meeting.
Shareholder Approval for Issuance of Securities
Nasdaq Rule 5635 requires a listed issuer to obtain shareholder approval prior to an issuance of securities in connection with: (i) the acquisition of the stock or assets of another company; (ii) equity-based compensation of officers, directors, employees or consultants; (iii) a change of control; and (iv) certain transactions other than public offerings. English law does not require this of us.
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The U.K. Companies Act permits our directors to allot (or grant rights to subscribe for or to convert any security into) shares in the Company only with prior authorization granted by an ordinary resolution of our shareholders (being a resolution passed by a majority of the votes cast) or in the ReNew Global Articles. This authorization must state the aggregate nominal amount of shares that it covers, can be valid up to a maximum period of five years and can be varied, renewed or revoked by shareholders. An exception applies in respect of the allotment of shares in pursuance of an employees' share scheme (as defined in the U.K. Companies Act).
In addition, subject to certain limited exceptions, the U.K. Companies Act provides shareholders with pre-emption rights when new ordinary shares in the Company are allotted (or rights to subscribe for, or to convert securities into, such ordinary shares are granted, or such ordinary shares held as treasury shares are sold) wholly for cash. However, it is possible for these pre-emption rights to be disapplied by the ReNew Global Articles or special resolution of shareholders (being a resolution passed by at least 75% of the votes cast). Such a disapplication of pre-emption rights cannot apply for longer than the duration of the authority to allot shares to which it relates.
Pursuant to a resolution approved by the shareholders of the company on August 20, 2021, the Board has authority to allot (or grant rights to subscribe) shares in the Company, in respect of which shareholders’ statutory pre-emption rights have been disapplied, for five-year period i.e. until August 20, 2026. This included an authority to grant awards under the 2021 Incentive Plan and the Non-Employee 2021 Incentive Plan in respect of an aggregate nominal value up to US$ 6,503.02 (equivalent to 65,030,200 Shares). At our 2023 annual general meeting held on September 12, 2023, our shareholders passed resolution authorizing our directors for increasing the nominal value to which it applies by US$ 2,296.98 (equivalent to 22,969,800 Shares) to a revised limit of up to US$ 8,800.00 (equivalent to 88,000,000 Shares) and expires on the fifth anniversary of the date on which the resolution is passed to refresh this allotment authority to reflect the increase in the share limits under the Company’s incentive award i.e. until September 12, 2028.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable
ITEM 16J. INSIDER TRADING POLICIES
ITEM 16K. CYBERSECURITY
We are committed to safeguarding data related to our customers, partners, and employees and have adopted processes and practices to assess, identify and manage cybersecurity risks.
Risk Management and Strategy
We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan.
Our cybersecurity risk management program is integrated into our overall risk management process and shares common methodologies, reporting channels and governance processes that apply across the risk management process to other legal, compliance, strategic, operational, and financial risk areas.
Our cybersecurity risk management program includes a cybersecurity defence system, a monitoring program on our corporate network and connections with any third-party service providers, ongoing evaluation of our security measures by internal and external resources, a cybersecurity crisis management plan that includes procedures for responding to cybersecurity incidents and regular cybersecurity awareness training sessions for our employees.
Our cybersecurity team is responsible for monitoring our applications, platforms, and infrastructure, and identifying and responding to potential security issues, including emerging cybersecurity threats. We have implemented processes for assessing, identifying, and
180
managing material risks from cybersecurity threats and monitoring the prevention, detection, mitigation, and remediation of material cybersecurity incidents. We also engage third parties, where appropriate, to assess, test or otherwise assist with aspects of our security controls, such as for penetration test services, on-site security maintenance services and cloud-based security services.
As of the date of this Annual Report, we have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
Governance
Our Board is responsible for overseeing management’s implementation of our cybersecurity risk management program, including the effectiveness of the process and measures adopted by our company to manage risks related to cybersecurity. Our Board and our audit committee also receive periodic updates on our cybersecurity risk management program from our senior management and our cybersecurity team, including on material cybersecurity incidents, incident analyses and strategic recommendations.
Our management team is responsible for assessing and managing our material risks from cybersecurity threats, while our cybersecurity team is responsible for aligning our cybersecurity risk management program with our overall security strategy, monitoring potential cybersecurity risks and developing and implementing comprehensive risk prevention, detection, mitigation and remediation measures. Our cybersecurity team is led by our Head of Cybersecurity and overseen by our Head of Digital. Our Head of Cybersecurity has over 17 years of experience in various technology roles. Our Head of Digital holds a B.E. from University of Rajasthan, specializing in computer science, and has over 21 years of experience in technology and cybersecurity. Our Head of Digital and Head of Cybersecurity each have extensive experience in risk assessment, secure software development, security governance and incident management. Other members of our cybersecurity team have diverse expertise in areas such as threat intelligence, incident response and secure software development.
Our cybersecurity measures include:
181
PART III
ITEM 17. FINANCIAL STATEMENTS
We have elected to provide financial statements and related information pursuant to section titled “Financial Statements” Item 18.
ITEM 18. FINANCIAL STATEMENTS
The following financial statements are filed as part of this Report, together with the report of the independent registered public accounting firm:
These financial statements are not the Company’s statutory accounts as defined in section 434 of the U.K. Companies Act. Statutory accounts for the year ended March 31, 2024 have not yet been delivered to the Registrar of Companies for England and Wales. Statutory accounts for the year ended March 31, 2023 have been delivered to the Registrar in accordance with section 441 of the Companies Act 2006 and an auditor’s report has been made on them and was unqualified, did not include any reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report, and contained no statement under section 498(2) or (3) of the Companies Act 2006.
182
ITEM 19. EXHIBITS
183
† Previously filed
* Filed herewith
184
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorised the undersigned to sign this Annual Report on Form 20-F filed on its behalf.
Date: July 30, 2024 |
ReNew Energy Global Plc |
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By: |
/s/ Sumant Sinha |
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Name: Sumant Sinha |
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Title: Chief Executive Officer |
185
INDEX TO FINANCIAL STATEMENTS
F-1
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of ReNew Energy Global Plc
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position of ReNew Energy Global Plc (the “Company”) as of March 31, 2024 and 2023, the related consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for each of the three years in the period ended March 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2024, in conformity with International Financial Reporting Standards as issued by the International Accounting Standard Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of March 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated July 30, 2024, expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
|
Impairment of Goodwill for Ostro group |
Description of the Matter |
As described in notes 4.1(o) and 6 to the consolidated financial statements, Company has goodwill which is allocated to the Company’s cash generating units (CGUs) or group of CGUs, which, if they contain goodwill, are tested at least annually for impairment by comparing the CGUs carrying amount to its recoverable amount, which is determined to be the higher of its fair value less costs of disposal and its value in use (VIU). When the carrying amount of a CGU exceeds the recoverable amount, the carrying amount is written down to the recoverable amount. Auditing the Company’s annual impairment assessment of CGUs of the Ostro Energy group which included a goodwill of INR 9,903 million, was complex and highly judgmental due to the significant estimation and judgement required to determine the recoverable amount of group of CGUs, using discounted cash-flow models. In particular, the Company’s determination of the VIU was sensitive to significant assumptions, such as the Plant Load Factor (PLF), a measure of average capacity utilization of a power plant used in |
F-2
|
revenue projections, future operating and maintenance expenses and discount rates. These assumptions are forward-looking and are affected by future economic and market conditions as well as industry specific factors, like future wind speed. |
How We Addressed the Matter in Our Audit |
We obtained an understanding, evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s impairment assessment process including controls over the determination of key inputs such as forecast of PLF used in determining revenue projections and future operating and maintenance expenses and discount rates applied to future cash flows.
To test the assumptions used for determining the VIU, our audit procedures included, among others, testing the Company's forecast of PLF used in determining revenue projections and future operating and maintenance expenses by comparing to historical Company trends and evaluated whether changes to these significant assumptions would impact the impairment conclusion. We also evaluated the scope, competency, and objectivity of the external specialists engaged by the Company to assist in determining future PLF and the related discount rates and computation of VIU by considering the scope of work that they were engaged to perform, their professional qualifications, experience, use of industry accepted methodology and remuneration structure. We also engaged our valuation specialists to assist us in evaluating the methodology used and discount rate applied to calculate the recoverable value including performing sensitivity analyses on such key inputs. We also evaluated the adequacy of the Company’s disclosures in relation to these matters. |
/s/ S. R. Batliboi & Co. LLP
We have served as the Company’s auditor since 2011.
Gurugram, India
July 30, 2024
F-3
ReNew Energy Global Plc 0 0 0
Consolidated statement of financial position
(INR and USD amounts in millions, except share and par value data)
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As at March 31, |
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As at March 31, |
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Notes |
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2023(1) |
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2024 |
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2024 |
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(INR) |
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(INR) |
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(USD) |
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Assets |
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||||
Non-current assets |
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|
||||
Property, plant and equipment |
5 |
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||||
Intangible assets |
6 |
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Right of use assets |
7 |
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Investment in jointly controlled entities |
8 |
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Trade receivables |
9 |
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Investments |
10 |
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||||
Other financial assets |
11 |
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Deferred tax assets (net) |
12 |
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Tax assets |
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Contract assets |
53 |
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Other non-financial assets |
13 |
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Total non-current assets |
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||||
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Current assets |
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Inventories |
14 |
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|
||||
Trade receivables |
9 |
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||||
Investments |
10 |
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|
||||
Cash and cash equivalents |
15 |
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|
||||
Bank balances other than cash and cash equivalents |
15 |
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|
||||
Other financial assets |
11 |
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|
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Contract assets |
53 |
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Other non-financial assets |
13 |
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||||
|
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|
|||
Assets held for sale |
35 |
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|
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— |
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— |
|
||
Total current assets |
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||||
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|
|||
Total assets |
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||||
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|
|||
Equity and liabilities |
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||||
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|
|||
Equity |
|
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|
||||
Issued capital |
16 |
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|
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Share premium |
16 |
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|
||||
Retained losses |
17A |
|
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( |
) |
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( |
) |
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( |
) |
|
Other components of equity |
17B |
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|
|||
Equity attributable to equity holders of the parent |
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|
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Non-controlling interests |
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|
||||
Total equity |
|
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|
||||
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|
|||
Non-current liabilities |
|
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|
|
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|
||||
Interest-bearing loans and borrowings |
|
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|
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|
||||
- Principal portion |
18 |
|
|
|
|
|
|
|
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|
||||
Lease liabilities |
19 |
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|
|
|
|
|
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|
||||
Other financial liabilities |
20 |
|
|
|
|
|
|
|
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|
||||
Provisions |
22 |
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|
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|
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|
||||
Deferred tax liabilities (net) |
12 |
|
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|
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|
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|
||||
Other non-financial liabilities |
21 |
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|
||||
Total non-current liabilities |
|
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|
||||
|
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|
||||
Current liabilities |
|
|
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|
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|
|
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|
|
||||
Interest-bearing loans and borrowings |
|
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|
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|
||||
- Principal portion |
23 |
|
|
|
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|
|
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|
||||
- Interest accrued |
|
|
|
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|
|
|
|
|
|
||||
Lease liabilities |
19 |
|
|
|
|
|
|
|
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|
||||
Trade payables |
24 |
|
|
|
|
|
|
|
|
|
||||
Other financial liabilities |
20 |
|
|
|
|
|
|
|
|
|
||||
Tax liabilities (net) |
|
|
|
|
|
|
|
|
|
|
||||
Other non-financial liabilities |
21 |
|
|
|
|
|
|
|
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|
||||
|
|
|
|
|
|
|
|
|
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|
||||
Liabilities directly associated with the assets held for sale |
35 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Total current liabilities |
|
|
|
|
|
|
|
|
|
|
||||
Total liabilities |
|
|
|
|
|
|
|
|
|
|
||||
Total equity and liabilities |
|
|
|
|
|
|
|
|
|
|
||||
Summary of material accounting policies |
4.1 |
|
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|
||||
(1) refer Note 2.4 for changes in presentation and disclosure made by the Group
The accompanying notes are an integral part of the consolidated financial statements
F-4
ReNew Energy Global Plc
Consolidated statement of profit or loss and other comprehensive income
(INR and USD amounts in millions, except share and par value data)
|
|
|
|
For the year ended March 31, |
|
|||||||||||||
|
Notes |
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||||
|
|
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
||||
Income |
|
|
|
|
|
|
|
|
|
|
|
|
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|
||||
Revenue |
|
25 |
|
|
|
|
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|
|
|
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|
||||
Other operating income |
|
26 |
|
|
|
|
|
|
|
|
|
|
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|
||||
Late payment surcharge from customers |
|
27 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Finance income and fair value change in derivative instruments |
|
28 |
|
|
|
|
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|
|
|
|
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|
||||
Other income |
|
29 |
|
|
|
|
|
|
|
|
|
|
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|
||||
Change in fair value of warrants |
|
39 |
|
|
— |
|
|
|
|
|
|
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|
|||
Total income |
|
|
|
|
|
|
|
|
|
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|
|
|
||||
|
|
|
|
|
|
|
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|
|
|
|
|
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|
||||
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
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|
||||
Raw materials and consumables used (refer Note 53) |
|
|
|
|
|
|
|
|
|
|
|
|
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|
||||
Employee benefits expense |
|
30 |
|
|
|
|
|
|
|
|
|
|
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|
||||
Depreciation and amortisation |
|
31 |
|
|
|
|
|
|
|
|
|
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|
||||
Other expenses |
|
32 |
|
|
|
|
|
|
|
|
|
|
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|
||||
Finance costs and fair value change in derivative instruments |
|
33 |
|
|
|
|
|
|
|
|
|
|
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|
||||
Change in fair value of warrants |
|
39 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Listing and related expenses |
|
51 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Total expenses |
|
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|
||||
|
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|
||||
Profit / (loss) before share of (loss) / profit of jointly controlled entities and tax |
|
|
|
( |
) |
|
|
( |
) |
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|
|||
|
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|
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|
||||
Share of (loss) / profit of jointly controlled entities |
|
50 |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
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|
|
|
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|
||||
Profit / (loss) before tax |
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
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|
||
Income tax expense |
|
12C |
|
|
|
|
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|
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|
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|
||||
Current tax |
|
|
|
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|
|
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|
||||
Deferred tax |
|
|
|
|
|
|
|
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|
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|
||||
|
|
|
|
|
|
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|
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|
||||
Profit / (loss) for the year (a) |
|
|
|
|
( |
) |
|
|
( |
) |
|
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|
||
|
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|
||||
Other comprehensive income |
|
|
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|
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|
|
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|
||||
Other comprehensive income that may be reclassified to profit or loss in subsequent periods (net of tax): |
|
|
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|
||||
|
|
|
|
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|
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|
|
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|
||||
Net (loss) / gain on cash flow hedges |
|
|
|
|
|
|
|
|
|
|
|
|
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|
||||
Net (loss) / gain on cash flow hedge reserve |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Net loss on cost of hedge reserve |
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total net (loss) / gain on cash flow hedges |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Income tax effect |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
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|
|||
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Exchange differences on translation of foreign operations |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Net other comprehensive (loss) / income that may be reclassified to profit or loss in subsequent periods (b) |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
||||
Other comprehensive income that will not be reclassified to profit or loss in subsequent periods (net of tax): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Re-measurement (loss) / gain of defined benefit plan |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Income tax effect |
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
Net other comprehensive (loss) / income that will not be reclassified to profit or loss in subsequent periods (c) |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Other comprehensive (loss) / income for the year, net of tax (d) = (b) + (c) |
|
|
|
|
|
|
|
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|
|
( |
) |
|
|
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total comprehensive income / (loss) for the year, net of tax (a) + (d) |
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Profit / (loss) attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity holders of the parent |
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
Non-controlling interests |
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total comprehensive income / (loss) attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity holders of the parent |
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
Non-controlling interests |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earning / (loss) per share |
|
34 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earning / (loss) attributable to ordinary equity holders of the Parent (in absolute INR and USD) |
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
Diluted earning / (loss) attributable to ordinary equity holders of the Parent (in absolute INR and USD) |
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
The accompanying notes are an integral part of the consolidated financial statements
F-5
ReNew Energy Global Plc
Consolidated statement of changes in equity
(INR and USD amounts in millions, except share and par value data)
|
|
Attributable to the equity holders of the Parent |
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Particulars |
|
Issued |
|
|
Share |
|
|
Hedge |
|
|
Share |
|
|
Retained |
|
|
Capital |
|
|
Debenture |
|
|
Foreign |
|
|
Total |
|
|
Non-controlling |
|
|
Total |
|
|||||||||||
As at April 1, 2021 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loss for the year |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other comprehensive income / (loss) for the year |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total comprehensive income / (loss) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||
Share-based payment expense (refer Note 38) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Repurchase of vested stock options (refer Note 38) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Amount utilised on exercise of stock options |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Shares issued by subsidiaries |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Disposal of subsidiary (refer Note 35) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Acquisition of non-controlling interest |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Shares issued by RPL* |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Shares issued (refer Note 16) |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Transfer to / transfer from debenture redemption reserve (net) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Adjustments / impact pursuant to the Transaction (refer note 51(a)) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
- Capital transaction involving issue of shares (net of costs of INR |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
- Distribution / cash paid to RPL’s equity holders |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
- Recognition of non-controlling interests |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|||
Allocation of other equity to non controlling interest |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
||
Shares pending cancellation (refer Note 16) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Effect of approved capital reduction (refer Note 16) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||||||||
Change in fair value of put option liability / derecognition of non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
As at March 31, 2022 (INR) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
As at April 1, 2022 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loss for the year |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other comprehensive income / (loss) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total comprehensive income / (loss) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
||
Shares issued during the year |
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Share-based payment expense (refer Note 38) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Equity component of debentures and shares issued by subsidiaries |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Acquisition of interest by non-controlling interest in subsidiaries |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
Acquisition of non controlling interest |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Allocation of other equity to non controlling interest |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
||||
Transfer to / transfer from debenture redemption reserve (net) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Shares bought back, held as treasury stock (refer Note 16) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Change in fair value of put option liability / derecognition of non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
As at March 31, 2023 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
As at April 1, 2023 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Profit for the year |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Other comprehensive income / (loss) for the year |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total comprehensive income / (loss) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Shares issued during the year (refer Note 16) |
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Share-based payment expense (refer Note 38) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Equity component of debentures and shares issued by subsidiaries |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Acquisition of interest by non-controlling interest in subsidiaries |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
||
Acquisition of non controlling interest |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
|
|||
Allocation of other equity to non controlling interest |
|
|
— |
|
|
|
— |
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— |
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— |
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( |
) |
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( |
) |
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( |
) |
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||||
Amount transferred to the carrying amount of property, plant and equipment (net of tax) |
|
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— |
|
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|
— |
|
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|
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— |
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— |
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— |
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— |
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— |
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— |
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|||
Transfer to / transfer from debenture redemption reserve (net) |
|
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— |
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— |
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— |
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— |
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— |
|
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( |
) |
|
|
— |
|
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— |
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— |
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|
— |
|
|
Shares bought back, held as treasury stock (refer Note 16) |
|
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— |
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— |
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— |
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— |
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( |
) |
|
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— |
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— |
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— |
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|
( |
) |
|
|
— |
|
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|
( |
) |
Change in fair value of put option liability / derecognition of non-controlling interests |
|
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— |
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|
— |
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— |
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— |
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( |
) |
|
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— |
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— |
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— |
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( |
) |
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|
( |
) |
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( |
) |
As at March 31, 2024 (INR) |
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( |
) |
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( |
) |
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( |
) |
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||||||||
As at March 31, 2024 (USD) (refer Note 2.2) |
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( |
) |
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( |
) |
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( |
) |
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||||||||
#
*
The accompanying notes are an integral part of the consolidated financial statements
F-6
ReNew Energy Global Plc
Consolidated statement of cash flows
(INR and USD amounts in millions, except share and par value data)
|
|
For the year ended March 31, |
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|||||||||||||
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2022 |
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2023 |
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2024 |
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2024 |
|
||||
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|
(INR) |
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|
(INR) |
|
|
(INR) |
|
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(USD) |
|
||||
Cash flows from operating activities |
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|
||||
Profit / (loss) before tax |
|
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( |
) |
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( |
) |
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|
||
Adjustments to reconcile profit/ (loss) before tax to net cash flows: |
|
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|
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Finance costs |
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|
||||
Depreciation and amortisation |
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|
||||
Change in fair value of warrants |
|
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( |
) |
|
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( |
) |
|
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( |
) |
|
Gain on disposal of subsidiaries (net) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Share based payments |
|
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|
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|
||||
Listing and related expenses |
|
|
|
|
|
— |
|
|
|
— |
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|
|
— |
|
|
Interest income |
|
|
( |
) |
|
|
( |
) |
|
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( |
) |
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( |
) |
Others |
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( |
) |
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|||
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|
||||
Working capital adjustments: |
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|
||||
Decrease / (increase) in trade receivables and contract assets |
|
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( |
) |
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|
|||
Increase in inventories |
|
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( |
) |
|
|
( |
) |
|
|
( |
) |
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( |
) |
(Increase) / decrease in other assets |
|
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( |
) |
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( |
) |
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( |
) |
|
Increase in trade payables and other liabilities |
|
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|
||||
Cash generated from operations |
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|
||||
Income tax paid (net) |
|
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( |
) |
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( |
) |
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( |
) |
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( |
) |
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|
||||
Net cash generated from operating activities (a) |
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|
||||
|
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|
||||
Cash flows from investing activities |
|
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|
|
|
|
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|
||||
Purchase of property, plant and equipment, intangible assets and right of use assets |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Sale of property, plant and equipment |
|
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|
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|
||||
Investment in deposits having residual maturity more than 3 months and mutual funds |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Redemption of deposits having residual maturity more than 3 months and mutual funds |
|
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|
||||
Deferred consideration received |
|
|
— |
|
|
|
|
|
|
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|
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|
|||
Disposal of subsidiaries, net of cash disposed (refer Note 35) |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
Acquisition of subsidiaries, net of cash acquired |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
Purchase consideration paid |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Government grant received |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Interest received |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loans given |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Investment in optionally convertible debentures |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Investment in energy funds |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Investment in jointly controlled entities (refer Note 50(a)) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities (b) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
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|
|
|
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|
||||
Cash flows from financing activities |
|
|
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|
|
|
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|
||||
Capital transaction involving issue of shares (net of transaction cost) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Shares issued during the year |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Distribution / cash paid to RPL’s equity holders (refer Note 51(a)) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Shares bought back, held as treasury stock (refer Note 16) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Acquisition of interest by non-controlling interest in subsidiaries |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Payment for acquisition of interest from non-controlling interest |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Payment of lease liabilities (including payment of interest expense) (refer Note 37) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Payment made for repurchase of vested stock options |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Proceeds from shares and debentures issued by subsidiaries# |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Put options exercised during the year (refer Note 41) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Proceeds from interest-bearing loans and borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Repayment of interest-bearing loans and borrowings |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Interest paid (including settlement gain / loss on derivative instruments)* |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net cash generated from financing activities (c) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net decrease in cash and cash equivalents (a) + (b) + (c) |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Cash and cash equivalents at the beginning of the year |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effects of exchange rate changes on cash and cash equivalents |
|
|
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|
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|
||||
|
|
|
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|
|
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|
||||
Cash and cash equivalents at the end of the year |
|
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|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
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|
|
|
|
|
|
||||
Components of cash and cash equivalents |
|
|
|
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|
|
|
|
|
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|
||||
Cash and cheque on hand |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balances with banks: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
- On current accounts |
|
|
|
|
|
|
|
|
|
|
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|
||||
- Deposits with original maturity of less than 3 months |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total cash and cash equivalents (refer Note 15) |
|
|
|
|
|
|
|
|
|
|
|
|||||
F-7
#
*
Changes in liabilities arising from financing activities
|
|
As at |
|
|
Cash |
|
|
Other |
|
|
As at |
|
||||
Particulars |
|
April 1, 2023 |
|
|
flows (net) |
|
|
changes* |
|
|
March 31, 2024 |
|
||||
Long term interest-bearing loans and borrowings (including current maturities and net of ancillary borrowings cost incurred) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Short term interest-bearing loans and borrowings |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Total liabilities from financing activities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
|
|
As at |
|
|
Cash |
|
|
Other |
|
|
As at |
|
||||
Particulars |
|
April 1, 2022 |
|
|
flows (net) |
|
|
changes* |
|
|
March 31, 2023 |
|
||||
Long term interest-bearing loans and borrowings (including current maturities and net of ancillary borrowings cost incurred) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Short term interest-bearing loans and borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total liabilities from financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
As at |
|
|
Cash |
|
|
Other |
|
|
As at |
|
||||
Particulars |
|
April 1, 2021 |
|
|
flows (net) |
|
|
changes* |
|
|
March 31, 2022 |
|
||||
Long term interest-bearing loans and borrowings (including current maturities and net of ancillary borrowings cost incurred) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Short term interest-bearing loans and borrowings |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Total liabilities from financing activities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
*
The cash flow statement has been prepared under the indirect method as set out in the IAS 7 "Statement of Cash Flows".
The accompanying notes are an integral part of the consolidated financial statements
F-8
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
ReNew Energy Global Plc (the Company or Parent) is a public limited company incorporated under the laws of England and Wales (company number 13220321). The Company was incorporated as a private limited company in the United Kingdom on February 23, 2021 and re-registered as a public limited company in the United Kingdom on May 12, 2021. The registered office of the Company is located at C/O Vistra (UK) Ltd Suite 3, 7th Floor, 50, Broadway, London, England, SW1H 0DB, United Kingdom. The consolidated financial statements comprise financial statements of the Company and its subsidiaries (collectively, the Group) were authorised for issue by the Company's Board of Directors on July 29, 2024.
ReNew Private Limited (RPL), (formerly known as 'ReNew Power Private Limited') is a private limited company domiciled and incorporated in India. The registered office of RPL is located at 138, Ansal Chamber - II Bhikaji Cama Place, New Delhi - 110066. The Group carries out business activities relating to generation of power through non-conventional and renewable energy sources through RPL and its subsidiaries primarily in India.
RMG Acquisition Corporation II (RMG II) is a blank check company incorporated as a Cayman Islands exempted company, on July 28, 2020 for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.
ReNew Power Global Merger Sub (Merger Sub) was a Cayman Islands exempted company, wholly owned by the Company.
Details of Business Combination Agreement (BCA) and consequent listing of ReNew Energy Global Plc on NASDAQ
On February 24, 2021, RPL with a purpose of listing on NASDAQ through special purpose acquisition company route (SPAC) had entered into a BCA with (i) RMG II, (ii) Philip Kassin, solely in the capacity as the representative for the shareholders of RMG II, (iii) the Company (iv) Merger Sub and (v) certain shareholders of RPL.
Pursuant to the terms of the BCA, (i) Merger Sub merged with and into RMG II, with RMG II surviving through transfer of RMG II shares in exchange for the issuance of shares of the Company and (ii) certain shareholders of RPL transferred and the Company acquired, RPL shares in exchange for the issuance of shares of the Company and/or the payment of cash to the certain shareholders of RPL (the "Transaction").
On August 23, 2021, on successful completion of above Transaction, the Company was listed on the NASDAQ. The Company acquired approximately
2.1
The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The Group has prepared the conslidated financial statements on the basis that it will continue to operate as a going concern. The Directors consider that there are no material uncertainties that may cast significant doubt over this assumption. They have formed a judgement that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, and not less than 12 months from the end of the reporting period.
These consolidated financial statements have been prepared in accordance with the accounting policies, set out below, and were in all material aspects were consistently applied to all periods presented unless otherwise stated (refer Note 2.4). Refer Note 4.2.1 for new and amended standards and interpretations adopted by the Group.
F-9
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
The consolidated financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value:
- Financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments)
- Equity-settled share based payments measured at fair value on grant date
- Share warrants
- Liability for put options with non-controlling interests (refer accounting policy below)
2.2 Convenience translation (unaudited)
The consolidated financial statements are presented in Indian Rupee (INR), the presentation currency of the Group. Solely for the convenience of readers, the consolidated financial statements as at and for the year ended March 31, 2024 have been translated to U.S. Dollars (USD) at the exchange rate of INR 83.34 per USD 1.00, being the noon buying rate in New York City for cable transfer in non-U.S. currencies as certified for customs purposes by the Federal Reserve Bank of New York on March 31, 2024.
No representation is made that the Indian rupee amounts have been, could have been or could be converted into USD at such a rate or any other rate. Such convenience translation is not subject to audit by the Company’s Independent Registered Public Accounting Firm.
2.3 Accounting policy for transaction referred in Note 1:
On completion of the Transaction referred in Note 1, the former shareholders of RPL become majority shareholders of the Company and have the ability to elect, appoint or remove a majority of the members of the governing body of the Company. There were no material assets or liabilities or operations in the Company prior to this transaction. RMG II is a non-operating entity that does not meet the definition of a business under IFRS 3 - Business combination. Therefore, for accounting purposes, RPL is deemed to be the accounting acquirer in the transaction. The transaction has been treated as a capital transaction equivalent to the issue of shares of RPL in exchange for the net monetary assets acquired and therefore, acquisition accounting does not apply.
Consequently, there was no goodwill or other intangible assets recorded, in accordance with IFRS. Any difference in the fair value of the shares deemed to have been issued by the accounting acquirer and the fair value of the accounting acquiree‘s identifiable net assets is considered to be payment for a service of a stock exchange listing and recognised as expenses under head “Listing and related expenses” in consolidated statement of profit or loss.
The consolidated financial statements of the Group represent the continuation of the pre-acquisition consolidated financial statements of RPL. The consolidated financial statements of the Group reflect:
(a) the assets and liabilities of the accounting acquirer recognised and measured at their pre-combination carrying amounts;
(b) the retained earnings and other equity balances of the accounting acquirer before this transaction, after adjusting amount attributable to non-controlling interest ('NCI') recognised;
(c) the amount recognised as issued capital and share premium is determined by adding the issued equity of the accounting acquirer outstanding immediately before the Transaction, after adjusting amount attributable to NCI recognised to the fair value consideration effectively transferred. The number and type of equity instruments pre-acquisition reflect the equity structure of RPL. Post the Transaction, the number and type of equity instruments issued, reflects the equity structure of the Company. Refer Note 34 for adjustment carried to number of equity instruments for computation of earnings per share.
(d) the non-controlling interest’s proportionate share of the accounting acquirer’s pre-combination carrying amounts of retained earnings and other equity interests;
(e) the statement of profit or loss and other comprehensive income for the current period reflects that of the accounting acquirer for the full period together with the post-acquisition results of the accounting acquiree.
The consolidated financial statements for the period April 1, 2021 to August 23, 2021 include financial data pertaining only to RPL and its subsidiaries.
F-10
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
2. 4 Changes in presentation and disclosures
(a) The portion of the long-term interest-bearing loans and borrowings and interest accrued on borrowings, which was falling due for repayment within 12 months from the reporting date was previously being included and presented as part of ‘Current- other financial liabilities'. The Group has reassessed the presentation and disclosures of these items and concluded that including and presenting such liabilities as part of ‘Current- interest-bearing loans and borrowings’, which is also a part of the 'Current liabilities', would lead to a better presentation and understanding of the consolidated financial statements. Accordingly, the Group has included the portion of long-term interest bearing loans and borrowings and interest accrued on borrowings, which is falling due for repayment within 12 months from the reporting date, aggregating to INR
(b) Besides the above, the management has re-evaluated presentation of certain items on the face of the consolidated financial statements and in notes, basis materiality considerations. Basis re-evaluation, it has presented certain items with relatively smaller amounts in notes instead of the face of the consolidated financial statement and certain items with immaterial amounts have been grouped in the notes under the same heading. The management believes these changes will help in reducing the information overload and improve the overall understanding of the consolidated financial statements, without obscuring any material information.
Since, both the above changes relate only to presentation and disclosures, they do not impact recognition and measurement of any of the items in the consolidated financial statements, and, consequentially, there is no impact on total equity and/ or profit / (loss) for the current or any of the earlier periods. Nor there is any impact on presentation of consolidated cash flow statement. All the changes pertain to change in line item/ grouping of immaterial items under the same sub-heading. Considering the nature of changes, the management believes that they do not have any material impact on the consolidated statement of financial position at the beginning of the comparative period and, therefore, there is no need for separate presentation of an additiional consolidated statement of financial position.
2. 5 Significant accounting judgments, estimates and assumptions
The preparation of consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
In the process of applying the accounting policies management has made certain judgments, estimates and assumptions. The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond control of the Group. Such changes are reflected in assumptions when they occur.
Estimates and assumptions
a) Impairment of goodwill for Ostro group of CGUs
The key assumptions used to determine the recoverable amount for the different CGUs or group of CGUs including the Ostro Group of CGUs where goodwill has been allocated are disclosed and further explained in Note 6. The impairment assessments are based on a range of estimates and assumptions, including future estimates of revenues, costs and discount rates as more fully described in the said Note 6.
Significant accounting judgements
Note 53(a) below describes accounting judgements applied with respect to the contracts entered for transmission projects under the Build, Own, Operate and Maintain (BOOM) model, where there has been a change of law in the current year.
F-11
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
2. 6 The consolidated financial statements are presented in Indian Rupees (
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at March 31, 2024. The Group controls an investee if and only if the Group has:
- Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee)
- Exposure, or rights, to variable returns from its involvement with the investee; and
- The ability to use its power over the investee to affect its returns
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
- The contractual arrangement(s) with the other vote holders of the investee
- Rights arising from other contractual arrangements
- The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the Consolidated Financial Statements from the date the Group gains control until the date the Group ceases to control the subsidiary. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
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 ('NCI'), even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s accounting policies. The financial statements of all subsidiaries are prepared for the same reporting period as that of the Company for consolidation purposes.
The financial statements of all entities used for the purpose of consolidation are drawn up to same reporting date as that of the Company i.e., year ended on March 31. When the end of the reporting period of the parent is different from that of a subsidiary, the subsidiary prepares, for consolidation purposes, additional financial information as of the same date as the financial statements of the parent to enable the parent to consolidate the financial information of the subsidiary, unless it is impracticable to do so.
Liability for put options with non-controlling interests
Liability for put option issued to non-controlling interests (NCI), to be settled in cash by the Company, which do not grant present access to ownership interest to the Group is recognised at present value of the redemption amount and is reclassified from equity. At the end of each reporting period, the non-controlling interests subject to put option is derecognised and the difference between the amount derecognised and present value of the redemption amount, which is recorded as a financial liability, is accounted for as an equity transaction. If the put option is exercised, the amount recognised as financial liability at that date is extinguished by the payment of the exercise price.
The following are the material accounting policies applied by the Group in preparing its consolidated financial statements:
F-12
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in other expenses.
The Group determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs.
The Group has an option to apply a ‘concentration test’ that permits a simplified assessment of whether an acquired set of activities and assets is not a business. The optional concentration test is met if substantially all the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the optional concentration test is not met, or the Group elects not to apply the test, the Group performs detailed assessment to determine whether an acquired set of activities and assets is a business.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their acquisition date fair values. For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable. However, the following assets and liabilities acquired in a business combination are measured at the basis indicated below:
- Deferred tax assets or liabilities and the assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with IAS 12 - Income Taxes and IAS 19 - Employee Benefits respectively.
- Liabilities or equity instruments related to share based payment arrangements of the acquiree or share – based payments arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with IFRS 2 Share-based Payment at the acquisition date.
- Assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that standard.
- Reacquired rights are measured at a value determined on the basis of the remaining contractual term of the related contract. Such valuation does not consider potential renewal of the reacquired right.
- Potential tax effects of temporary differences and carry forwards of an acquiree that exist at the acquisition date or arise as a result of the acquisition are accounted in accordance with IAS 12.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, any previously held equity interest is re-measured at its acquisition date fair value and any resulting gain or loss is recognised in the statement of profit or loss or OCI, as appropriate.
Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IFRS 9 Financial Instruments, is measured at fair value with changes in fair value recognised in the statement of profit or loss in accordance with IFRS 9. Other contingent consideration that is not within the scope of IFRS 9 is measured at fair value at each reporting date with changes in fair value recognised in statement of profit or loss. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
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 amounts 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 statement of profit or loss.
F-13
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
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 or group of CGUs 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 (CGU) or group of CGUs to which goodwill has been allocated is tested for impairment annually on March 31, 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 the statement of profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.
When the Group acquires controlling interest in an entity or a group of assets or net assets that is not a business, the Group allocates the cost of the group between the individual identifiable assets acquired (including intangible assets) and liabilities assumed based on their relative fair values at the date of purchase and these acquisitions do not give rise to the goodwill. The cost of the group of assets is the sum of all consideration given, any NCI recognised, and transaction costs incurred if any.
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control.
The considerations made in determining joint control are similar to those necessary to determine control over subsidiaries. The Group’s investment in its joint venture are accounted for using the equity method.
Under the equity method, the investment in a joint venture is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group’s share of net assets of the joint venture since the acquisition date. Goodwill relating to the joint venture is included in the carrying amount of the investment and is not tested for impairment separately.
The statement of profit or loss reflects the Group’s share of the results of operations of the joint venture. Any change in OCI of those investees is presented as part of the Group’s OCI. In addition, when there has been a change recognised directly in the equity of the joint venture, the Group recognises its share of any changes, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and the joint venture are eliminated to the extent of the interest in the joint venture.
The aggregate of the Group’s share of profit or loss of a joint venture is shown on the face of the statement of profit or loss and represents profit or loss after tax and non-controlling interests in the subsidiaries of the joint venture.
The financial statements of the joint venture are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group.
After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its associate or joint venture. At each reporting date, the Group determines whether there is objective evidence that the investment in the joint venture is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the joint venture and its carrying value, and then recognises the loss within ‘Share of (loss) / profit of jointly controlled entities’ in statement of profit or loss.
Upon loss of joint control over the joint venture, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the joint venture upon loss of joint control and the fair value of the retained investment and proceeds from disposal is recognised in statement of profit or loss.
Interests in joint operations
F-14
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
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. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement.
When a Group entity undertakes its activities under joint operations, the Group as a joint operator recognises in relation to its interest in a joint operation:
The Group accounts for the assets, liabilities, revenue and expenses relating to its interest in a joint operation in accordance with the IFRS Standards applicable to the particular assets, liabilities, revenue and expenses.
The Group segregates assets and liabilities into current and non-current categories for presentation in the statement of financial position after considering its normal operating cycle and other criteria set out in IAS 1, “Presentation of financial statements”. For this purpose, current assets and liabilities include current portion of non-current assets and liabilities respectively. Deferred tax assets and liabilities are always classified as non-current.
The operating cycle is the time between the acquisition of assets for processing and their realisation / settlement in cash and cash equivalents. The Group has identified period upto twelve months as their operating cycle for classification of their current assets and liabilities.
The Group measures financial instruments, such as, derivatives at fair value at each reporting date.
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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
F-15
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
The management of the Group determines the policies and procedures for both recurring fair value measurement, such as unquoted financial assets, and for non-recurring measurement, such as assets held for sale.
At each reporting date, the management of the Group analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the accounting policies of the Group. The management also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.
This note summarises the accounting policy for determination of fair value. Other fair value related disclosures are given in the relevant notes as following:
Revenue 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. The Group has generally concluded that it is the principal in its revenue arrangements, because it typically controls the goods or services before transferring them to the customer.
Sale of power
Revenue from supply of power is recognised over time because the customer simultaneously receives and consumes benefits on the supply of units generated from plant to the grid as per the terms of the Power Purchase Agreement (PPA) entered into with the customers.
The Group considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated. In determining the transaction price for the sale of power, the Group considers the effects of variable consideration. There is only one performance obligation in the arrangement and therefore, allocation of transaction price is not required.
Revenue from Engineering, Procurement and Construction (EPC) Contracts
Revenue from provision of service is recognised over a period of time on the percentage of completion method. Percentage of completion is determined as a proportion of cost incurred to date to the total estimated contract cost. Profit on contracts is recognised on percentage of completion method and losses are accounted as soon as these are anticipated. In case the total cost of a contract based on technical and other estimates is expected to exceed the corresponding contract value such expected loss is provided for. The revenue on account of extra claims on construction contracts are accounted for at the time of acceptance in principle by the customers due to uncertainties attached.
Contract revenue earned in excess of billing has been reflected under other current assets and billing in excess of contract revenue has been reflected under current liabilities in the statement of financial position.
F-16
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Variable consideration
If the consideration in a contract includes a variable amount, the Group estimates the amount of consideration to which it will be entitled in exchange for transferring the goods or service to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. To estimate the variable consideration, the Group applies the method that it expects best predicts the amount of consideration to which the entity will be entitled based on the terms of the contract.
- Rebates
In some PPAs, the Group provide rebates in invoice if payment is made before the due date. These are adjusted against revenue and are offset against amounts payable by the customers.
Revenue on account of service concession arrangements
IFRIC 12, 'Service Concession Arrangements' deals with the treatment to be applied by the operator for public-to-private service concession arrangements. Service concession arrangement fall within the scope of IFRIC 12 when the following two conditions are met:
i) the grantor controls or regulates what services the operator must provide with the infrastructure, to whom it must provide them, and at what price; and
ii) the grantor controls - through ownership, beneficial entitlement or otherwise - any significant residual interest in the infrastructure at the end of the term of the arrangement.
The financial asset model according to paragraph 16 of IFRIC 12 applies if the operator has an unconditional contractual right to receive cash or another financial asset from or at the direction of the grantor for the construction services; the grantor has little, if any, discretion to avoid payment, usually because the agreement is enforceable by law. The operator has an unconditional right to receive cash if the grantor contractually guarantees to pay the operator (a) specified or determinable amounts or (b) the shortfall, if any, between amounts received from users of the public service and specified or determinable amounts, even if payment is contingent on the operator ensuring that the infrastructure meets specified quality or efficiency requirements.
Revenue related to construction services under a service concession arrangement is recognised over time because the grantor controls as the asset as it is constructed by the Group. Operation or service revenue is recognised over time in the period in which the services are provided by the Group because the grantor simultaneously receives and consumes the benefits provided the Group. The total expected consideration is allocated to the performance obligations based on the relative stand-alone selling prices of the construction services and operation services, taking into account the significant financing component.
The Group recognises a contract asset for its right to receive consideration for the construction services and accounts for the significant financing component in the arrangement in accordance IFRS 15. Once it is established that Group has an unconditional right (other than that of the passing of time) to receive consideration for the construction services, the amounts due from the grantor are accounted for in accordance with IFRS 9, 'Financial Instruments' as receivables.
Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group performs by transferring goods or services to a customer when that right is conditioned on something other than the passage of time. Contract assets are subject to impairment assessment.
Contract liabilities
F-17
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
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 Group 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 Group performs under the contract (i.e., transfers control of the related goods or services to the customer).
Trade receivables
A receivable represents the Group’s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets in section (s) Financial instruments – initial recognition and subsequent measurement.
The consolidated financial statements have been presented in INR, which is the Group's presentation currency as business activities of the Group are carried through RPL and its subsidiaries, whose functional currency is INR. The functional currency of the Company is USD as business activities of the Company are carried in USD.
The functional currency for each entity in the Group is determined as the currency of the primary economic environment in which it operates and items included in the financial statements of each entity are measured using that functional currency.
Foreign currency transactions
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. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Differences arising on settlement or translation of monetary items are recognised in the consolidated statement of profit or loss.
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.
Group companies
On consolidation, the assets and liabilities of foreign operations are translated into INR at the rate of exchange prevailing at the reporting date and their statements of profit or loss are translated at exchange rates prevailing at the dates of the transactions. For practical reasons, the group uses an average rate to translate income and expense items, if the average rate approximates the exchange rates at the dates of the transactions. The exchange differences arising on translation for consolidation are recognised in OCI. On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is recognised in the statement of profit or loss.
Current income 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 profit or loss is recognised outside the statement of profit or loss (either in OCI or equity). Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Group reflects the effect of uncertainty for each uncertain tax treatment by using either most likely method or expected value method, depending on which method predicts better resolution of the treatment. Current income tax assets and liabilities are offset if a legally enforceable right exists to set off these and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Deferred tax
Deferred tax is provided using the asset-liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
F-18
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Deferred tax liabilities are recognised for all taxable temporary differences, except:
- When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, (i) affects neither the accounting profit nor taxable profit or loss and (ii) and does not give rise to equal taxable and deductible temporary differences.
- In respect of taxable temporary differences associated with investments in subsidiaries and interests in joint ventures, if the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:
- When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, (i) affects neither the accounting profit nor taxable profit or loss and (ii) and does not give rise to equal taxable and deductible temporary differences.
- in respect of deductible temporary differences associated with investments in subsidiaries and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
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.
In situations where Group is entitled to a tax holiday under the Income-tax Act, 1961, enacted in India, no deferred tax (asset or liability) is recognised in respect of temporary differences which reverse during the tax holiday period. Deferred taxes in respect of temporary differences which reverse after the tax holiday period are recognised in the period in which the temporary differences originate. However, the Group restricts the recognition of deferred tax assets to the extent that it has become probable that sufficient future taxable income will be available against which such deferred tax assets can be realised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside statement of profit or loss (either in OCI or equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Minimum Alternate Tax
Minimum alternate tax (MAT) paid in a year is charged to the statement of profit or loss as current tax for the year. The deferred tax asset is recognised for MAT credit available only to the extent that it is probable that the concerned company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the company recognises MAT credit as an asset, it is created by way of credit to the statement of profit or loss and shown as part of deferred tax asset. The company 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.
Government grants is recognised where there is reasonable assurance that the grant will be received and all attached conditions will be compiled with. When the grant related to an expense item, it is recognised as other income on a systematic basis over the periods that related costs, for which it is intended to compensate, are expensed. When grant is related to an asset, it is recognised as income in equal amounts over the expected useful life of related asset.
F-19
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
The Group presents grants related to an expense item as income in the statement of profit or loss. The Group does not receive any material non- monetary asset as government grant.
Capital work in progress is stated at cost, net of accumulated impairment loss, if any. Property, plant and equipment (PPE) except freehold land is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. 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 statement of profit or loss as incurred. Land is stated at cost net of accumulated impairment losses and is not depreciated.
The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.
Subsequent costs
The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item of property, plant and equipment, if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably with the carrying amount of the replaced part getting derecognised. The cost for day-to-day servicing of property, plant and equipment are recognised in statement of profit or loss as and when incurred.
Derecognition
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss when the asset is derecognised. Gains or losses arising from de-recognition of property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised.
Intangible assets acquired separately are measured in initial recognition at cost. The cost of intangible assets and intangible assets under development acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses and intangible assets under development are carried at cost less any accumulated impairment losses. The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss.
Customer related intangibles are capitalised if they meet the definitions of an intangible asset and the recognition criteria are satisfied. Customer-related intangibles acquired as part of a business combination are valued at fair value and those acquired separately are measured at cost. Such intangibles are amortised over the remaining useful life of the customer relationships or the period of the contractual arrangements.
Depreciation and amortisation are calculated on a straight-line basis over the estimated useful lives of the assets as follows:
F-20
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
Category |
|
Life (in years) |
|
Plant and equipment (solar rooftop projects)* |
|
|
|
Plant and equipment (solar power projects)* |
|
|
|
Plant and equipment (wind power projects)* |
|
|
|
Plant and equipment (hydro power projects) |
|
|
|
Plant and equipment (transmission projects)* |
|
|
|
Plant and equipment (others) |
|
|
|
Office equipment |
|
|
|
Furniture and fixture |
|
|
|
Computers |
|
|
|
Computer servers |
|
|
|
Computer softwares |
|
|
|
Other Intangible assets |
|
|
|
Customer contracts |
|
|
|
Development rights |
|
|
|
Leasehold improvements |
|
Useful life or lease term ( |
|
Building (Temporary structure) |
|
|
|
Building (other than Temporary structure) |
|
* Based on an external technical assessment, the management believes that the useful lives as given above and residual value of
The residual values, useful lives and methods of depreciation and amortisation of property, plant and equipment and intangible assets are reviewed at each financial period end and adjusted prospectively, if appropriate.
Inventories are valued at the lower of cost and net realisable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined using weighted average method.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs necessary to make the sale.
Borrowing costs consist of interest, discount on issue, premium payable on redemption and other costs that an entity incurs in connection with the borrowing of funds (this cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs). The borrowing costs are amortised basis the Effective Interest Rate (EIR) method over the term of the loan.
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period. The amount amortised for the period from disbursement of borrowed funds upto the date of capitalisation of the qualifying asset is added to the cost of qualifying assets. All other borrowing costs are recognised in statement of profit or loss under the head finance cost in the period in which they are incurred
To the extent, group borrows funds for general purpose and uses them for the purpose of obtaining a qualifying asset, the group determines the amount of borrowing costs eligible for capitalisation by applying a capitalisation rate to the expenditures on that asset. The capitalisation rate used is weighted average of the borrowing costs applicable to the borrowings of the group that are outstanding during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset. In case any specific borrowing remains outstanding after the related asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity borrows generally when calculating the capitalisation rate on general borrowings.
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
F-21
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
As a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and accumulated 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, and lease payments made at or before the commencement date less any lease incentives received.
If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment. Refer to the accounting policies in section (o) Impairment of non-financial assets.
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. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest 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. 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 (example: changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
The Group applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low value assets (lease of assets worth less than INR
As a lessor
Leases in which the Group does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating lease is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned. When a contract includes both lease and non-lease component, the Group applies IFRS 15 to allocate the consideration under the contract to each component.
F-22
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
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 a cash-generating unit (CGU) asset is required in case of CGU which includes Goodwill, the Group estimates its recoverable amount. Recoverable amount is the higher of an asset’s or 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. The higher of value-in-use or fair value less costs of disposal is regarded as the recoverable amount.
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. These budgets and forecast calculations generally cover the remaining life of the project.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the statement of profit or loss.
Company provides additional benefits to certain members of senior management and employees of the Group in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions).
Equity-settled transactions
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model.
The cost is recognised, together with a corresponding increase in share-based payment reserve in equity, over the period in which the performance and / or service conditions are fulfilled in employee benefit expenses. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the numbers of equity instruments that will ultimately vest. The statement of profit or loss expense or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefit expense.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group's best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other condition attached to an award, but without associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and / or performance conditions.
No expense is recognised for awards that do not ultimately vest because of non-market performance and / or service conditions have not been met. Where awards include a market or non-vesting condition, the transaction are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service condition are satisfied.
When the terms of an equity-settled award are modified or replaced with new share based payment scheme, the minimum expense recognised is the grant date fair value of the unmodified award, provided the original vesting terms of the award are met. An additional expense, measured as at the date of modification, is recognised for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through the statement of profit or loss.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
F-23
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Retirement benefit in the form of provident fund is a defined contribution scheme. The Group has no obligation, other than the contribution payable to the provident fund. The Group recognises contribution payable to provident fund scheme as an expense, when an employee renders the related service.
Remeasurements comprising of actuarial gain and losses, the effect of the asset ceiling, excluding amount recognised in the net interest on the defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised in the statement of financial position with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to the statement of profit or loss in subsequent periods.
The Group operates a defined benefit plan in India, viz., gratuity. The cost of providing benefit under this plan is determined on the basis of actuarial valuation at each period-end carried out using the projected unit cost method.
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 statement of profit or loss:
- Service costs comprising current service costs, gains and losses on curtailments and non-routine settlements; and
- Net interest expense or income
Accumulated leave, which is expected to be utilised within the next twelve months, is treated as short term employee benefit. The Group measures the expected cost of such absences as an additional amount that it expects to pay as a result of the unused entitlement that has accumulated at reporting date.
The Group treats the accumulated leave expected to be carried forward beyond twelve months, as long term employee benefit for measurement purposes. Such long term compensated absences are determined on the basis of actuarial valuation at each period-end carried out using the projected unit cost method. Remeasurements comprising of actuarial gain and losses are recognised in the statement of financial position with a corresponding debit or credit to statement of profit or loss in the period in which they occur. The Group presents the leave as current liability in the balance sheet, to the extent it does not have an unconditional right to defer its settlement for 12 months after the reporting date. Where Group has unconditional legal and contractual right to defer the settlement for a period beyond 12 months, the same is presented as non-current liability.
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit or loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Decommissioning liability
The Group considers constructive obligations and records a provision for decommissioning costs of the wind and solar power plants. Decommissioning costs are provided for at the present value of expected costs to settle the obligation using estimated cash flows and are recognised as part of the cost of the relevant asset. The cash flows are discounted at a current pre-tax rate that reflects the risks specific to the decommissioning liability. The unwinding of the discount is expensed as incurred and recognised in the statement of profit or loss as a finance cost. The estimated future costs of decommissioning are reviewed annually and adjusted as appropriate. Changes in the estimated future costs, or in the discount rate applied, are added to or deducted from the cost of the asset.
F-24
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
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
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (FVTOCI), and fair value through profit or loss (FVTPL).
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at FVTPL, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price as disclosed in section 4.1(e).
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
Debt instruments at amortised cost
A ‘debt instrument’ is measured at the amortised cost if both the following conditions are met:
After initial measurement, such financial assets are subsequently measured at amortised cost using the EIR method. 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 in other income in the statement of profit or loss. The losses arising from impairment are recognised in the statement of profit or loss.
Debt instruments at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorisation as at amortised cost or as FVTOCI, is classified as at FVTPL.
In addition, the Group may elect to designate a debt instrument, which otherwise meets amortised cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’). The Group has not designated any debt instrument as at FVTPL.
Debt instruments included within FVTPL category are measured at fair value with all changes recognised in the statement of profit or loss.
Equity investments
All other equity investments in scope of IFRS 9 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which IFRS 3 applies are classified at FVTPL. For all other equity instruments, the Group may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Group makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.
If the Group decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognised in the OCI. There is no recycling of the amounts from OCI to statement of profit or loss, even on sale of investment. However, the Group may transfer the cumulative gain or loss within equity.
F-25
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Equity instruments included within FVTPL category are measured at fair value with all changes recognised in the statement of profit or loss. The Group has not designated any instrument at FVTOCI.
Embedded derivatives
A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if: the economic characteristics and risks are not closely related to the host; a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and the hybrid contract is not measured at FVTPL. Embedded derivatives are measured at fair value with changes in fair value recognised in statement of profit or loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the FVTPL category.
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 when:
- The rights to receive cash flows from the asset have expired.
Impairment of financial assets
In accordance with IFRS 9, the Group applies expected credit loss (ECL) model for measurement and recognition of impairment loss for all debt instruments not held at FVTPL. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
The Group follows 'simplified approach' for recognition of impairment loss allowance on trade receivables or contract revenue receivables. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
The application of simplified approach does not require the Group to track changes in credit risk. Rather it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the group determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL. The Group considers that there has been a significant increase in credit risk when contractual payments are more than 30 days past due.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.
For financial guarantee contracts, the date that the Group becomes a party to the irrevocable commitment is considered to be the date of initial recognition for the purposes of assessing the financial instrument for impairment. In assessing whether there has been a significant increase in the credit risk since initial recognition of a financial guarantee contracts, the Group considers the changes in the risk that the specified debtor will default on the contract.
For a financial guarantee contract, as the Group is required to make payments only in the event of a default by the debtor in accordance with the terms of the instrument that is guaranteed, the expected loss allowance is the expected payments to reimburse the holder for a credit loss that it incurs less any amounts that the Group expects to receive from the holder, the debtor or any other party.
F-26
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
The Group regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.
ECL impairment loss allowance (or reversal) during the period is recognised as income / expense in the statement of profit or loss.
Modification of contractual cash flows
When the contractual cash flows of a financial asset are renegotiated or otherwise modified and the renegotiation or modification does not result in the derecognition of that financial asset in accordance with IFRS 9, the Group recalculates the gross carrying amount of the financial asset and recognises a modification gain or loss under finance income or finance costs, respectively, in the statement of profit or loss. The gross carrying amount of the financial asset is recalculated as the present value of the renegotiated or modified contractual cash flows that are discounted at the financial asset’s original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets) or, when applicable, the revised effective interest rate calculated. Any costs or fees incurred are adjusted with the carrying amount of the modified financial asset and are amortised over the remaining term of the modified financial asset.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and in the case of loans and borrowings and payables, net of directly attributable transaction costs. The financial liabilities of the Group include trade and other payables, derivative financial instruments, loans and borrowings including bank overdraft.
Subsequent measurement
The measurement of financial liabilities depends on their classification as discussed below:
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of profit or loss when the liabilities are derecognised as well as through the 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 or loss. This category generally applies to borrowings.
Compound financial instruments
Compound financial instruments (CFIs) are separated into liability and equity components based on the terms of the contract.
The Group recognises interest, dividends, losses and gains relating to such financial instrument or a component that is a financial liability as income or expense in the statement of profit or loss.
The present value of the liability part of the compulsorily convertible debentures classified under financial liabilities and the equity component is calculated by subtracting the liability from the total proceeds of CFIs.
Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and equity components of the instrument in proportion to the allocation of proceeds. Transaction costs that relate jointly to more than one transaction (for example, cost of issue of debentures, listing fees) are allocated to those transactions using a basis of allocation that is rational and consistent with similar transactions.
Financial guarantees
F-27
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
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 IFRS 9 and the amount recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of IFRS 15.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged / 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 or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position 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.
Initial recognition and subsequent measurement
The Group uses derivative financial instruments, such as foreign currency forward contracts, cross currency swaps (CCS), call spreads, foreign currency option contracts and interest rate swaps (IRS), to hedge its interest rate risks and foreign currency risks. Such 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. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to the statement of profit or loss, except for the effective portion of cash flow hedges, which is recognised in OCI and later reclassified to statement of profit or loss when the hedge item affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability.
For the purpose of hedge accounting, hedges are classified as:
- Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability or an unrecognised firm commitment
- Cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognised firm commitment
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which the Group wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge.
The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:
F-28
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Hedges that meet the strict criteria for hedge accounting are accounted for, as described below:
Cash flow hedges
The effective portion of the gain or loss on the hedging instrument is recognised in OCI in the cash flow hedge reserve, while any ineffective portion is recognised immediately in the statement of profit or loss. The cash flow hedge reserve is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the cumulative change in fair value of the hedged item. The Group uses forward currency contracts as hedges of its exposure to foreign currency risk in forecast transactions and firm commitments. The ineffective portion relating to foreign currency contracts is recognised as other expense.
The Group designates only the spot element of forward contracts as a hedging instrument and the forward element is recognised in OCI and accumulated in seperate component of equity under the cost of hedge reserve. The amounts accumulated in OCI are accounted for, depending on the nature of the underlying hedged transaction. If the hedged transaction subsequently results in the recognition of a non-financial item, the amount accumulated in equity is removed from the separate component of equity and included in the initial cost or other carrying amount of the hedged asset or liability. This is not a reclassification adjustment and will not be recognised in OCI for the period. This also applies where the hedged forecast transaction of a non-financial asset or non-financial liability subsequently becomes a firm commitment for which fair value hedge accounting is applied.
When option contracts are used, the Group uses only intrinsic value of the option as the hedging instrument. Gains or losses relating to the effective portion of the changes in intrinsic value of the option are recognised in the cash flow hedging reserve within equity. The changes in the time value of money that relate to the hedged item are recognised within other comprehensive income in the cost of hedging reserve within equity.
For any other cash flow hedges, the amount accumulated in OCI is reclassified to the statement of profit or loss as a reclassification adjustment in the same period or periods during which the hedged cash flows affect profit or loss.
If cash flow hedge accounting is discontinued, the amount that has been accumulated in OCI must remain in accumulated OCI if the hedged future cash flows are still expected to occur. Otherwise, the amount will be immediately reclassified to the statement of profit or loss as a reclassification adjustment. After discontinuation, once the hedged cash flow occurs, any amount remaining in accumulated OCI must be accounted for depending on the nature of the underlying transaction as described above.
Cash and short-term deposits in the statement of financial position comprise cash at banks and cash in hand and short-term deposits with an original maturity of three months or less, that are readily convertible to a known amount of cash and subject to an insignificant risk of changes in value. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short term deposits, as defined above, net of bank overdrafts as they are considered an integral part of the Group's cash management.
Bank balances other than cash and cash equivalents consists of deposits with an original maturity of more than three months. These balances are classified into current and non-current portions based on the remaining term of the deposit.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the Parent by the weighted average number of equity shares and instruments mandatorily convertible into 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
F-29
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
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 consolidated financial statements by the Board of Directors. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of an asset (disposal group), excluding finance costs and income tax expense.
The criteria for held for sale classification is regarded as met only when the sale is highly probable, and the asset or disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the plan to sell the asset and the sale expected to be completed within one year from the date of the classification.
Property, plant and equipment, intangible assets and right of use assets are not depreciated or amortised once classified as held for sale.
Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial position.
Immediately prior to classification as held for sale, the assets or groups of assets were remeasured in accordance with the Group’s accounting policies. Subsequently, assets and disposal groups classified as held for sale were valued at the lower of book value or fair value less disposal costs. A gain or loss not previously recognised by the date of sale of non-current assets (or disposal group) is recognised at the date of de-recognition.
Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from retained earnings. No gain or loss is recognised in the statement of profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments. At the time of re-issue, any difference between the carrying amount and the consideration is recognised as share premium.
The Group applied for the first-time certain standards and amendments, which are effective for annual periods beginning April 1, 2023 but do not have a material impact on the consolidated financial statements of the Group. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
The amendments to IAS 12 - Income tax narrow the scope of the initial recognition exception under IAS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases.
The amendment had no impact on the Group's consolidated financial statements.
F-30
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
The amendments require entities to provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their ‘significant’ accounting policies with a requirement to disclose their ‘material’ accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.
The amendments have had an impact on the Group’s disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the Group’s financial statements.
The amendments clarify the distinction between changes in accounting estimates, changes in accounting policies and the correction of errors. It has also been clarified how entities use measurement techniques and inputs to develop accounting estimates.
The amendments had no impact on the Group’s consolidated financial statements.
The following new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group’s financial statements are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.
- Amendments to IAS 1 - Classification of Liabilities as Current or Non-current (effective from January 1, 2024*#)
- Amendments to IAS 7 and IFRS 7 - Supplier Finance Arrangements (effective from January 1, 2024*#)
- Amendments to IFRS 9 and IFRS 7 - Amendments to the classification and measurement of financial instruments (effective from January 1, 2026*#)
- Amendments to IFRS 16 - Lease Liability in a Sale and Leaseback (effective from January 1, 2024*#)
- Amendments to IAS 21 - Lack of exchangeability (effective from January 1, 2025*#)
- IFRS 18 – Presentation and Disclosures in Financial Statements (effective from January 1, 2027*$)
# These amendments are not expected to have any material impact on the Group's consolidated financial statements.
$ The group is currently assessing the impact of adopting IFRS 18 on the Group's consolidated financial statements.
*Effective for annual periods beginning on or after this date.
F-31
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
Freehold |
|
|
Plant and |
|
|
Buildings |
|
|
Leasehold |
|
|
Office |
|
|
Furniture and |
|
|
Computers |
|
|
Capital work |
|
|
Total property, |
|
|||||||||
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|||||||||
Cost |
|
|
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|
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|
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|||||||||
As at April 1, 2021 |
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|
|||||||||
Additions during the year^ |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Disposals and adjustments during the year |
|
|
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Capitalised during the year |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
As at March 31, 2022 |
|
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|
|||||||||
Additions during the year^ |
|
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|
|
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|
|
|
|
|
|
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|
|
|
|||||||||
Disposals and adjustments during the year |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Capitalised during the year |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
As at March 31, 2023 |
|
|
|
|
|
|
|
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|
|
|
|
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|
|
|
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|
|
|
|
|
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|
|||||||||
Additions during the year^ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Disposals and adjustments during the year |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Capitalised during the year |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
As at March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|||||||||
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|
|
|
|
|
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|
|
|
|
|
|
|
|
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|
|||||||||
Accumulated depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
As at April 1, 2021 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||||
Charge for the year (refer Note 31) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||||
Depreciation capitalised during the year |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||||
Disposals and adjustments during the year |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
As at March 31, 2022 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||||
Charge for the year (refer Note 31) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||||
Depreciation capitalised during the year |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||||
Disposals and adjustments during the year |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
As at March 31, 2023 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||||
Charge for the year (refer Note 31) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||||
Depreciation capitalised during the year |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||||
Disposals and adjustments during the year |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
As at March 31, 2024 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net book value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
As at April 1, 2022 (INR) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
As at March 31, 2023 (INR) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
As at March 31, 2024 (INR) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
As at March 31, 2024 (USD) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Mortgage and hypothecation on property, plant and equipment:
Property, plant and equipment are subject to a pari passu first charge to respective lenders for project term loans, buyer's / supplier's credit, senior secured notes, working capital loan, debentures and acceptances as disclosed in Note 18 and 23.
^ Capitalised borrowing costs |
The amount of borrowing costs capitalised in property, plant and equipment and capital work in progress during the year ended March 31, 2024 was INR |
Assets on operating lease (also refer Note 37 and Note 53) |
Plant and equipment includes assets given on operating lease having gross cost of INR |
F-32
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
Computer |
|
|
Customer |
|
|
|
Development |
|
|
Other |
|
|
Carbon |
|
|
Goodwill |
|
|
Intangible |
|
|
Total |
|
|||||||||
|
(INR) |
|
|
(INR) |
|
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|||||||||
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
As at April 1, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||||||
Additions during the year |
|
|
|
|
|
|
- |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||||
Disposals and adjustments during the year |
|
( |
) |
|
|
( |
) |
|
- |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Capitalised during the year |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
As at March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||||||
Additions during the year |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||||
Disposals and adjustments during the year |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
Capitalised during the year |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
As at March 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||||||
Additions during the year |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||||
Capitalised during the year |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
As at March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Accumulated amortisation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
As at April 1, 2021 |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||||
Charge for the year (refer Note 31) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||||
Disposals and adjustments during the year |
|
( |
) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
Capitalised during the year |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
As at March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||||
Charge for the year (refer Note 31) |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||||||
Capitalised during the year |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
As at March 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||||||
Charge for the year (refer Note 31) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||||||
Capitalised during the year |
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
As at March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net book value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
As at April 1, 2022 (INR) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||||||
As at March 31, 2023 (INR) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||||||
As at March 31, 2024 (INR) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
As at March 31, 2024 (USD) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
# Remaining life of customer contracts ranges from
Mortgage and hypothecation on intangible assets:
Intangible assets are subject to a pari passu first charge to respective lenders for senior secured bonds, project term loans, buyer's / supplier's credit, working capital loan, debentures, senior secured notes and acceptances as disclosed in Note 18 and Note 23.
Below is the break-up for goodwill:
|
|
|
As at March 31, |
|
|||||
Group of CGU / individual CGU |
|
|
2024 |
|
|
2023 |
|
||
Ostro Energy Group (wind power segment) |
|
|
|
|
|
|
|||
ReNew Vayu Urja (wind power segment) |
|
|
|
|
|
|
|||
Prathamesh Solarfarms (solar power segment) |
|
|
|
|
|
|
|||
Others (wind power segment)* |
|
|
|
|
|
|
|
||
Others (solar power segment)* |
|
|
|
|
|
|
|
||
* includes amount allocated against multiple group of CGUs and the amount allocated to each group of CGU is not material.
The Group undertook the impairment testing of Goodwill assigned to each Individual or Group of CGUs as at March 31, 2024 and 2023 by applying the Value in Use ('VIU') approach. The Group has entered into Power Purchase Agreements (PPA) upto
F-33
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
entitles the Group to a fixed tariff over the tenure of PPAs. Accordingly, the Group for computing the VIU has determined cash flow projections based on fixed tariffs as specified in the PPAs upto the remaining tenure of PPAs and for periods thereafter, the Group has used forecasted tariffs based on assessment provided by an external specialist. The key assumptions used in computation of VIU are the Plant Load Factor (PLF), a measure of average capacity utilisation of a power plant, used in revenue projections, future operating and maintenance expenses and discount rates.
The PLF is determined based on forecasts after considering study of future wind speed (only for wind segment) and past performance; operation and maintenance expenses are based on prevaling prices and quotations received (adjusted for inflation) together with business plans; and discount rates are based on weighted average cost of capital. These assumptions are forward-looking and are affected by future economic and climatic conditions including wind speed.
Based on the results of the impairment test, the estimated value in use of each Group of CGU and individual CGU was more than their respective carrying values, by the following amounts:
|
|
|
As at March 31, |
|
|||||
Group of CGU / individual CGU |
|
|
2024 |
|
|
2023 |
|
||
Ostro Energy Group (wind power segment)1 |
|
|
|
|
|
|
|||
ReNew Vayu Urja (wind power segment)2 |
|
|
|
|
|
|
|||
Prathamesh Solarfarms (solar power segment)3 |
|
|
|
|
|
|
|||
Others (wind power segment)2 |
|
|
|
|
|
|
|
||
Others (solar power segment)3 |
|
|
|
|
|
|
|
||
(1) The Group has engaged external specialists to assist in determining (a) future PLFs and (b) discount rates and computation of VIU. The Group has currently estimated a discount rate of
(2) The Group has currently estimated discount rates ranging between
(3) The Group has currently estimated discount rates ranging between
F-34
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
Leasehold land |
|
|
Building |
|
|
Total |
|
|||
Cost |
|
|
|
|
|
|
|
|
|
|||
As at April 1, 2021 |
|
|
|
|
|
|
|
|
|
|||
Additions during the year |
|
|
|
|
|
— |
|
|
|
|
||
Disposals and adjustments during the year |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
As at March 31, 2022 |
|
|
|
|
|
|
|
|
|
|||
Additions during the year |
|
|
|
|
|
|
|
|
|
|||
Disposals and adjustments during the year |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
As at March 31, 2023 |
|
|
|
|
|
|
|
|
|
|||
Additions during the year |
|
|
|
|
|
|
|
|
|
|||
Disposals and adjustments during the year |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
As at March 31, 2024 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Accumulated depreciation |
|
|
|
|
|
|
|
|
|
|||
As at April 1, 2021 |
|
|
|
|
|
|
|
|
|
|||
Charge for the year (refer Note 31) |
|
|
|
|
|
|
|
|
|
|||
Capitalised during the year |
|
|
— |
|
|
|
|
|
|
|
||
As at March 31, 2022 |
|
|
|
|
|
|
|
|
|
|||
Charge for the year (refer Note 31) |
|
|
|
|
|
|
|
|
|
|||
Capitalised during the year |
|
|
— |
|
|
|
|
|
|
|
||
Disposals and adjustments during the year |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
As at March 31, 2023 |
|
|
|
|
|
|
|
|
|
|||
Charge for the year (refer Note 31) |
|
|
|
|
|
|
|
|
|
|||
Capitalised during the year |
|
|
|
|
|
|
|
|
|
|||
Disposals and adjustments during the year |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
As at March 31, 2024 |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Net book value |
|
|
|
|
|
|
|
|
|
|||
As at April 1, 2022 (INR) |
|
|
|
|
|
|
|
|
|
|||
As at March 31, 2023 (INR) |
|
|
|
|
|
|
|
|
|
|||
As at March 31, 2024 (INR) |
|
|
|
|
|
|
|
|
|
|||
As at March 31, 2024 (USD) |
|
|
|
|
|
|
|
|
|
|||
F-35
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
As at March 31, |
|
|||||||||
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Investment in jointly controlled entities accounted using equity method (refer Note 50(a)) |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
|
As at March 31, |
|
|||||||||
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Trade receivables (refer Note 48) |
|
|
|
|
|
|
|
|
|
|||
Less: impairment allowances for expected credit losses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Non-current |
|
|
|
|
|
|
|
|
|
|||
Current |
|
|
|
|
|
|
|
|
|
|||
Notes:
(i) Trade receivables are non-interest bearing and are generally on terms of
(ii) Includes unbilled revenue of INR
(iii) Refer Note 33(i) for modification of contractual cash flows.
(iv) Movement in the allowance for expected credit loss represents provision created during the year of INR
(v) There is no material movement in trade receivables except for billing and collection.
F-36
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
As at March 31, |
|
|||||||||
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Non-current |
|
|
|
|
|
|
|
|
|
|||
Financial assets at fair value through profit or loss |
|
|
|
|
|
|
|
|
|
|||
Investment in energy funds |
|
|
|
|
|
|
|
|
|
|||
- EIP Deep Decarbonization Frontier Fund I LP |
|
|
|
|
|
|
|
|
|
|||
- Energy Impact Fund SCSp |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Investment in optionally convertible debentures (OCDs) |
|
|
|
|
|
|
|
|
|
|||
|
|
— |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Total |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Current |
|
|
|
|
|
|
|
|
|
|||
Financial assets at fair value through profit or loss |
|
|
|
|
|
|
|
|
|
|||
Investments |
|
|
|
|
|
|
|
|
|
|||
Investment in mutual funds |
|
|
|
|
|
|
|
|
|
|||
Total |
|
|
|
|
|
|
|
|
|
|||
|
|
As at March 31, |
|
|||||||||
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Non-current |
|
|
|
|
|
|
|
|
|
|||
Financial assets at amortised cost |
|
|
|
|
|
|
|
|
|
|||
Security deposits |
|
|
|
|
|
|
|
|
|
|||
Loans to related parties (refer Note 41) |
|
|
|
|
|
|
|
|
|
|||
Deferred consideration receivable |
|
|
|
|
|
|
|
|
|
|||
Bank deposits with remaining maturity for more than twelve months (refer Note 15) |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Financial assets designated as a hedge instrument at fair value |
|
|
|
|
|
|
|
|
|
|||
Derivative instruments- hedge instruments |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Total |
|
|
|
|
|
|
|
|
|
|||
F-37
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
As at March 31, |
|
|||||||||
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Current |
|
|
|
|
|
|
|
|
|
|||
Financial assets at amortised cost |
|
|
|
|
|
|
|
|
|
|||
Loans to related parties (refer Note 41) |
|
|
— |
|
|
|
|
|
|
|
||
Security deposits |
|
|
|
|
|
|
|
|
|
|||
Deferred consideration receivable |
|
|
|
|
|
|
|
|
|
|||
Advances recoverable |
|
|
|
|
|
|
|
|
|
|||
Government grant receivable |
|
|
|
|
|
|
|
|
|
|||
Interest accrued on fixed deposits |
|
|
|
|
|
|
|
|
|
|||
Interest accrued on loans to related parties (refer Note 41) |
|
|
— |
|
|
|
|
|
|
|
||
Others |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Financial assets designated as a hedge instrument at fair value |
|
|
|
|
|
|
|
|
|
|||
Derivative instruments- hedge instruments |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Total |
|
|
|
|
|
|
|
|
|
|||
Loans and receivables are non-derivative financial assets which generate fixed interest income for the Group. The carrying value may be affected by changes in the credit risk of the counterparties.
12A Deferred tax assets (net)
|
|
|
|
As at March 31, |
|
|||||||||
|
|
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
|
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Deferred tax assets (gross) |
|
|
|
|
|
|
|
|
|
|
|
|||
Compound financial instruments |
|
|
|
|
|
|
|
|
|
|
|
|||
Mark to market of derivative instruments |
|
|
|
|
|
|
|
|
|
|
|
|||
Difference in written down value of PPE as per books of account and tax laws |
|
|
|
|
|
|
|
|
|
|
|
|||
Unamortised ancillary borrowing cost |
|
|
|
|
— |
|
|
|
|
|
|
|
||
Provision for decommissioning costs |
|
|
|
|
|
|
|
|
|
|
|
|||
Expected credit losses |
|
|
|
|
|
|
|
|
|
|
|
|||
Losses available for offsetting against future taxable income |
|
|
|
|
|
|
|
|
|
|
|
|||
Unused tax credit (Minimum alternate tax) |
|
|
|
|
|
|
|
|
|
|
|
|||
Lease liabilities |
|
|
|
|
|
|
|
|
|
|
|
|||
Government grant (viability gap funding) |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Others |
|
|
|
|
|
|
|
|
|
|
|
|||
Deferred tax assets (gross) - Total (a) |
|
|
|
|
|
|
|
|
|
|
|
|||
Deferred tax liabilities (gross) |
|
|
|
|
|
|
|
|
|
|
|
|||
Mark to market of derivative instruments |
|
|
|
|
|
|
|
|
|
|
|
|||
Difference in written down value of PPE as per books of account and tax laws |
|
|
|
|
|
|
|
|
|
|
|
|||
Unamortised ancillary borrowing cost |
|
|
|
|
|
|
|
|
|
|
|
|||
Right of use asset |
|
|
|
|
|
|
|
|
|
|
|
|||
Others |
|
|
|
|
|
|
|
|
|
|
|
|||
Deferred tax liabilities (gross) - Total (b) |
|
|
|
|
|
|
|
|
|
|
|
|||
Deferred tax assets (net) (a) - (b) |
|
|
|
|
|
|
|
|
|
|
|
|||
F-38
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
12B Deferred tax liabilities (net)
|
|
|
|
As at March 31, |
|
|||||||||
|
|
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
|
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Deferred tax liabilities (gross) |
|
|
|
|
|
|
|
|
|
|
|
|||
Compound financial instruments |
|
|
|
|
|
|
|
|
|
|
|
|||
Mark to market of derivative instruments |
|
|
|
|
|
|
|
|
|
|
|
|||
Difference in written down value of PPE as per books of account and tax laws |
|
|
|
|
|
|
|
|
|
|
|
|||
Unamortised ancillary borrowing cost |
|
|
|
|
|
|
|
|
|
|
|
|||
Right of use asset |
|
|
|
|
|
|
|
|
|
|
|
|||
Others |
|
|
|
|
|
|
|
|
|
|
|
|||
Deferred tax liabilities (gross) - Total (c) |
|
|
|
|
|
|
|
|
|
|
|
|||
Deferred tax assets (gross) |
|
|
|
|
|
|
|
|
|
|
|
|||
Mark to market of derivative instruments |
|
|
|
|
|
|
|
|
|
|
|
|||
Unamortised ancillary borrowing cost |
|
|
|
|
|
|
|
|
|
|
|
|||
Provision for decommissioning costs |
|
|
|
|
|
|
|
|
|
|
|
|||
Expected credit losses |
|
|
|
|
|
|
|
|
|
|
|
|||
Losses available for offsetting against future taxable income |
|
|
|
|
|
|
|
|
|
|
|
|||
Unused tax credit (Minimum alternate tax) |
|
|
|
|
|
|
|
|
|
|
|
|||
Lease liabilities |
|
|
|
|
|
|
|
|
|
|
|
|||
Government grant (viability gap funding) |
|
|
|
|
|
|
|
|
|
|
|
|||
Others |
|
|
|
|
|
|
|
|
|
|
|
|||
Deferred tax assets (gross) - Total (d) |
|
|
|
|
|
|
|
|
|
|
|
|||
Deferred tax liabilities (net) (c) - (d) |
|
|
|
|
|
|
|
|
|
|
|
|||
12
|
|
For the year ended March 31, |
|
|||||||||||||
|
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
||||
Accounting profit / (loss) before income tax |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
Tax at the India's tax rate of |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
Disallowance under section 94B of the Income Tax Act (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Tax rate differences |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Impact of ICDS related to hedge contracts routed through OCI |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Unabsorbed depreciation and business losses (1) (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in estimates for recoverability of Minimum Alternate Tax |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
Adjustment of tax relating to earlier periods |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
On account of adoption of new tax ordinance |
|
|
|
|
|
|
|
|
|
|
|
|
||||
- MAT credit written off |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
- Recognition / reversal of DTA/ DTL |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Effect of tax holidays and other tax exemptions |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Listing and related expenses |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Other non-deductible expenses |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Tax expense at the effective income tax rate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Current tax expense reported in the consolidated statement of profit or loss |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deferred tax expense reported in the consolidated statement of profit or loss |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Notes
(1) The Group has not recognised DTA in absence of reasonable certainty towards its realisation.
(2) The amount is netted off by INR
F-39
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
12D Reconciliation of DTA (net) and DTL (net):
a) For the year ended March 31, 2022
Particulars |
|
Opening |
|
|
Income / |
|
|
Income / |
|
|
Income / |
|
|
Adjustment on |
|
|
Closing |
|
||||||
Compound financial instruments |
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
||
Gain / (loss) on mark to market of derivative instruments |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|||
Difference in written down value as per books of account and tax laws |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
Unamortised ancillary borrowing cost |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
||
Provision for decommissioning costs |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Expected credit losses |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|||
Fair value gain on financial instruments |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
Unabsorbed depreciation available for offsetting against future taxable income |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|||
Tax losses available for offsetting against future taxable income |
|
|
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
|||
Minimum alternate tax |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|||
Lease liabilities |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Financial guarantee contracts |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Government grant (viability gap funding) |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|||
Right of use asset |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Others |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
|
||
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
b) For the year ended March 31, 2023
Particulars |
|
Opening |
|
|
Income / |
|
|
Income / |
|
|
Income / |
|
|
Acquisition of Non- controlling interest |
|
|
Closing |
|
||||||
Compound financial instruments |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
|
|||
Gain / (loss) on mark to market of derivative instruments |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
Difference in written down value as per books of account and tax laws |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Unamortised ancillary borrowing cost |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Provision for decommissioning costs |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Expected credit losses |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Fair value gain on financial instruments |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Unabsorbed depreciation available for offsetting against future taxable income |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Tax losses available for offsetting against future taxable income |
|
|
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Minimum alternate tax |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Lease liabilities |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Government grant (viability gap funding) |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Right of use asset |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Others |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|||
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
F-40
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
c) For the year ended March 31, 2024
Particulars |
|
Opening |
|
|
Income / |
|
|
Income / |
|
|
Income / |
|
|
Adjustment |
|
|
Closing |
|
||||||
Compound financial instruments |
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
||||
Gain / (loss) on mark to market of derivative instruments |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Difference in written down value as per books of account and tax laws |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
Unamortised ancillary borrowing cost |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
Provision for decommissioning costs |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
Expected credit losses |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Unabsorbed depreciation available for offsetting against future taxable income |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||||
Tax losses available for offsetting against future taxable income |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Minimum alternate tax |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Lease liabilities |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|||
Government grant (viability gap funding) |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Right of use asset |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
Others |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
The Group based on profit projections supported by existing PPAs and underlying contractual agreements believes that the utlisation of entire deferred tax assets is probable. All items of deferred tax assets have an infinite life except for those on tax losses and MAT which can be carried forward for a maximum period
The Group has tax losses amounting to INR
Certain subsidiaries of the Group have undistributed earnings which, if paid out as dividends, would be subject to tax in the hands of recipient. An assessable temporary difference exists, but no deferred tax liability has been recognised as the Parent is able to control timing of distributions from these subsidiaries. The Parent is not expected to distribute these profits from the subsidiaries in the foreseeable future and no material tax charge is expected whenever distribution occurs.
12E There are additional disallowances / additions to returned income of RPL in earlier years on account of share based payment expenses, interest expense and few other disallowances.The management based on past legal precedents and the views of tax specialists believes that it has strong grounds on merit for successful appeal in this matter. The total exposure on the Group on account of such disallowances is INR
F-41
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
As at March 31, |
|
|||||||||
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Non-current |
|
|
|
|
|
|
|
|
|||
Prepayments |
|
|
|
|
|
|
|
|
|||
Capital advance |
|
|
|
|
|
|
|
|
|||
Advances recoverable |
|
|
|
|
|
|
|
|
|||
Balances with government authorities |
|
|
|
|
|
|
|
|
|||
Total |
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Current |
|
|
|
|
|
|
|
|
|||
Prepayments |
|
|
|
|
|
|
|
|
|||
Advances recoverable |
|
|
|
|
|
|
|
|
|||
Balances with government authorities |
|
|
|
|
|
|
|
|
|||
Others |
|
|
|
|
|
|
|
|
|||
Total |
|
|
|
|
|
|
|
|
|||
|
As at March 31, |
|
|||||||||
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Consumables and spares |
|
|
|
|
|
|
|
|
|||
Emission reduction certificates |
|
|
|
|
|
|
|
|
|||
Total |
|
|
|
|
|
|
|
|
|||
|
As at March 31, |
|
|||||||||
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Cash and cash equivalents |
|
|
|
|
|
|
|
|
|||
Cash and cheque on hand |
|
|
|
|
|
|
|
|
|||
Balance with banks |
|
|
|
|
|
|
|
|
|||
- On current accounts |
|
|
|
|
|
|
|
|
|||
- Deposits with original maturity of less than 3 months # |
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Bank balances other than cash and cash equivalents |
|
|
|
|
|
|
|
|
|||
Deposits with |
|
|
|
|
|
|
|
|
|||
- Remaining maturity of less than twelve months # |
|
|
|
|
|
|
|
|
|||
- Remaining maturity of more than twelve months # |
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
Less: amount disclosed under other financial assets (others) (refer Note 11) # |
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total |
|
|
|
|
|
|
|
|
|||
Fixed deposits of INR
# The bank deposits have an original maturity period of
F-42
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Authorised share capital
There is no requirement under the UK Companies Act for the Company to have Authorised Capital.
Issued share capital
|
|
|
|
|
|
Number of |
|
|
Issued capital |
|
|
Share |
|
|||
|
|
|
|
|
|
|
|
|
(INR) |
|
|
(INR) |
|
|||
As at April 1, 2021 (i) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Shares issued during the period (including compulsorily convertible preference shares converted to equity) (ii) |
|
|
|
|
|
|
|
|
|
|||||||
Total (i) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Adjustments / impact pursuant to the Transaction: |
|
|
|
|
|
|
|
|
|
|||||||
- Capital transaction involving issue of shares (net of costs of INR |
|
|
|
|
|
|
|
|
|
|||||||
- Recognition of non-controlling interests |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
||||
- Adjustment to arrive number of equity instruments of the Company |
|
|
( |
) |
|
|
|
|
|
|
||||||
As at August 23, 2021 (iv) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Shares issued during the period (v) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Effect of approved capital reduction* |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Shares pending cancellation* |
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|||
As at March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Shares issued during the year |
|
|
|
|
|
|
|
|
|
|
|
|||||
Shares bought back, held as treasury stock* |
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
As at March 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Shares issued during the year |
|
|
|
|
|
|
|
|
|
|
|
|||||
Shares bought back, held as treasury stock* |
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|||
As at March 31, 2024 (INR) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
As at March 31, 2024 (USD) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
(i) Number of shares presented represents RPL Shares. Equivalent number of equity instruments of the Company will be number of RPL shares presented multiplied by exchange ratio established in the Transaction referred in Note 1 (i.e., 1 RPL share to
(ii) During the year ended March 31, 2022, Series A compulsory convertible preference shares issued to certain existing shareholders were converted into equity shares on August 23, 2021 as per its original terms. Consequently, amortised cost of compulsory convertible preference shares of INR
(iii) Number of shares presented represents shares issued by the Company for the Transaction. Deemed number of shares issued by RPL is
(iv) Number of shares presented represents Company's shares outstanding on consummation of the Transaction.
(v) During the year ended March 31, 2022, the Company has issued class C shares on purchase of shares held by non-controlling interests in RPL. (refer Note 51(a))
(vi) Before consummation of the Transaction, the Company had 1 equity share at par value of USD
*Capital Reduction and Share Repurchase Program
Pursuant to a court order dated February 8, 2022, the Company’s share premium account was cancelled and the amount of INR
On February 2, 2022, the Company’s Board of Directors approved the Company’s proposal to commence a share repurchase program of up to USD
F-43
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Company engaged Credit Suisse Securities (USA) LLC and Mizuho Securities USA LLC as its brokers (the Brokers) for the Share Repurchase Program.
During the year ended March 31, 2024, the Brokers purchased
As at March 31, 2024,
Terms / rights attached to equity shares of RPL
RPL has only one class of equity shares having par value of INR
The equity shares were redeemable at the option of the holders till August 23, 2021 and therefore, were considered a puttable instrument in accordance with IAS 32. Puttable instruments are required to be accounted for as financial liabilities, except where certain conditions are met in accordance with IAS 32, in which case, the puttable instruments may be presented as equity. The equity shares meet the conditions of IAS 32 and are, therefore, classified and accounted for as equity. Pursuant to the BCA (refer Note 1), the Company became legal parent of RPL. Post this transaction, the number and type of equity instruments issued, reflects the equity structure of the Company.
F-44
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Terms / rights attached to equity shares of the Company
The Company has five classes of shares outstanding as follows:
Class of shares |
|
Nominal |
|
Number of |
|
|
Terms / rights |
|||||
a) Class A shares |
|
USD |
|
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|
|
The holders of the Class A ordinary shares shall be entitled to receive distributions, in the form of dividends, return of capital on a winding up or any other means in proportion to the number of Class A ordinary shares held by them and pro rata with all other shares in the capital of the company which are entitled to distributions. Each holder of equity shares is entitled to one vote per share. |
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b) Class B shares |
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USD |
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The holder of the Class B ordinary share shall be entitled to participate in distributions of the company, whether in the form of dividends, returns of capital on a winding up or any other means as per the terms of the articles of association (Articles), only during the period from the date on which the Company's Articles (as adopted on August 20, 2021) were adopted until the date that is three (3) years following the date of adoption. |
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Class B shares are held by CEO of the Company. |
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The Company may in its sole discretion redeem and cancel the Class B Share for par value at any time after the Founder Investors and their respective Affiliates cease to hold any RPL ordinary Shares. |
|||||
F-45
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Class of shares |
|
Nominal |
|
Number of |
|
|
Terms / rights |
|||||
c) Class C shares |
|
USD |
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|
|
The holders of the Class C ordinary shares shall be entitled to receive distributions in the form of dividends, return of capital on a winding up or any other means in proportion to the number of Class C ordinary shares held by them and pro rata with all other shares (as defined in the articles) in the capital of the company which are entitled to distributions. This class of share does not carry voting rights. Each Class C ordinary share shall automatically be re-designated as one (1) Class A ordinary share in the hands of a transferee (other than where such transferee is an affiliate), however, a transferee may continue to hold Class C Ordinary Shares if the conditions of re-designation under the Articles of the Company are not met. |
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d) Class D shares |
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USD |
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The holder of the Class D ordinary share shall be entitled to participate in distributions of the company, whether in the form of dividends, returns of capital on a winding up or any other means as per the terms of the Articles , only during the period from the date on which the Company's Articles (as adopted on August 20, 2021) were adopted until the date that is three (3) years following the date of adoption. |
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The holder is entitled to a number of voting rights from time to time equal to the equivalent voting beneficial shares (as defined in the articles) held by Canada Pension Plan Investment Board (and its affiliates) (as defined in the articles) as of the relevant time. |
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e) Deferred shares |
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USD |
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The holder of the deferred share shall not be entitled to participate in the profits of the Company, shall have no right to attend, speak or vote, either in person or by proxy, at any general meeting of the company or any meeting of a class of members of the company in respect of the deferred share (save where required by law) and shall not be entitled to receive any notice of the meeting. |
|||||
F-46
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
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|
On a return of capital of the company on a winding up or otherwise, the holder of the deferred share shall be entitled to receive out of the assets of the company available for distribution to its shareholders the sum of, in aggregate, $ |
|||||
Total shares |
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17A Retained earnings / (losses)
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(Amounts in INR) |
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As at April 1, 2021 |
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( |
) |
Loss for the year |
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( |
) |
Re-measurement loss on defined benefit plans (net of tax) |
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Acquisition of interest by NCI in subsidiaries |
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Repurchase of vested stock options |
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( |
) |
Debenture redemption reserve created during the year |
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( |
) |
Debenture redemption reserve released on |
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Adjustments / impact pursuant to the Transaction: |
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Distribution / cash paid to RPL’s equity holders |
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( |
) |
Recognition of non-controlling interests pursuant to the Transaction |
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Change in fair value of put option liability / derecognition of non-controlling interests |
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( |
) |
Effect of approved capital reduction (refer Note 16) |
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Shares pending cancellation (refer Note 16) |
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( |
) |
As at March 31, 2022 |
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( |
) |
Loss for the year |
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( |
) |
Re-measurement loss on defined benefit plans (net of tax) |
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Acquisition of interest by NCI in subsidiaries |
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( |
) |
Debenture redemption reserve released on |
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Change in fair value of put option liability / derecognition of non-controlling interests during the year |
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Shares bought back, held as treasury stock (refer Note 16) |
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( |
) |
Allocation of other equity to non controlling interest |
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As at March 31, 2023 |
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( |
) |
Profit for the year |
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Re-measurement loss on defined benefit plans (net of tax) |
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( |
) |
Acquisition of interest by NCI in subsidiaries |
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Debenture redemption reserve released on account of repayment of debentures |
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|||
Change in fair value of put option liability / derecognition of non-controlling interests during the year |
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( |
) |
Shares bought back, held as treasury stock (refer Note 16) |
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( |
) |
Allocation of other equity to non controlling interest |
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As at March 31, 2024 (INR) |
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( |
) |
As at March 31, 2024 (USD) |
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( |
) |
F-47
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Nature and purpose
Retained earnings are the profits / (losses) that the Group has earned / incurred till date, less any transfers to general reserve and/ or other reserves, dividends or other distributions paid to shareholders. It is a free reserve available to the Group and eligible for distribution to shareholders, in case where it is having positive balance representing net earnings till date.
17B Other components of equity
|
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|
(Amounts in INR) |
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As at April 1, 2022* |
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( |
) |
As at March 31, 2023* |
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|
As at March 31, 2024 (INR) * |
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As at March 31, 2024 (USD) * |
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* Represents hedge reserve, share based payment reserve, capital reserve, debenture redemption reserve and foreign currency translation reserve as explained below.
|
|
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|
|
(Amounts in INR) |
|
|
As at April 1, 2021 |
|
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( |
) |
OCI for the year (refer Note 49) |
|
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|
Recognition of non-controlling interests pursuant to the Transaction |
|
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Attributable to non-controlling interests (refer Note 49) |
|
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( |
) |
As at March 31, 2022 |
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( |
) |
OCI for the year (refer Note 49) |
|
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Attributable to non-controlling interests (refer Note 49) |
|
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( |
) |
As at March 31, 2023 |
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( |
) |
OCI for the year (refer Note 49) |
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( |
) |
Attributable to non-controlling interests (refer Note 49) |
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Amount transferred to property, plant and equipment |
|
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As at March 31, 2024 (INR) |
|
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|
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( |
) |
As at March 31, 2024 (USD) |
|
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( |
) |
Nature and purpose
The Group uses hedging instruments as part of its management of foreign currency risk and interest rate risk associated on borrowings. For hedging foreign currency and interest rate risk, the Group uses foreign currency forward contracts, cross currency swaps (CCS), call spreads, foreign currency option contracts and interest rate swaps (IRS). To the extent these hedges are effective, the change in fair value of the hedging instrument is recognised in the cash flow hedging reserve. Amounts recognised in the cash flow hedging reserve is reclassified to the statement of profit or loss when the hedged item affects profit or loss (example: interest payments).
F-48
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
|
|
|
(Amounts in INR) |
|
|
As at April 1, 2021 |
|
|
|
|
|
|
|
Expense for the year |
|
|
|
|
|
|
|
Recognition of non-controlling interests pursuant to the Transaction |
|
|
|
|
|
( |
) |
Repurchase of vested stock options |
|
|
|
|
|
( |
) |
Amount utilised on exercise of stock options |
|
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( |
) |
As at March 31, 2022 |
|
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|
|
Expense for the year |
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|
Shares issued during the year |
|
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( |
) |
As at March 31, 2023 |
|
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|
Expense for the year |
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Shares issued during the year |
|
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( |
) |
As at March 31, 2024 (INR) |
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|
As at March 31, 2024 (USD) |
|
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|
|
Nature and purpose
The share based payment reserve is used to recognise the grant date fair value of options issued to employees under employee stock option plan.
|
|
|
|
|
(Amounts in INR) |
|
|
As at April 1, 2021 |
|
|
|
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|
|
|
Acquisition of non-controlling interest |
|
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|
( |
) |
Recognition of non-controlling interests pursuant to the Transaction |
|
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|
( |
) |
Allocation to non-controlling interest |
|
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|
|
As at March 31, 2022 |
|
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|
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|
( |
) |
Allocation to non-controlling interest |
|
|
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|
|
As at March 31, 2023 |
|
|
|
|
|
( |
) |
Acquisition of non-controlling interest |
|
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|
|
Allocation to non-controlling interest |
|
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|
( |
) |
As at March 31, 2024 (INR) |
|
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|
( |
) |
As at March 31, 2024 (USD) |
|
|
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|
|
( |
) |
Nature and purpose
Capital reserve represents bargain purchase gain on business combinations recognised under Local GAAP prior to date of transition to IFRS. It also includes adjustments recognised directly in equity pertaining to changes in the proportion held by non-controlling interests i.e., difference between the amount by which the non-controlling interests adjusted and the fair value of the consideration paid or received.
F-49
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
|
|
|
(Amounts in INR) |
|
|
As at April 1, 2021 |
|
|
|
|
|
|
|
Debenture redemption reserve created during the year |
|
|
|
|
|
|
|
Recognition of non-controlling interests pursuant to the Transaction |
|
|
|
|
|
( |
) |
Allocation to non-controlling interest |
|
|
|
|
|
( |
) |
Debenture redemption reserve transferred to retained earnings / (losses) during the year |
|
|
|
|
|
( |
) |
As at March 31, 2022 |
|
|
|
|
|
|
|
Debenture redemption reserve transferred to retained earnings / (losses) during the year |
|
|
|
|
|
( |
) |
Allocation to non-controlling interest |
|
|
|
|
|
|
|
As at March 31, 2023 (INR) |
|
|
|
|
|
|
|
Debenture redemption reserve transferred to retained earnings / (losses) during the year |
|
|
|
|
|
( |
) |
Allocation to non-controlling interest |
|
|
|
|
|
|
|
As at March 31, 2024 (INR) |
|
|
|
|
|
|
|
As at March 31, 2024 (USD) |
|
|
|
|
|
|
|
Nature and purpose
As per the Indian Companies Act, 2013, Debenture Redemption Reserve (DRR) is a reserve required to be maintained by the Companies that have issued debentures. The purpose of this reserve is to minimise the risk of default on repayment of debentures as this reserve ensures availability of funds for meeting obligations towards debenture-holders. As per amendments in Companies (Share capital and Debentures) Rules, 2014 the requirement of listed Companies to create Debenture redemption reserve has been removed.
|
|
|
|
|
(Amounts in INR) |
|
|
As at April 1, 2021 |
|
|
|
|
|
|
|
Exchange differences on translation of foreign operations |
|
|
|
|
|
|
|
As at March 31, 2022 |
|
|
|
|
|
|
|
Exchange differences on translation of foreign operations |
|
|
|
|
|
|
|
Allocation of other equity to non controlling interest |
|
|
|
|
|
|
|
As at March 31, 2023 |
|
|
|
|
|
|
|
Exchange differences on translation of foreign operations |
|
|
|
|
|
( |
) |
Allocation of other equity to non controlling interest |
|
|
|
|
|
( |
) |
As at March 31, 2024 (INR) |
|
|
|
|
|
|
|
As at March 31, 2024 (USD) |
|
|
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|
|
Nature and purpose
Exchange differences arising on translation of the foreign operations are recognised in other comprehensive income as described in accounting policy and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the foreign operation is disposed-off.
F-50
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
|
|
|
|
Non-current |
|
|
Current |
|
||||||||||||||||||
|
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|
|
As at March 31, |
|
|
As at March 31, |
|
||||||||||||||||||
|
|
Notes |
Interest |
Maturity |
|
2023 |
|
|
2024 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
||||||
|
|
|
|
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
||||||
Debentures |
|
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|
||||||
- Non convertible debentures (secured) |
|
(i) |
|
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||||||||
- Compulsorily convertible debentures (unsecured) |
(ii) |
|
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|
|
— |
|
|
|
— |
|
|
|
— |
|
||||||
- Optionally convertible debentures (unsecured) |
|
(iii) |
|
|
— |
|
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|
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|
|
— |
|
|
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— |
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|
|
— |
|
||||
Term loan from banks (secured) |
|
(iv) |
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|
||||||||
Term loan from financial institutions (secured) |
|
(v) |
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|
||||||||
Senior secured notes |
|
(vi) |
|
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|
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|
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|
|
— |
|
|
|
— |
|
|
|
— |
|
|||||
Interest-bearing loans and borrowings - total # |
|
|
|
|
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|
||||||
Amount disclosed under the head 'Interest-bearing loans and borrowings - short term' (refer Note 23) |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Interest-bearing loans and borrowings - net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|||
# Certain borrowings included above are guaranteed by RPL on behalf of the Group entities. Further, certain securities held in subsidiary companies are pledged with banks and financial institutions as security for financial facilities obtained by subsidiary companies.
Notes:
The debentures are secured by way of first pari passu charge on the respective Group company’s immovable properties, movable assets, current assets, cash accruals including but not limited to current assets, receivables, book debts, cash and bank balances, loans and advances etc. present and future (refer Note 18(b)).
Terms of conversion of CCDs
Entity |
|
Tenure |
|
Total |
|
|
Maturity date |
|
Number of |
|
|
Interest |
|
Moratorium |
|
Conversion |
||
ReNew Solar Energy (Jharkhand Three) Private Limited |
|
|
|
|
|
|
|
|
|
Not applicable |
|
|||||||
IB Vogt Solar Seven Private Limited |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Renew Surya Roshini Private Limited |
|
|
|
|
|
|
|
|
|
|
Not applicable |
|
|
|||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
F-51
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Terms of conversion of OCDs
Entity |
|
Tenure |
|
Total |
|
|
Maturity |
|
Number of |
|
|
Interest |
|
Moratorium |
|
Conversion |
||
Renew Surya Ojas Private Limited |
|
|
|
|
|
|
|
|
|
|
Not applicable |
|
||||||
Secured by pari passu first charge by way of mortgage of all the present and future immovable properties, hypothecation of movable assets, book debt, operating cash flows, receivables, commissions, revenue, all bank accounts and assignment of all rights, title, interests, benefits, claims etc. of project documents and insurance contracts of the respective Group company. These loans usually have repayment cycle of monthly / quarterly payments.
Secured by a first pari passu charge by way of mortgage on immovable properties, first pari passu charge by way of hypothecation of tangible moveable assets, first charge on all the current assets and accounts. Further secured by way of assignment of all the rights, title, interest, benefit, claims and demands under all the project agreements, letter of credit, insurance contracts and proceeds, guarantees, performance bond etc. of the respective company. These loans usually have repayment cycle of monthly / quarterly payments.
Notes are secured by way of exclusive mortgage over immovable properties and exclusive charge by way of hypothecation of tangible and intangible movable assets. Further secured by way of hypothecation over rights and benefit, claims and demands under all the project agreements, letter of credit, insurance contracts and proceeds, guarantees, performance bond etc. of the company. Secondary charge over the account receivables, book debts and cash flows. The senior secured notes shall be repaid through bullet payments starting from July 2026 to July 2028.
F-52
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
|
|
|
|
|
Numbers of NCDs outstanding |
|
|
Outstanding amount |
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
Face value per |
|
|
As at March 31, |
|
|
As at March 31, |
|
|
|
|
|
|
|
|
|
|||||||||||||||
Listing status |
|
Debenture Series |
|
NCD (INR) |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|
Nominal |
|
Earliest redemption date |
|
Last date of repayment |
|
Terms of repayment |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|
|
|
|
|
|
|
|
||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Series-2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Series-3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Series-A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Series-B |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Series-C |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Not applicable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total (gross) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Transaction costs, discount on issue and premium on redemption |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
F-53
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
As at March 31, |
|
|||||||||
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Non-current |
|
|
|
|
|
|
|
|
|
|||
Lease liabilities (refer Note 37) |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Current |
|
|
|
|
|
|
|
|
|
|||
Lease liabilities (refer Note 37) |
|
|
|
|
|
|
|
|
|
|||
Total |
|
|
|
|
|
|
|
|
|
|||
|
|
As at March 31, |
|
|||||||||
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Non-current |
|
|
|
|
|
|
|
|
|
|||
Liability for put options with non-controlling interests* |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Financial liabilities at amortised cost |
|
|
|
|
|
|
|
|
|
|||
Liability for operation and maintenance |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Financial liabilities designated as a hedge instrument at fair value |
|
|
|
|
|
|
|
|
|
|||
Derivative instruments - hedge instruments |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Current |
|
|
|
|
|
|
|
|
|
|||
Liability for put options with non-controlling interests* |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Financial liabilities at amortised cost |
|
|
|
|
|
|
|
|
|
|||
Capital creditors |
|
|
|
|
|
|
|
|
|
|||
Purchase consideration payable |
|
|
|
|
|
|
|
|
|
|||
Liability for operation and maintenance |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Financial liabilities designated as a hedge instrument at fair value |
|
|
|
|
|
|
|
|
|
|||
Derivative instruments - hedge instruments |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Financial liabilities at fair value through profit or loss |
|
|
|
|
|
|
|
|
|
|||
Derivative instruments - share warrants (refer Note 39) |
|
|
|
|
|
|
|
|
|
|||
Total |
|
|
|
|
|
|
|
|
|
|||
*Non-controlling shareholders of RPL have an option to offload their shareholding to the Company in accordance with the terms mentioned in the BCA at fair value of shares for cash on the date of exercise of the Put option. Put option liability with non-controlling interest accounted for at fair value. Subsequent changes to the put option liability are treated as equity transaction and hence accounted for in equity (refer Note 2.3 and 41).
F-54
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
As at March 31, |
|
|||||||||
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Non-current |
|
|
|
|
|
|
|
|
|
|||
Deferred government grant* |
|
|
|
|
|
|
|
|
|
|||
Provision for gratuity (refer Note 36) |
|
|
|
|
|
|
|
|
|
|||
Others |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Current |
|
|
|
|
|
|
|
|
|
|||
Deferred government grant* |
|
|
|
|
|
|
|
|
|
|||
Provision for gratuity (refer Note 36) |
|
|
|
|
|
|
|
|
|
|||
Provision for compensated absences |
|
|
|
|
|
|
|
|
|
|||
Advance received against sale of assets |
|
|
|
|
|
— |
|
|
|
— |
|
|
Statutory dues payable |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
* Movement in the deferred government grant is as below:
Opening balance |
|
|
|
|
|
|
|
|
|
|||
Released to the statement of profit or loss |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total |
|
|
|
|
|
|
|
|
|
|
|
As at March 31, |
|
|||||||||
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Non-current |
|
|
|
|
|
|
|
|
|
|||
Provision for decommissioning costs |
|
|
|
|
|
|
|
|
|
|||
Total |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
Provision for decommissioning costs |
|
||
As at April 1, 2021 |
|
|
|
|
|
|
|
|
Arised during the year |
|
|
|
|
|
|
|
|
Unwinding of discount on provisions |
|
|
|
|
|
|
|
|
Acquisition of subsidiaries |
|
|
|
|
|
|
|
|
Adjustment during the year* |
|
|
|
|
|
|
( |
) |
As at March 31, 2022 |
|
|
|
|
|
|
|
|
Arised during the year |
|
|
|
|
|
|
|
|
Unwinding of discount on provisions |
|
|
|
|
|
|
|
|
Adjustment during the year* |
|
|
|
|
|
|
|
|
As at March 31, 2023 |
|
|
|
|
|
|
|
|
Arised during the year |
|
|
|
|
|
|
|
|
Disposal of subsidiaries |
|
|
|
|
|
|
( |
) |
Unwinding of discount on provisions |
|
|
|
|
|
|
|
|
Adjustment during the year* |
|
|
|
|
|
|
( |
) |
As at March 31, 2024 (INR) |
|
|
|
|
|
|
|
|
As at March 31, 2024 (USD) |
|
|
|
|
|
|
|
|
F-55
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
* Adjustment during the year relates to revision in the provision for decommissioning costs on account of changes in the estimated future costs, or in the discount rate applied as at the end of reporting period.
Provision has been recognised for decommissioning costs associated with land taken on leases wherein the Group is committed to decommission the site as a result of construction of wind and solar power projects.
|
|
As at March 31, |
|
|||||||||
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Working capital term loan (secured) |
|
|
|
|
|
|
|
|
|
|||
Acceptances (secured) |
|
|
|
|
|
|
|
|
|
|||
Buyer's / supplier's credit (secured) |
|
|
— |
|
|
|
|
|
|
|
||
Term loan from banks and financial institutions (secured) |
|
|
|
|
|
|
|
|
|
|||
Current maturities of long term interest-bearing loans and borrowings (refer Note 18 and Note 2.4) |
|
|
|
|
|
|
|
|
|
|||
Total # |
|
|
|
|
|
|
|
|
|
|||
Working capital term loan (secured)
The term loan from bank carries interest ranging from
Acceptances (secured)
Acceptances represent creditors to whom banks have issued letter of credits. The letter of credits are secured by pari passu charge over all present and future current assets and movable fixed assets of the respective project Company for which such acceptances are taken and the discount rate of acceptances ranges from
Buyer's / supplier's credit (secured)
Buyer's/ Supplier credit carries an interest rate of
Term loan from banks and financial institutions (secured)
The loan carries interest at the rate of Axis Bank’s 6 month Marginal Cost of Funds Based Lending Rate ('MCLR') plus
# Certain borrowings included above are guaranteed by RPL on behalf of the Group entities. Further, certain securities held in subsidiary companies are pledged with banks and financial institutions as security for financial facilities obtained by subsidiary companies.
F-56
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
As at March 31, |
|
|||||||||
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Current |
|
|
|
|
|
|
|
|
|
|||
Trade payables |
|
|
|
|
|
|
|
|
|
|||
Total |
|
|
|
|
|
|
|
|
|
|||
|
|
For the year ended March 31, |
|
|||||||||||
|
|
2022 |
|
|
2023 |
|
2024 |
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
(INR) |
|
(USD) |
|
||||
Sale of power |
|
|
|
|
|
|
|
|
|
|
||||
Transmission line projects |
|
|
— |
|
|
|
|
|
|
|
|
|||
Others |
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
|
|
|
|
|
|
|
||||
The above revenue includes (a) revenue from contract with customers of INR
The Group recognised impairment losses on receivables arising from contracts with customers, included under other expenses in the consolidated statement of profit or loss, amounting to INR
'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 IFRS 15, 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, except to the extent stated in Note 53. The cost over-runs which are pending approval of customers have been excluded for this disclosure because these were not included in the transaction price. These cost over-runs were excluded from the transaction price in accordance with the guidance on constraining estimates of variable consideration.
|
|
|
|
As at March 31, |
|
|||||||
|
|
|
|
2023 |
|
2024 |
|
2024 |
|
|||
|
|
|
|
(INR) |
|
(INR) |
|
(USD) |
|
|||
Trade receivables (refer Note 9) |
|
|
|
|
|
|
|
|
|
|||
Contract assets (refer Note 53) |
|
|
|
|
|
|
|
|
|
|||
F-57
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
For the year ended March 31, |
|
|||||||||||
|
|
2022 |
|
|
2023 |
|
2024 |
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
(INR) |
|
(USD) |
|
||||
Income from sale of emission reduction certificates |
|
|
|
|
|
|
|
|
|
|
||||
Others |
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
|
|
|
|
|
|
|
||||
|
|
For the year ended March 31, |
|
|||||||||||
|
|
2022 |
|
|
2023 |
|
2024 |
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
(INR) |
|
(USD) |
|
||||
Late payment surcharge from customers |
|
|
— |
|
|
|
|
|
|
|
|
|||
Total |
|
|
— |
|
|
|
|
|
|
|
|
|||
|
|
For the year ended March 31, |
|
|||||||||||
|
|
2022 |
|
|
2023 |
|
2024 |
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
(INR) |
|
(USD) |
|
||||
Interest income accounted at amortised cost |
|
|
|
|
|
|
|
|
|
|
||||
- on fixed deposit with banks |
|
|
|
|
|
|
|
|
|
|
||||
- on loan given to third party |
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
- on safeguard duty recoverable |
|
|
|
|
|
|
|
|
|
|
||||
- on loan given to related parties (refer Note 41) |
|
|
|
|
|
— |
|
|
|
|
|
|||
- others |
|
|
|
|
|
|
|
|
|
|
||||
Gain on fair value changes on derivative instruments (other than hedge instruments) |
|
|
|
|
|
|
|
|
|
|
||||
Unwinding of contract assets (refer Note 53) |
|
|
— |
|
|
|
|
|
|
|
|
|||
Unwinding of financial assets (refer Note 33(i)) |
|
|
— |
|
|
|
|
|
|
|
|
|||
Total |
|
|
|
|
|
|
|
|
|
|
||||
|
|
For the year ended March 31, |
|
|||||||||||
|
|
2022 |
|
|
2023 |
|
2024 |
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
(INR) |
|
(USD) |
|
||||
Government grant |
|
|
|
|
|
|
|
|
|
|
||||
- generation based incentive |
|
|
|
|
|
|
|
|
|
|
||||
- viability gap funding |
|
|
|
|
|
|
|
|
|
|
||||
Compensation for loss of revenue |
|
|
|
|
|
|
|
|
|
|
||||
Gain on sale of property, plant and equipment |
|
|
|
|
|
|
|
|
|
|
||||
Insurance claim |
|
|
|
|
|
|
|
|
|
|
||||
Gain on derivative instruments designated as cash flow hedge (net) |
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
Gain on disposal of subsidiaries (net) (refer Note 35) |
|
|
|
|
|
— |
|
|
|
|
|
|||
Excess provisions written back |
|
|
|
|
|
|
|
|
|
|
||||
Commission on financial guarantee contracts (refer Note 41(a)) |
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
Miscellaneous income |
|
|
|
|
|
|
|
|
|
|
||||
Fair value change of mutual fund (including realised gain) |
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
|
|
|
|
|
|
|
||||
F-58
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
For the year ended March 31, |
|
|||||||||||
|
|
2022 |
|
|
2023 |
|
2024 |
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
(INR) |
|
(USD) |
|
||||
Salaries, wages and bonus |
|
|
|
|
|
|
|
|
|
|
||||
Contribution to provident and other funds (refer Note 36) |
|
|
|
|
|
|
|
|
|
|
||||
Share based payments (refer Note 38) |
|
|
|
|
|
|
|
|
|
|
||||
Gratuity expense (refer Note 36) |
|
|
|
|
|
|
|
|
|
|
||||
Staff welfare expenses |
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
|
|
|
|
|
|
|
||||
|
|
For the year ended March 31, |
|
|||||||||||
|
|
2022 |
|
|
2023 |
|
2024 |
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
(INR) |
|
(USD) |
|
||||
Depreciation of property, plant and equipment (refer Note 5) |
|
|
|
|
|
|
|
|
|
|
||||
Amortisation of intangible assets (refer Note 6) |
|
|
|
|
|
|
|
|
|
|
||||
Depreciation of right of use assets (refer Note 7) |
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
|
|
|
|
|
|
|
||||
|
|
For the year ended March 31, |
|
|||||||||||
|
|
2022 |
|
|
2023 |
|
2024 |
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
(INR) |
|
(USD) |
|
||||
Legal and professional fees |
|
|
|
|
|
|
|
|
|
|
||||
Corporate social responsibility |
|
|
|
|
|
|
|
|
|
|
||||
Travelling and conveyance |
|
|
|
|
|
|
|
|
|
|
||||
Lease rent relating to short term leases |
|
|
|
|
|
|
|
|
|
|
||||
Director's commission |
|
|
|
|
|
|
|
|
|
|
||||
Printing and stationery |
|
|
|
|
|
|
|
|
|
|
||||
Rates and taxes |
|
|
|
|
|
|
|
|
|
|
||||
Insurance |
|
|
|
|
|
|
|
|
|
|
||||
Operation and maintenance |
|
|
|
|
|
|
|
|
|
|
||||
Repair and maintenance |
|
|
|
|
|
|
|
|
|
|
||||
Loss on sale / damage of property plant and equipment |
|
|
|
|
|
|
|
|
|
|
||||
Bidding expenses |
|
|
|
|
|
|
|
|
|
|
||||
Advertising and sales promotion |
|
|
|
|
|
|
|
|
|
|
||||
Impairment of capital work in progress |
|
|
|
|
|
|
|
|
|
|
||||
Security charges |
|
|
|
|
|
|
|
|
|
|
||||
Communication costs |
|
|
|
|
|
|
|
|
|
|
||||
Impairment of carbon credit |
|
|
— |
|
|
|
|
|
|
|
|
|||
Impairment of inventory |
|
|
|
|
|
|
|
|
|
|
||||
Impairment allowances for financial assets |
|
|
|
|
|
|
|
|
|
|
||||
Donation |
|
|
— |
|
|
|
— |
|
|
|
|
|
||
Liquidated damages |
|
|
— |
|
|
|
|
|
|
|
|
|||
Miscellaneous expenses |
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
|
|
|
|
|
|
|
||||
F-59
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Finance costs and fair value change in derivative instruments |
|
For the year ended March 31, |
|
|||||||||||
|
|
2022 |
|
|
2023 |
|
2024 |
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
(INR) |
|
(USD) |
|
||||
Interest expense# |
|
|
|
|
|
|
|
|
|
|
||||
Bank charges |
|
|
|
|
|
|
|
|
|
|
||||
Option premium amortisation |
|
|
|
|
|
|
|
|
|
|
||||
Loss on fair value changes on derivative instruments* |
|
|
|
|
|
|
|
|
|
|
||||
Loss on account of modification of contractual cash flows (refer Note (i) below) |
|
|
— |
|
|
|
|
|
|
|
|
|||
Unwinding of discount on provisions |
|
|
|
|
|
|
|
|
|
|
||||
Unamortised ancillary borrowing cost written off |
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
|
|
|
|
|
|
|
||||
#Includes interest on compulsorily convertible preference shares and lease liabilities of INR
*Includes cumulative losses that were reported in equity and have been transferred to statement of profit or loss in respect of forecasted transaction that are no longer expected to occur.
The Ministry of Power in its Gazette Notification dated June 3, 2022, established rules providing settlement mechanism for the amounts owed by generating companies, inter-state transmission licensees and electricity trading licensees.
The Group's customers subject to this scheme shall pay the outstanding receivables due to the Group in equated monthly instalments without interest. Accordingly, the Group has recorded the modification in terms of the contract and the resultant loss primarily due to the extended interest free credit period has been recognised as a finance cost in the statement of profit or loss.
Unwinding income on these trade receivables of INR
F-60
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Earnings / (loss) per share |
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||
The following reflects the earnings / (loss) and share data used for the basic and diluted EPS computations: |
|
|||||||||||||
|
|
For the year ended March 31, |
|
|||||||||||
|
|
2022 |
|
|
2023 |
|
2024 |
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
(INR) |
|
(USD) |
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
Earning/ (loss) attributable to equity holders of the parent |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
||
Add: Loss attributable to one class B share @ |
|
|
|
|
|
|
|
|
|
|
||||
Add: Loss attributable to one class D share ^ |
|
|
|
|
|
|
|
|
|
|
||||
Earning/ (loss) attributable to equity holders of Class A and C for basic and diluted earnings |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Earning / (loss) per share: Basic |
|
|
|
|
|
|
|
|
|
|
||||
Equity shares: Class A shares (in absolute INR and USD, par value of USD |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
||
Equity shares: Class C shares (in absolute INR and USD, par value of USD |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Earning / (loss) per share: Diluted |
|
|
|
|
|
|
|
|
|
|
||||
Equity shares: Class A shares (in absolute INR and USD, par value of USD |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
||
Equity shares: Class C shares (in absolute INR and USD, par value of USD |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
||
|
|
|
|
For the year ended March 31, |
|
|||||||
|
|
|
|
2022 |
|
2023 |
|
2024 |
|
|||
Weighted average number of equity shares in calculating basic EPS* |
|
|
|
|
|
|
|
|
|
|||
Weighted Average number of shares of RPL |
|
|
|
|
|
|
|
|
|
|||
Class A shares of the Company |
|
|
|
|
|
|
|
|
|
|||
Class C shares of the Company |
|
|
|
|
|
|
|
|
|
|||
Weighted average number of equity shares in calculating basic EPS |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Computation of Weighted average number of equity shares in calculating diluted EPS# |
|
|
|
|
|
|
|
|
|
|||
Weighted average number of equity shares in calculating basic EPS |
|
|
|
|
|
|
|
|
|
|||
Impact of share options (dilutive) |
|
|
|
|
— |
|
|
— |
|
|
|
|
Weighted average number of equity shares in calculating diluted EPS |
|
|
|
|
|
|
|
|
|
|||
* The weighted average number of ordinary shares outstanding for the year ended March 31, 2024, 2023 and 2022:
(a) the number of ordinary shares outstanding from April 1, 2021 to August 23, 2021 is computed on the basis of the weighted average number of ordinary shares of RPL outstanding during the period multiplied by the exchange ratio established in the Transaction (i.e.,
(b) the number of ordinary shares outstanding from August 24, 2021 to March 31, 2022, April 1, 2022 to March 31, 2023 and April 1, 2023 to March 31, 2024 is the actual number of ordinary shares of the Company outstanding during that period.
@ Class B share is not the most subordinate to other classes of equity instruments as per IAS 33. Refer Note 16 for terms of Class B share.
^ Class D share is a redeemable share and therefore, is not considered as ordinary shares as per IAS 33. Refer Note 16 for terms of Class D share.
F-61
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
# Since the effect of all potential equity shares other than mentioned above were anti-dilutive in year ended March 2024, 2023 and 2022, it has not been considered for the purpose of computing diluted earnings per share.
Assets and liabilities of the entity sold at the date of disposal
Particulars |
|
|
|
|
Amount |
|
|
Assets |
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
|
|
|
|
|
Bank balances other than cash and cash equivalents |
|
|
|
|
|
|
|
Right of use assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
|
Trade receivables |
|
|
|
|
|
|
|
Other assets |
|
|
|
|
|
|
|
Total assets |
|
(a) |
|
|
|
||
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Interest-bearing loans and borrowings |
|
|
|
|
|
|
|
Lease liabilities |
|
|
|
|
|
|
|
Provisions |
|
|
|
|
|
|
|
Trade payables |
|
|
|
|
|
|
|
Other liabilities |
|
|
|
|
|
|
|
Total liabilities |
|
(b) |
|
|
|
||
|
|
|
|
|
|
|
|
Net assets sold |
|
(c) = (a) - (b) |
|
|
|
||
Sales consideration |
|
(d) |
|
|
|
||
Gain on sale |
|
(d) - (c) |
|
|
|
||
|
|
|
|
|
|
|
|
Consideration satisfied by: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
|
The results of the subsidiary sold included in the consolidated statement of profit or loss were as follows:
|
|
|
For the year ended March 31, |
|
|||||
|
|
|
2024 |
|
|
2023 |
|
||
|
|
|
|
|
|
|
|
||
Income |
|
|
|
|
|
|
|
||
Expenses |
|
|
|
( |
) |
|
|
( |
) |
Profit before tax |
|
|
|
|
|
|
|
||
Income tax expense |
|
|
|
( |
) |
|
|
( |
) |
Profit after tax |
|
|
|
|
|
|
|
||
F-62
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Impact on consolidated statement of cash flows
During the year ended March 31, 2024, the aforesaid subsidiary contributed INR
Net cash inflow arising on disposal |
|
|
|
|
|
|
|
Consideration received in cash and cash equivalents |
|
|
|
|
|
|
|
Less: cash and cash equivalents disposed |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
Name of subsidiary |
|
|
Date of loss of control |
Vivasvat Solar Energy Private Limited |
|
|
|
Izra Solar Energy Private Limited |
|
|
|
Abha Sunlight Private Limited |
|
|
|
Nokor Bhoomi Private Limited |
|
|
|
Nokor Solar Energy Private Limited |
|
|
Assets and liabilities of entities sold at the date of disposal
Particulars |
|
|
|
|
Amount |
|
|
Assets |
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
|
|
|
|
|
Bank balances other than cash and cash equivalents |
|
|
|
|
|
|
|
Right of use assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
|
Trade receivables |
|
|
|
|
|
|
|
Other assets |
|
|
|
|
|
|
|
Total assets |
|
(a) |
|
|
|
||
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Interest-bearing loans and borrowings |
|
|
|
|
|
|
|
Lease liabilities |
|
|
|
|
|
|
|
Provisions |
|
|
|
|
|
|
|
Trade payables |
|
|
|
|
|
|
|
Other liabilities |
|
|
|
|
|
|
|
Total liabilities |
|
(b) |
|
|
|
||
|
|
|
|
|
|
|
|
Net assets sold |
|
(c) = (a) - (b) |
|
|
|
||
Sales consideration |
|
(d) |
|
|
|
||
Gain on sale |
|
(d) - (c) |
|
|
|
||
|
|
|
|
|
|
|
|
Consideration satisfied by: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
|
F-63
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
The results of subsidiaries sold included in the consolidated statement of profit or loss were as follows:
|
|
|
For the year ended March 31, |
|
|||||
|
|
|
2024 |
|
|
2023 |
|
||
|
|
|
|
|
|
|
|
||
Income |
|
|
|
|
|
|
|
||
Expenses |
|
|
|
( |
) |
|
|
( |
) |
Profit before tax |
|
|
|
( |
) |
|
|
|
|
Income tax expense |
|
|
|
|
|
|
( |
) |
|
Profit after tax |
|
|
|
( |
) |
|
|
|
|
Impact on consolidated statement of cash flows
During the year ended March 31, 2024, the subsidiaries sold used INR
Net cash inflow arising on disposal |
|
|
|
|
|
|
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Consideration received in cash and cash equivalents |
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Less: cash and cash equivalents disposed |
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( |
) |
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|
|
On October 4, 2021, the Board of the Company passed a resolution to sell its two solar roof top projects housed in RPL and ReNew Solar Power Private Limited as well as
(i) Renew Distributed Solar Services Private Limited |
(xi) Renew Sun Ability Private Limited |
(ii) Renew Distributed Solar Energy Private Limited |
(xii) ReNew Mega Light Private Limited |
(iii) Renew Distributed Solar Power Private Limited |
(xiii) Renew Sun Flash Private Limited |
(iv) Renew Surya Prakash Private Limited |
(xiv) Renew Mega Urja Private Limited |
(v) Renew Saur Vidyut Private Limited |
(xv) Renew Mega Spark Private Limited |
(vi) ReNew Energy Services Private Limited |
(xvi) Renew Green Energy Private Limited |
(vii) ReNew Solar Sun Flame Private Limited |
(xvii) Renew Green Power Private Limited |
(viii) Renew Solar Daylight Energy Private Limited |
(xviii) Renew Green Solutions Private Limited |
(ix) Zorya Distributed Power Services Private Limited |
(xix) Renew Mega Green Private Limited |
(x) Renew Clean Tech Private Limited |
(xx) Renew Surya Mitra Private Limited |
On October 4, 2021, the loss of control over two solar rooftop projects and Solar Energy and its subsidiaries within the next twelve months became highly probable and met the criteria to be classified as a disposal group held for sale and accordingly, assets and liabilities related to the ReNew Solar along with its subsidiaries were classified as held for sale. The Company had entered into a share purchase agreement with Fourth Partner Energy for sale of Solar Energy and its subsidiaries and
F-64
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
The total sale consideration on account of above transactions was INR
During the year ended March 31, 2024, the aformentioned novation agreement in relation to both the roof top projects could not get executed and the Group decided against its plan to sell both rooftop projects to Fourth Partner. Accordingly, the Group ceased to classify both of these projects as held for sale. The depreciation charged on these two projects for the year ended March 31, 2024 amounted to INR
Refer Note (c) below for assets held for sale and the details of assets and liabilities derecognised on account of the aforementioned sale of subsidiaries.
The Group had entered into a share purchase agreement dated March 29, 2022 with Shekhawati Solar Power Private Limited to sell
Refer Note (c) below for the details of assets and liabilities which have been derecognised.
Particulars |
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Solar Energy and its subsidiaries |
|
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Shekhawati Solar Park Private Limited |
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||
|
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(INR) |
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(INR) |
|
||
Date of loss of control |
|
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January 18, 2022 |
|
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March 29, 2022 |
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||
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Assets |
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Property, plant and equipment |
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Intangible assets |
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— |
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Trade receivables |
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— |
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Bank balances other than cash and cash equivalents |
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Cash and cash equivalents |
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Deferred tax assets (net) |
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— |
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Other non-current assets |
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Other current financial assets |
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Other current assets |
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— |
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Non-current tax assets (net) |
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— |
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Other assets |
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||
Total assets |
(a) |
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||
F-65
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Particulars |
|
|
Solar Energy and its subsidiaries |
|
|
Shekhawati Solar Park Private Limited |
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||
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(INR) |
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(INR) |
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Liabilities |
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Interest-bearing loans and borrowings |
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— |
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Deferred government grant - non-current |
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— |
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Deferred government grant - current |
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— |
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Others current financial liabilities |
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— |
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Deferred tax liabilities (net) |
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— |
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Trade payables |
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Other non-current liabilities |
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— |
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Current tax liabilities (net) |
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— |
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Total liabilities |
(b) |
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Non controlling interest |
(c) |
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— |
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Net assets sold |
(d) = (a) - (b) - (c) |
|
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(ii) Disposal group held for sale |
|
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Two solar rooftop projects |
|
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Shekhawati Solar Park Private Limited |
|
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Assets |
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Property, plant and equipment (excluding impairment loss of INR |
(e) |
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— |
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Total assets |
(f) = (d) + (e) |
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Total liabilities |
(g) |
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— |
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— |
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Net assets |
(h) = (f) - (g) |
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||
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Total consideration |
(i) |
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Total gain / (loss) |
(i) - (h) |
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( |
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Consideration satisfied by: |
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Cash and cash equivalents |
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Deferred consideration receivable |
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— |
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|
||
The deferred consideration represents the fair value of consideration receivable and the same is contractually recoverable on the receipt of receivables by Solar Energy and its subsidiaries from its customers. There was no reclassification of amounts from OCI relating to Solar Energy and its subsidiaries and Shekhawati Solar Park Private Limited
|
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|
For the year ended March 31, |
|
|||||
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2021 |
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2022 |
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(INR) |
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(INR) |
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Income |
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Expenses |
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( |
) |
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( |
) |
Profit before tax |
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Income tax (expense) / income |
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( |
) |
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Profit for the year |
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|
||
F-66
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
In accordance with the IFRS 5, depreciation and amortisation on the assets of Solar Energy and its subsidiaries and Shekhawati Solar Park Private Limited ceased as at October 4, 2021 and March 29, 2022, respectively.
During the year ended March 31, 2022, Solar Energy and its subsidiaries and Shekhawati Solar Park Private Limited contributed INR
Net cash inflow arising on disposal: |
|
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Consideration received in cash and cash equivalents |
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Less: cash and cash equivalents disposed |
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( |
) |
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|
Retirement benefit in the form of provident fund is a defined contribution scheme. The contributions to the provident fund are charged to the consolidated statement of profit or loss for the year when the contributions are due. The Group has no obligation, other than the contribution payable to the provident fund.
The Group has a defined benefit gratuity plan.
The following tables summarise the components of net benefit expense recognised in the consolidated statement of profit or loss and the unfunded status and amounts recognised in the consolidated statement of financial position for gratuity.
|
|
|
For the year ended March 31, |
|
|||||||||||||
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2022 |
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2023 |
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2024 |
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2024 |
|
||||
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(INR) |
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(INR) |
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(INR) |
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(USD) |
|
||||
Net employees benefit expense recognised in 'Employee benefits expense' |
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Current service cost |
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||||
Interest cost on benefit obligation |
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||||
Net benefit expense* |
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||||
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||||
* This amount is inclusive of amount capitalised in different projects. |
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Net (expense) / income recognised in OCI |
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( |
) |
|
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( |
) |
||
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As at March 31, |
|
|||||||||
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2023 |
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2024 |
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2024 |
|
|||
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(INR) |
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(INR) |
|
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(USD) |
|
|||
Defined benefit liability |
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|||
Present value of unfunded obligation |
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|
|||
Net liability |
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|
|||
F-67
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
|
For the year ended March 31, |
|
|||||||||||||
|
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2022 |
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2023 |
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2024 |
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2024 |
|
||||
|
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(INR) |
|
|
(INR) |
|
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(INR) |
|
|
(USD) |
|
||||
Changes in the present value of the defined benefit obligation |
|
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|
||||
Opening defined benefit obligation |
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|
||||
Current service cost |
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|
||||
Interest cost |
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|
||||
Benefits paid |
|
|
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( |
) |
|
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( |
) |
|
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( |
) |
|
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( |
) |
Liabilities assumed / (settled) |
|
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( |
) |
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( |
) |
|
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( |
) |
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|
||||
Remeasurements during the year due to: |
|
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|
||||
- Experience adjustments |
|
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|
||||
- Change in financial assumptions |
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( |
) |
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|
|||
- Change in demographic assumptions |
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( |
) |
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|
|||
Liabilities assumed under business combination |
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|
||||
Assets extinguished on curtailments / settlements |
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( |
) |
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|
|||
Closing defined benefit obligation |
|
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|
||||
Since the entire amount of plan obligation is unfunded, changes in fair value of plan assets, categories of plan assets as a percentage of the fair value of total plan assets and Group’s expected contribution to the plan assets for the next year is not given.
|
|
|
|
|
For the year ended March 31, |
|
|||||||||
|
|
|
|
|
2022 |
|
|
2023 |
|
|
2024 |
|
|||
Discount rate |
|
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% |
|
|
% |
|
|
% |
|||
Salary escalation |
|
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% |
|
|
% |
|
|
% |
|||
The estimates of future salary increases considered in actuarial valuation take account of inflation, total amount of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
The Group regularly assesses these assumptions with the projected long-term plans and prevalent industry standards. The impact of sensitivity due to changes in the significant actuarial assumptions on the defined benefit obligations is given in the table below:
|
|
|
Change in |
|
Impact on provision for gratuity as at March 31, |
|
|||||||||
Particulars |
|
|
assumptions |
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
|
|
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Discount rate |
|
|
+ |
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|
|||
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- |
|
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|
|||
Salary escalation |
|
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+ |
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|
|||
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- |
|
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|
|||
The sensitivity analysis above has been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the year.
F-68
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
The table below shows the expected cash flow profile of the benefits to be paid to the current membership of the plan based on past service of the employees as at the valuation date:
Maturity profile |
|
|
|
|
As at March 31, |
|
|||||||||
|
|
|
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
|
|
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Within next 12 months |
|
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|
|||
From 2nd to 5th year |
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|
|||
From 6th to 9th year |
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|
|||
From 10th year and beyond |
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|
|||
The weighted average duration to the payment of these cash flows is
The Group is exposed to a number of risks in the defined benefit plans. Most significant risks pertaining to defined benefits plans and management estimation of the impact of these risks are as follows:
Defined contribution plan |
|
|
For the year ended March 31, |
|
|||||||||||||
|
|
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2022 |
|
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2023 |
|
|
2024 |
|
|
2024 |
|
||||
|
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
||||
Contribution to provident fund and other fund charged to consolidated statement of profit or loss (inclusive of amount capitalised in different projects) |
|
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|
|||||
F-69
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Group as a lessee
The Group has entered into leases for its offices and leasehold lands. These leases generally have lease terms of
Particulars |
|
For the year ended March 31, |
|
||||||||||||||
|
|
2022 |
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2023 |
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2024 |
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2024 |
|
|||||
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(INR) |
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(INR) |
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(INR) |
|
|
(USD) |
|
||||
Opening balance |
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|
||||
Additions |
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|
||||
Capitalised during the year |
|
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|
||||
Accretion of interest |
|
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|
||||
Disposal of subsidiaries |
|
|
|
- |
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|
|
- |
|
|
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( |
) |
|
|
( |
) |
Payments |
|
|
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( |
) |
|
|
( |
) |
|
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( |
) |
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( |
) |
Closing balance |
|
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|
||||
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|
||||
Current |
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|
||||
Non-current |
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|
||||
Notes:
Group as a lessor
As described in Note 53(a), the Group has entered into Transmission Services Agreements (TSAs) to set-up two transmission projects on Build, Own, Operate and Maintain (BOOM) basis for a
Both the agreements provide for fixed lease rentals that progressively reduce for the first
The rental income recognised by the Group on straight-line basis during the year is INR
F-70
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
On August 23, 2021, all vested and unvested options outstanding for Group Stock Option Plans were replaced by the ‘2021 Stock Entitlement Program’ of the Company (Holding Company Stock Option Plans) with similar terms as per the original options. The employees of the Group were entitled to
The Holding Company Stock Option Plans granted to the employees will be settled in Class A share of the Company. Therefore, the Holding Company Stock Option Plans have been classified as an equity settled share based payment. The replacement of Group Stock Option Plans with Holding Company Stock Option Plans is identified as replacement plan and accounted for as a modification of the Group Stock Option Plans. ESOP expenses [grant date fair value as per Group Stock Option Plans plus incremental fair value (if any) measured at the date of replacement] related to employees of the Group are recognised as employees’ expenses, over vesting period. The modification reduces the fair value of the stock options granted, measured immediately before and after the modification, and therefore the Group has not taken into account that decrease in fair value and had continued to measure the amount recognised for services received based on the grant date fair value of the Group Stock Option Plans granted. Pursuant to replacement of stock options, on the date of replacement,
The fair value of stock options was estimated at the date of replacement using Black-Scholes valuation model, taking into account the terms and conditions upon which the share options were granted. Following are the assumptions used in valuation of Holding Company Stock Option Plan as on the date of replacement:
Particulars |
|
|
Group Stock |
|
Holding Company |
Dividend yield (%) |
|
|
|
||
Expected volatility (%) |
|
|
|
||
Risk–free interest rate (%) |
|
|
|
||
Weighted average expected life of options granted |
|
|
|
||
Weighted average share price |
|
|
INR |
|
USD |
The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.
F-71
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
The relevant terms of the Holding Company Stock Option Plans are as below:
|
Holding Company Stock Option Plans |
||||||||||
Particulars |
2018 Stock Option Plan Modified |
|
2018 Stock Option Plan |
|
2017 Stock Option Plan |
|
2016 Stock Option Plan |
|
2014 Stock Option Plan |
|
2011 Stock Option Plan |
Grant date |
|
|
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|
||||||
Replacement date |
|
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|
||||||
Vesting period |
|
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|
|||||||
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|
|||||
Exercise period |
|||||||||||
Exercise price |
USD |
USD |
USD |
|
USD |
|
USD |
|
USD |
||
Settlement type |
|||||||||||
Expiry date |
|
|
|
|
|
|
|
|
|||
F-72
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Number of options outstanding as at (in million):
March 31, 2024 |
|
|
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|
||||||
March 31, 2023 |
|
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|
|
The details of options outstanding are summarized below:
Particulars |
|
Number of options (in million) |
|
||||
Opening balance as at August 23, 2021 |
|
|
|
|
|
— |
|
Replacement of Group Stock Option Plans at exchange ratio of |
|
|
|
|
|
|
|
Exercised during the period August 24, 2021 to March 31, 2022 |
|
|
|
|
|
|
|
Outstanding as at March 31, 2022 |
|
|
|
|
|
|
|
Exercised / lapsed during the year |
|
|
|
|
|
|
|
Outstanding as at March 31, 2023 |
|
|
|
|
|
|
|
Exercised / lapsed during the year |
|
|
|
|
|
|
|
Outstanding as at March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at March 31, 2023 |
|
|
|
|
|
|
|
Exercisable at March 31, 2024 |
|
|
|
|
|
|
|
- |
The weighted average exercise price of these options outstanding was USD |
|
|
- |
The weighted average exercise price of exercisable options was USD |
|
|
- |
The weighted average exercise price of replacement of Group Stock Option Plans was USD |
|
|
- |
The weighted average exercise price of options excercised during the year was USD |
|
|
- |
The weighted average remaining contractual life of options outstanding as at March 31, 2024 was |
|
|
- |
There were |
F-73
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
The Company introduced the 2021 Incentive Award Plan (Incentive Plan) to grant options to selected employees of the Group. The relevant terms of the Incentive Plan are as below:
According to this scheme, the employees selected by the compensation committee from time to time will be entitled to options as per grant letter issued by the compensation committee, subject to satisfaction of prescribed vesting conditions. The employees will be issued class A equity share of the Company on exercises of this incentive plan.
Particulars |
2021 Incentive Plan |
|||||||
Grant date |
||||||||
Vesting period |
|
|
|
|
Restricted Stock Units (RSUs) |
|
|
|
Exercise period |
||||||||
Exercise price |
USD |
USD |
USD |
USD |
USD |
USD |
USD |
USD |
Settlement type |
||||||||
Expiry date |
||||||||
F-74
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Number of options outstanding as at (in million):
March 31, 2024 |
|
|
|
|
|
|
|
|
RSUs- |
|
|
|
|
|
|
|
||||||||
March 31, 2023 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Particulars |
2021 Incentive Plan |
||||||
Grant date |
|||||||
Replacement date |
|||||||
Vesting period |
|
|
|
Grant 1 |
|
||
Exercise period |
|||||||
Exercise price |
USD |
USD |
USD |
USD |
USD |
USD |
USD |
Settlement type |
|||||||
Expiry date |
|
||||||
Number of options outstanding as at (in million):
March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
March 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The fair value of stock options was estimated using Black-Scholes valuation model, taking into account the terms and conditions upon which the share options were granted. Following are the assumptions used in valuation of 2021 Incentive Award Plan:
F-75
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
|
For the year ended March 31, |
||
2021 Incentive Award Plan |
|
|
2023 |
|
2024 |
Dividend yield (%) |
|
|
|
||
Expected volatility (%) |
|
|
|
||
Risk–free interest rate (%) |
|
|
|
||
Weighted average expected life of options granted |
|
|
|
||
Weighted average share price |
|
|
USD |
|
USD |
The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.
The details of options outstanding are summarized below:
Particulars |
|
Number of options (in million) |
|
||||
Opening balance as at August 23, 2021 |
|
|
|
|
|
— |
|
Granted during the period August 24, 2021 to March 31, 2022 |
|
|
|
|
|
|
|
Outstanding as at March 31, 2022 |
|
|
|
|
|
|
|
Granted during the year |
|
|
|
|
|
|
|
Exercised / lapsed during the year |
|
|
|
|
|
|
|
Outstanding as at March 31, 2023 |
|
|
|
|
|
|
|
Granted during the year |
|
|
|
|
|
|
|
Exercised / lapsed during the year |
|
|
|
|
|
|
|
Outstanding as at March 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at at March 31, 2024 |
|
|
|
|
|
|
|
Exercisable at at March 31, 2023 |
|
|
|
|
|
|
|
- |
The weighted average exercise price of these options outstanding was USD |
|
|
- |
The weighted average exercise price of these options granted was USD |
|
|
- |
The weighted average exercise price of exercisable options was USD |
|
|
- |
The weighted average remaining contractual life of options outstanding as at March 31, 2024 was |
|
|
- |
There were |
The expense recognised for employee services received during the year is shown in the following table:
|
|
|
|
|
|
|
For the year ended March 31, |
|
|||||||||
Particulars |
|
|
|
|
|
|
2022 |
|
|
2023 |
|
|
2024 |
|
|||
Expense arising from equity-settled share-based payment transactions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Expense arising from cash settled share based payments transactions |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Total expense arising from share-based payment transactions* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
* This amount is inclusive of amount capitalised in different projects.
F-76
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Prior to consummation of the Transaction (Refer Note 51(a)), RMG II had issued warrants having rights to purchase its Class A equity shares. As part of the transaction, the Company has issued warrants to these warrants’ holders (refer below for terms of these warrants), which will entitle these warrants holders to purchase Company’s Class A equity shares. These warrants are classified to be derivative instruments and as such, are recorded at fair value through profit or loss account.
The Company will continue to adjust the fair value of the warrant liability at the end of each reporting period for changes in fair value from the prior period until the earlier of the exercise or expiration of the applicable warrants or until such time that the warrants are no longer determined to be derivative instruments.
The details of warrants issued are as follows:
Public warrants:
The Company has
Private warrants:
The Company has
The Group has recognised the following warrant obligations (refer Note 20):
Particulars |
|
|
Public warrants |
|
|
Private warrants |
|
|
Total |
|
|||
Beginning balance at August 23, 2021 |
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation |
|
|
|
|
|
|
|
|
|
|
|||
Change in fair value |
|
|
|
|
|
|
|
|
|
|
|||
Balance at March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation |
|
|
|
|
|
|
|
|
|
|
|||
Converted to Public warrants |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
Change in fair value |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at March 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation |
|
|
|
|
|
|
|
|
|
|
|||
Converted to Public warrants |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
Change in fair value |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at March 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|||
F-77
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
The Group’s subsidiaries along with the proportion of ownership interests and the voting rights held by the immediate holding company are disclosed below. The country of incorporation is also their principal place of business.
|
|
|
|
Country of |
|
As at March 31, |
|
|||||
S.No |
Name of companies |
Immediate holding company |
|
incorporation |
|
2023 |
|
|
2024 |
|
||
1 |
|
|
|
% |
|
|
% |
|||||
2 |
|
|
|
% |
|
|
% |
|||||
3 |
|
|
|
% |
|
|
% |
|||||
4 |
|
|
|
% |
|
|
% |
|||||
5 |
|
|
|
% |
|
|
% |
|||||
6 |
|
|
|
% |
|
|
% |
|||||
7 |
|
|
|
% |
|
|
% |
|||||
8 |
|
|
|
% |
|
|
% |
|||||
9 |
|
|
|
% |
|
|
% |
|||||
10 |
|
|
|
% |
|
|
% |
|||||
11 |
|
|
|
% |
|
|
% |
|||||
12 |
|
|
|
% |
|
|
% |
|||||
13 |
|
|
|
% |
|
|
% |
|||||
14 |
|
|
|
% |
|
|
% |
|||||
15 |
|
|
|
% |
|
|
% |
|||||
16 |
|
|
|
% |
|
|
% |
|||||
17 |
|
|
|
% |
|
|
% |
|||||
18 |
|
|
|
% |
|
|
% |
|||||
19 |
|
|
|
% |
|
|
% |
|||||
20 |
|
|
|
% |
|
|
% |
|||||
21 |
|
|
|
% |
|
|
% |
|||||
22 |
|
|
|
% |
|
|
% |
|||||
23 |
|
|
|
% |
|
|
% |
|||||
24 |
|
|
|
% |
|
|
% |
|||||
25 |
|
|
|
% |
|
|
% |
|||||
26 |
|
|
|
% |
|
|
% |
|||||
27 |
|
|
|
% |
|
|
% |
|||||
28 |
|
|
|
% |
|
|
% |
|||||
29 |
|
|
|
% |
|
|
% |
|||||
30 |
|
|
|
% |
|
|
% |
|||||
31 |
|
|
|
% |
|
|
% |
|||||
32 |
|
|
|
|
% |
|
|
% |
||||
33 |
|
|
|
% |
|
|
% |
|||||
34 |
|
|
|
% |
|
|
% |
|||||
35 |
|
|
|
% |
|
|
% |
|||||
36 |
|
|
|
% |
|
|
% |
|||||
37 |
|
|
|
|
% |
|
|
% |
||||
38 |
|
|
|
% |
|
|
% |
|||||
39 |
|
|
|
% |
|
|
% |
|||||
40 |
|
|
|
% |
|
|
% |
|||||
41 |
|
|
|
|
% |
|
|
% |
||||
42 |
|
|
|
% |
|
|
% |
|||||
43 |
|
|
|
% |
|
|
% |
|||||
44 |
|
|
|
% |
|
|
% |
|||||
45 |
|
|
|
% |
|
|
% |
|||||
46 |
|
|
|
% |
|
|
% |
|||||
47 |
|
|
|
% |
|
|
% |
|||||
48 |
|
|
|
% |
|
|
% |
|||||
49 |
|
|
|
% |
|
|
% |
|||||
50 |
|
|
|
% |
|
|
% |
|||||
F-78
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
|
|
Country of |
|
As at March 31, |
|
|||||
S.No |
Name of companies |
Immediate holding company |
|
incorporation |
|
2023 |
|
|
2024 |
|
||
51 |
|
|
|
% |
|
|
% |
|||||
52 |
|
|
|
% |
|
|
% |
|||||
53 |
|
|
|
% |
|
|
% |
|||||
54 |
|
|
|
% |
|
|
% |
|||||
55 |
|
|
|
% |
|
|
% |
|||||
56 |
|
|
|
% |
|
|
% |
|||||
57 |
|
|
|
% |
|
|
% |
|||||
58 |
|
|
|
% |
|
|
% |
|||||
59 |
|
|
|
% |
|
|
% |
|||||
60 |
|
|
|
% |
|
|
% |
|||||
61 |
|
|
|
% |
|
|
% |
|||||
62 |
|
|
|
% |
|
|
% |
|||||
63 |
|
|
|
% |
|
|
% |
|||||
64 |
|
|
|
% |
|
|
% |
|||||
65 |
|
|
|
% |
|
|
% |
|||||
66 |
|
|
|
|
% |
|
|
% |
||||
67 |
|
|
|
% |
|
|
% |
|||||
68 |
|
|
|
% |
|
|
% |
|||||
69 |
|
|
|
% |
|
|
% |
|||||
70 |
|
|
|
% |
|
|
% |
|||||
71 |
|
|
|
% |
|
|
% |
|||||
72 |
|
|
|
% |
|
|
% |
|||||
73 |
|
|
|
% |
|
|
% |
|||||
74 |
|
|
|
% |
|
|
% |
|||||
75 |
|
|
|
% |
|
|
% |
|||||
76 |
|
|
|
% |
|
|
% |
|||||
77 |
|
|
|
% |
|
|
% |
|||||
78 |
|
|
|
% |
|
|
% |
|||||
79 |
|
|
|
% |
|
|
% |
|||||
80 |
|
|
|
% |
|
|
% |
|||||
81 |
|
|
|
% |
|
|
% |
|||||
82 |
|
|
|
% |
|
|
— |
|
||||
83 |
|
|
|
% |
|
|
— |
|
||||
84 |
|
|
|
% |
|
|
% |
|||||
85 |
|
|
|
% |
|
|
— |
|
||||
86 |
|
|
|
% |
|
|
— |
|
||||
87 |
|
|
|
% |
|
|
— |
|
||||
88 |
|
|
|
% |
|
|
% |
|||||
89 |
|
|
|
|
% |
|
|
% |
||||
90 |
|
|
|
% |
|
|
% |
|||||
91 |
|
|
|
% |
|
|
% |
|||||
92 |
|
|
|
% |
|
|
% |
|||||
93 |
|
|
|
% |
|
|
% |
|||||
94 |
|
|
|
% |
|
|
% |
|||||
95 |
|
|
|
% |
|
|
% |
|||||
96 |
|
|
|
% |
|
|
% |
|||||
97 |
|
|
|
% |
|
|
— |
|
||||
98 |
|
|
|
% |
|
|
% |
|||||
99 |
|
|
|
% |
|
|
% |
|||||
100 |
|
|
|
% |
|
|
% |
|||||
101 |
|
|
|
% |
|
|
% |
|||||
102 |
|
|
|
% |
|
|
% |
|||||
103 |
|
|
|
% |
|
|
% |
|||||
104 |
|
|
|
% |
|
|
% |
|||||
105 |
|
|
|
% |
|
|
% |
|||||
106 |
|
|
|
% |
|
|
% |
|||||
107 |
|
|
|
% |
|
|
% |
|||||
108 |
|
|
|
% |
|
|
% |
|||||
109 |
|
|
|
% |
|
|
% |
|||||
110 |
|
|
|
% |
|
|
% |
|||||
111 |
|
|
|
% |
|
|
% |
|||||
112 |
|
|
|
% |
|
|
% |
|||||
F-79
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
|
|
Country of |
|
As at March 31, |
|
|||||
S.No |
Name of companies |
Immediate holding company |
|
incorporation |
|
2023 |
|
|
2024 |
|
||
113 |
|
|
|
% |
|
|
% |
|||||
114 |
|
|
|
% |
|
|
% |
|||||
115 |
|
|
|
% |
|
|
% |
|||||
116 |
|
|
|
% |
|
|
% |
|||||
117 |
|
|
|
% |
|
|
% |
|||||
118 |
|
|
|
% |
|
|
% |
|||||
119 |
|
|
|
% |
|
|
% |
|||||
120 |
|
|
|
% |
|
|
% |
|||||
121 |
|
|
|
% |
|
|
% |
|||||
122 |
|
|
|
% |
|
|
% |
|||||
123 |
|
|
|
% |
|
|
% |
|||||
124 |
|
|
|
% |
|
|
% |
|||||
125 |
|
|
|
% |
|
|
% |
|||||
126 |
|
|
|
% |
|
|
% |
|||||
127 |
|
|
|
% |
|
|
% |
|||||
128 |
|
|
|
% |
|
|
% |
|||||
129 |
|
|
|
% |
|
|
% |
|||||
130 |
|
|
|
% |
|
|
% |
|||||
131 |
|
|
|
% |
|
|
% |
|||||
132 |
|
|
|
% |
|
|
% |
|||||
133 |
|
|
|
% |
|
|
% |
|||||
134 |
|
|
|
% |
|
|
% |
|||||
135 |
|
|
|
% |
|
|
% |
|||||
136 |
|
|
|
% |
|
|
% |
|||||
137 |
|
|
|
% |
|
|
% |
|||||
138 |
|
|
|
% |
|
|
% |
|||||
139 |
|
|
|
% |
|
|
% |
|||||
140 |
|
|
|
% |
|
|
% |
|||||
141 |
|
|
|
% |
|
|
% |
|||||
142 |
|
|
|
% |
|
|
% |
|||||
143 |
|
|
|
% |
|
|
% |
|||||
144 |
|
|
|
% |
|
|
% |
|||||
145 |
|
|
|
% |
|
|
% |
|||||
146 |
|
|
|
% |
|
|
% |
|||||
147 |
|
|
|
% |
|
|
% |
|||||
148 |
|
|
|
% |
|
|
% |
|||||
149 |
|
|
|
% |
|
|
% |
|||||
150 |
|
|
|
% |
|
|
% |
|||||
151 |
|
|
|
% |
|
|
% |
|||||
152 |
|
|
|
% |
|
|
% |
|||||
153 |
|
|
|
% |
|
|
% |
|||||
154 |
|
|
|
% |
|
|
% |
|||||
155 |
|
|
|
% |
|
|
% |
|||||
156 |
|
|
|
% |
|
|
% |
|||||
157 |
|
|
|
% |
|
|
% |
|||||
158 |
|
|
|
% |
|
|
% |
|||||
159 |
|
|
|
% |
|
|
% |
|||||
160 |
|
|
|
% |
|
|
% |
|||||
161 |
|
|
|
% |
|
|
% |
|||||
162 |
|
|
|
% |
|
|
% |
|||||
163 |
|
|
|
% |
|
|
% |
|||||
164 |
|
|
|
% |
|
|
% |
|||||
165 |
|
|
|
% |
|
|
% |
|||||
166 |
|
|
|
% |
|
|
% |
|||||
167 |
|
|
|
% |
|
|
% |
|||||
168 |
|
|
|
% |
|
|
% |
|||||
169 |
|
|
|
% |
|
|
% |
|||||
170 |
|
|
|
% |
|
|
% |
|||||
171 |
|
|
|
% |
|
|
% |
|||||
172 |
|
|
|
% |
|
|
% |
|||||
173 |
|
|
|
% |
|
|
% |
|||||
174 |
|
|
|
% |
|
|
% |
|||||
175 |
|
|
|
% |
|
|
% |
|||||
176 |
|
|
|
% |
|
|
% |
|||||
177 |
|
|
|
% |
|
|
% |
|||||
F-80
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
|
|
Country of |
|
As at March 31, |
|
|||||
S.No |
Name of companies |
Immediate holding company |
|
incorporation |
|
2023 |
|
|
2024 |
|
||
178 |
|
|
|
% |
|
|
% |
|||||
179 |
|
|
|
% |
|
|
% |
|||||
180 |
|
|
|
% |
|
|
% |
|||||
181 |
|
|
|
% |
|
|
% |
|||||
182 |
|
|
|
% |
|
|
% |
|||||
183 |
|
|
|
% |
|
|
% |
|||||
184 |
|
|
|
% |
|
|
% |
|||||
185 |
|
|
|
% |
|
|
% |
|||||
186 |
|
|
|
% |
|
|
% |
|||||
187 |
|
|
|
% |
|
|
% |
|||||
188 |
|
|
|
% |
|
|
% |
|||||
189 |
|
|
|
% |
|
|
% |
|||||
190 |
|
|
|
% |
|
|
% |
|||||
191 |
|
|
|
% |
|
|
% |
|||||
192 |
|
|
|
% |
|
|
% |
|||||
193 |
|
|
|
% |
|
|
% |
|||||
194 |
|
|
|
% |
|
|
% |
|||||
195 |
|
|
|
% |
|
|
% |
|||||
196 |
|
|
|
% |
|
|
% |
|||||
197 |
|
|
|
% |
|
|
% |
|||||
198 |
|
|
|
% |
|
|
% |
|||||
199 |
|
|
|
% |
|
|
% |
|||||
200 |
|
|
|
% |
|
|
% |
|||||
201 |
|
|
|
% |
|
|
% |
|||||
202 |
|
|
|
% |
|
|
% |
|||||
203 |
|
|
|
% |
|
|
% |
|||||
204 |
|
|
|
% |
|
|
% |
|||||
205 |
|
|
|
% |
|
|
% |
|||||
206 |
|
|
|
% |
|
|
% |
|||||
207 |
|
|
|
% |
|
|
% |
|||||
208 |
|
|
|
% |
|
|
% |
|||||
209 |
|
|
|
% |
|
|
% |
|||||
210 |
|
|
|
% |
|
|
% |
|||||
211 |
|
|
|
% |
|
|
% |
|||||
212 |
|
|
|
% |
|
|
% |
|||||
213 |
|
|
|
% |
|
|
% |
|||||
214 |
|
|
|
% |
|
|
% |
|||||
215 |
|
|
|
% |
|
|
% |
|||||
216 |
|
|
|
% |
|
|
% |
|||||
217 |
|
|
|
% |
|
|
% |
|||||
218 |
|
|
|
% |
|
|
% |
|||||
219 |
|
|
|
% |
|
|
% |
|||||
220 |
|
|
|
% |
|
|
% |
|||||
221 |
|
|
|
% |
|
|
% |
|||||
222 |
|
|
|
% |
|
|
% |
|||||
223 |
|
|
|
% |
|
|
% |
|||||
224 |
|
|
|
% |
|
|
% |
|||||
225 |
|
|
|
% |
|
|
% |
|||||
226 |
|
|
|
% |
|
|
% |
|||||
227 |
|
|
|
% |
|
|
% |
|||||
228 |
|
|
|
% |
|
|
% |
|||||
229 |
|
|
|
% |
|
|
% |
|||||
230 |
|
|
|
% |
|
|
% |
|||||
231 |
|
|
|
% |
|
|
% |
|||||
232 |
|
|
|
% |
|
|
% |
|||||
233 |
|
|
|
% |
|
|
% |
|||||
234 |
|
|
|
% |
|
|
% |
|||||
235 |
|
|
|
% |
|
|
% |
|||||
236 |
|
|
|
% |
|
|
% |
|||||
237 |
|
|
|
% |
|
|
% |
|||||
238 |
|
|
|
% |
|
|
% |
|||||
239 |
|
|
- |
|
|
|
% |
|||||
240 |
|
|
- |
|
|
|
% |
|||||
F-81
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
|
|
Country of |
|
As at March 31, |
|
|||
S.No |
Name of companies |
Immediate holding company |
|
incorporation |
|
2023 |
|
2024 |
|
|
241 |
|
|
- |
|
|
% |
||||
All Group companies listed above are engaged in activities relating to generation of power through non-conventional and renewable energy sources except for the below mentioned
^ These companies are also engaged in providing EPC services apart from generation of power through non-conventional and renewable energy sources.
$ These companies are engaged in providing services for operation and maintenance.
* These companies are engaged in construction / maintenance of transmission lines.
% This Company is engaged in module maufacturing activity.
^^ RPL is deemed to be the accounting acquirer in the transaction (refer Note 2.3). The remaining
|
|
|
|
Country of |
|
As at March 31, |
|
|||||
S.No |
Name of companies |
Investor company |
|
incorporation |
|
2023 |
|
|
2024 |
|
||
1 |
|
|
|
|
% |
|
|
% |
||||
2 |
|
|
|
|
|
|
% |
|||||
3 |
|
|
|
% |
|
|
% |
|||||
4 |
|
|
|
— |
|
|
|
% |
||||
* Also refer Note 50.
Details of subsidiaries that have material non-controlling interests
The non-controlling interests (excluding those having put option to be settled in cash) that are material to the Group primarily relates to RPL wherein Canada Pension Plan Investment Board holds an economic interest by virtue of its shareholding of
There are certain other subsidiaries in the Group (refer Note (a) above) with non-controlling interests but these are not considered individually material to the Group and hence no disclosures have been made related to these subsidiaries.
The table below shows summarised consolidated financial information of RPL:
F-82
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
As at March 31, |
|
|||||||||||
|
|
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
|
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Non-current assets |
|
|
|
|
|
|
|
|
|
|||||
Current assets |
|
|
|
|
|
|
|
|
|
|||||
Non-current liabilities |
|
|
|
|
|
|
|
|
|
|||||
Current liabilities |
|
|
|
|
|
|
|
|
|
|||||
Non-controlling interests (not considered individually material) |
|
|
|
|
|
|
|
|
|
|||||
Equity attributable to equity holders of the parent |
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||
Attributable to: |
|
|
|
|
|
|
|
|
|
|||||
Equity holders of the parent |
|
|
|
|
|
|
|
|
|
|||||
Non-controlling interests |
|
|
|
|
|
|
|
|
|
|||||
|
|
For the year ended March 31, |
|
|||||||||||
|
|
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
|
|
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|||
Revenue |
|
|
|
|
|
|
|
|
|
|||||
Other income |
|
|
|
|
|
|
|
|
|
|||||
Expenses |
|
|
|
|
|
|
|
|
|
|||||
Profit / (loss) for the year |
|
|
( |
) |
|
|
|
|
|
|
||||
Other comprehensive income / (loss) for the year, net of tax |
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
Total comprehensive income / (loss) for the year, net of tax |
|
|
( |
) |
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||
Profit / (loss) for the year attributable to: |
|
|
|
|
|
|
|
|
|
|||||
Non-controlling interests (pertains to subsidiaries not considered individually material to the Group) |
|
|
|
|
|
|
|
|
|
|||||
Equity holders of the parent |
|
|
( |
) |
|
|
|
|
|
|
||||
|
|
|
( |
) |
|
|
|
|
|
|
||||
Attributable to: |
|
|
|
|
|
|
|
|
|
|||||
Equity holders of the parent |
|
|
( |
) |
|
|
|
|
|
|
||||
Non-controlling interests |
|
|
( |
) |
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||
Total comprehensive income / (loss) attributable to: |
|
|
|
|
|
|
|
|
|
|||||
Non-controlling interests (pertains to subsidiaries not considered individually material to the Group) |
|
|
|
|
|
|
|
|
|
|||||
Equity holders of the parent |
|
|
( |
) |
|
|
|
|
|
|
||||
|
|
|
( |
) |
|
|
|
|
|
|
||||
Attributable to: |
|
|
|
|
|
|
|
|
|
|||||
Equity holders of the parent |
|
|
( |
) |
|
|
|
|
|
|
||||
Non-controlling interests (including liability for put options with non-controlling interests) |
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
For the year ended March 31, |
|
|||||||||
|
|
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
|||
Net cash generated from operating activities |
|
|
|
|
|
|
|
|
|
|||||
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
||
Net cash generated from financing activities |
|
|
|
|
|
|
|
|
|
|||||
Net increase / (decrease) in cash and cash equivalents |
|
|
|
|
|
( |
) |
|
|
( |
) |
|||
F-83
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Names of related parties and related party relationship
The names of related parties with whom transactions have taken place during the year and description of relationship as identified by the management are described below. There is no entity that has control over the Company.
The transactions with related parties are made at arm’s length prices. Outstanding balances at the year-end are unsecured and interest free (other than interest carrying loan balances) and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the years ended March 31, 2024, 2023 and 2022, the Group has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken on a forward-looking basis at each reporting period end through examining the historical information and financial position of the related party that is adjusted to reflect current conditions of market in which the related party operates.
|
|
For the year ended March 31, |
|
|||||||||||||
Remuneration to Key Management Personnel |
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
||||
Short-term benefits |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Share based payments |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Post-employment benefits |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Payment to non-executive directors (includes Directors sitting fee and commission) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
During the year ended March 31, 2024, the Company has granted
Key Management Personnel (KMP) are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including any director (whether executive or otherwise).
|
|
For the year ended March 31, |
|
|||||||||||||
Other related party |
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
||||
Remuneration to relatives of KMP# |
|
|
|
|
|
|
|
|
|
|
|
|
||||
F-84
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
# relative of the Chairman and Chief Executive Officer of the Company
|
|
3E NV |
|
|||||||||||||
|
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
||||
Transactions during the year end March 31, |
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
||||
Loans given |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Support services rendered |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Interest income on loan given to related parties |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
|
|
3E Renewable Energy Software and Services Private Limited |
|
|||||||||||||
Transactions during the year end March 31, |
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
||||
Operation and maintenance expenses |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
|
|
Fluence India ReNew JV Private Limited |
|
|||||||||||||
Transactions during the year end March 31, |
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
||||
Purchase of capital goods |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
|
|
3E NV |
|
|||||||||||||
Balance as at March 31, |
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
||||
Loans receivable |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Trade receivable |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Interest accrued on loans given |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
|
|
3E Renewable Energy Software and Services Private Limited |
|
|||||||||||||
Balance as at March 31, |
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
||||
Trade payables |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
|
|
Fluence India ReNew JV Private Limited |
|
|||||||||||||
Balance as at March 31, |
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
||||
Capital creditors |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
F-85
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
|
|
GS Wyvern Holdings Limited |
|
|||||||||||||
Transactions during the year end March 31, |
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
||||
Compulsorily convertible preference shares converted to equity |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
ReNew Foundation |
|
|||||||||||||
Transactions during the year end March 31, |
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
||||
Contribution for activities related to corporate social responsibility |
|
|
|
|
|
|
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|
|
|
|
|
||||
|
|
KMP and their relatives |
|
|||||||||||||
Transactions during the year end March 31, |
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
||||
Put options exercised during the year (refer Note 20) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
|
|
KMP and their relatives |
|
|||||||||||||
Transactions during the year end March 31, |
|
2022 |
|
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2023 |
|
|
2024 |
|
|
2024 |
|
||||
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
||||
Retention bonus given |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
During January 2021, RPL had provided financial guarantee on the loans obtained by the shareholder, Wisemore Advisory Private Limited amounting to INR
During the year ended March 31, 2022, the Company had granted an option to the CEO, to purchase his entire shareholding in RPL, which was held directly or indirectly by him. As per the terms of option, the Company is required to purchase for cash the said shares in RPL at a
F-86
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
The CEO of the Company takes decisions in respect of allocation of resources and assesses the performance basis the reports / information provided by functional heads and is thus considered to be the Chief Operating Decision Maker (CODM).
The Group discloses segment information in a manner consistent with internal reporting to the CEO. The Group has identified segments based on type of business operations. The reportable segments of Group under IFRS 8 - Operating segments, are (a) Wind, Solar and Hydro Power which predominantly relate to generation and sale of electricity and construction activities and (b) transmission line projects. During the year ended March 31, 2022 and 2023, the Group had started operations for Hydro Power and Transmission line projects, respectively and these operations have been disclosed as separate segments. The non-reportable segments relate to the other services being rendered by the Group.
The Group entities do not operate in more than one geographical segment. The Group discloses segment information Earnings before interest, tax, depreciation and amortisation (Segment EBITDA), where Segment EBITDA is measured on the basis of profit / (loss) from continuing operations, which is used by the CODM. The Group measures Segment EBITDA, a non-IFRS measure, as the revenue generated from the respective segment plus other income pertaining to the respective segment and is reduced by Raw materials and consumables used, employee benefit and other expenses, excluding depreciation and amortisation charges and finance costs, directly related to the individual segments.
F-87
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
No operating segment has been aggregated to form the above reportable operating segments. Further, total assets and liabilities balance for each reportable segment is not reviewed by or provided to the CODM.
|
For the year ended March 31, 2022 |
|
For the year ended March 31, 2023 |
|
For the year ended March 31, 2024 |
|
|||||||||||||||||||||||||||||||||||||||
Particulars |
Wind |
|
Solar |
|
Hydro |
|
Total |
|
Wind |
|
Solar |
|
Hydro |
|
Transmission |
|
Total |
|
Wind |
|
Solar |
|
Hydro |
|
Transmission |
|
Total |
|
Total |
|
|||||||||||||||
|
(INR) |
|
(INR) |
|
(INR) |
|
(INR) |
|
(INR) |
|
(INR) |
|
(INR) |
|
(INR) |
|
(INR) |
|
(INR) |
|
(INR) |
|
(INR) |
|
(INR) |
|
(INR) |
|
(USD) |
|
|||||||||||||||
Revenue(1) |
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|
|||||||||||||||
Revenue |
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|||||||||||||||
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|
|||||||||||||||
Other income |
|
|
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|
|
|
|
|
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|
|
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|
|
|||||||||||||||
Total income (a) |
|
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|||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Less: Raw materials and consumables used, employee benefit and other expenses(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|||||||||||||||
Total expenses (b) |
|
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|||||||||||||||
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|
|
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|
|
|||||||||||||||
Segment EBITDA (a) - (b) |
|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
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|||||||||||||||
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|
|
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|
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|
|
|
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|
|
|
|||||||||||||||
Add: Revenue from non-reportable segments(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Less: Employee benefit and other expenses for non-reportable segments |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
( |
) |
|
( |
) |
|||||||||||
Add: Un-allocable other income (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Less: Un-allocable employee benefit and other expenses (4) |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
( |
) |
|
( |
) |
|||||||||||
Less: Depreciation and amortisation expense |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
( |
) |
|
( |
) |
|||||||||||
Add / (less): Change in fair value of warrants |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Less: Listing and related expenses |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|||||||||||
Less: Finance costs and fair value change in derivative instruments(2) |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
( |
) |
|
( |
) |
|||||||||||
Profit / (loss) before tax |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Less: Share of (loss) / profit of jointly controlled entities |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
( |
) |
||||||||||||
Less: Income tax expense |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
( |
) |
|
( |
) |
|||||||||||
Profit / (loss) for the year |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
F-88
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
The revenue from
Notes:
F-89
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Set out below, is a comparison by class of the carrying amounts and fair value of the financial instruments of the Group:
|
|
|
As at March 31, 2023 |
|
|
As at March 31, 2024 |
|
|
As at March 31, 2024 |
|
|||||||||||||||
|
|
|
Carrying value |
|
|
Fair value |
|
|
Carrying value |
|
|
Fair value |
|
|
Carrying value |
|
|
Fair value |
|
||||||
|
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|
(USD) |
|
||||||
Financial assets |
|
|
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|
||||||
|
|
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|
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|
||||||
Measured at amortised cost |
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
||||||
Security deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Bank deposits with remaining maturity for more than twelve months |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Trade receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Bank balances other than cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Advances recoverable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest accrued on fixed deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest accrued on loans to related parties |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Government grants receivable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Deferred consideration receivable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loans to related parties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other current financial assets |
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
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|
|
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|
||||||
Measured at fair value through profit or loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Investments |
|
|
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|
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|
||||||
|
|
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|
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|
|
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|
||||||
Financial assets designated as a hedge instrument at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative instruments - hedge instruments |
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
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|
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|
||||||
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Measured at amortised cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-bearing loans and borrowings - long term |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest accrued |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Capital creditors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Purchase consideration payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Liability for operation and maintenance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-bearing loans and borrowings - short term |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Trade payables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Financial liabilities at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Liability for put options with non-controlling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Financial liabilities at fair value through profit or loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivative instruments - share warrants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Financial liabilities designated as a hedge instrument at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Derivative instruments - hedge instruments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
The management of the Group assessed that cash and cash equivalents, trade receivables (current), bank balances other than cash and cash equivalents, short term loans, trade payables, short term interest-bearing loans and borrowings, other current financial liabilities and other current financial assets approximate their carrying amounts largely due to the short-term maturities of these instruments.
F-90
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
For all other instruments, following methods and assumptions were used to estimate the fair values:
The Group categorises assets and liabilities measured at fair value into one of three levels depending on the ability to observe inputs employed in their measurement which are described as follows:
For assets and liabilities that are recognised at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. There were no changes in the Group’s valuation processes, valuation techniques, and types of inputs used in the fair value measurements during the year.
There were
F-91
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
'The following table provides the fair value measurement hierarchy of the financial assets and liabilities of the Group:
|
|
|
As at March 31, 2023 |
|
|
As at March 31, 2024 |
|
|
As at March 31, 2024 |
|
|||||||||||||||
Particulars |
Level |
|
Carrying value |
|
|
Fair value |
|
|
Carrying value |
|
|
Fair value |
|
|
Carrying value |
|
|
Fair value |
|
||||||
|
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(INR) |
|
|
(USD) |
|
|
(USD) |
|
||||||
Financial assets designated as a hedge instrument at fair value |
|
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Derivative instruments - hedge instruments |
Level 2 |
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Financial assets at fair value through profit or loss |
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Investments |
Level 2 |
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Financial liabilities at fair value |
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Liability for put options with non-controlling interests |
Level 2 |
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Financial liabilities designated as a hedge instrument at fair value |
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Derivative instruments - hedge instruments |
Level 2 |
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Financial liabilities at fair value through profit or loss |
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Derivative instruments |
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- public share warrants |
Level 1 |
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- private share warrants |
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F-92
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Set out below are the fair value hierarchy, valuation techniques and inputs used as at March 31, 2024 and March 31, 2023:
Particulars |
Level |
|
Valuation technique |
|
Inputs used |
||||||||
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Financial assets designated as a hedge instrument at fair value |
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Derivative instruments - hedge instruments |
Level 2 |
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Financial assets at fair value |
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Investments |
Level 2 |
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Financial liabilities at fair value |
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Liability for put options with non-controlling interests |
Level 2 |
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Financial liabilities at fair value through profit or loss |
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Derivative instruments |
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- public share warrants |
Level 1 |
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- private share warrants |
Level 2 |
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Financial liabilities designated as a hedge instrument at fair value |
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Derivative instruments - hedge instruments |
Level 2 |
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|||||||||||
The financial liabilities comprise loans and borrowings, derivative liabilities, trade payable and other financial liabilities.
The main purpose of these financial liabilities is to finance the Group's operations. The Group's principal financial assets include loans, derivative assets, trade receivables, cash and cash equivalents and other financial assets. 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 various sub committees that advises on financial risks and the appropriate financial risk governance framework for the Group. These committees provide assurance to the Group's senior management that the Group's financial risk activities are governed by appropriate policies and procedure and that financial risks are identified, measured and managed in accordance with the Group's policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:
Market risk
Market risk is the risk that the Group's assets and liabilities will be exposed to due to a change in market prices that determine the valuation of these financial instruments. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments and derivative financial instruments.
The sensitivity analysis in the following sections relate to the position as at March 31, 2024 and 2023. The sensitivity analyses 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 as at March 31, 2024 and 2023.
F-93
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group is exposed to interest rate risk primarily from the external borrowings that are used to finance their operations. In case of external commercial borrowings (ECB) and buyers credit the Group believes that the exposure of Group to changes in market interest rates is insignificant as the respective companies manage the risk by hedging the changes in the market interest rates through cross currency interest rate swaps. The Group also monitors the changes in interest rates and actively refinances its debt obligations to achieve an optimal interest rate exposure.
Interest rate sensitivity
'
|
|
For the year ended March 31, |
||||||||||
|
|
2022 |
|
2023 |
|
2024 |
||||||
|
|
Increase / decrease in basis points |
|
Effect on profit/ (loss) before tax |
|
Increase / decrease in basis points |
|
Effect on profit/ (loss) before tax |
|
Increase / decrease in basis points |
|
Effect on profit/ (loss) before tax |
INR |
|
+ / (-) |
|
(-) / + |
|
+ / (-) |
|
(-) / + |
|
+ / (-) |
|
(-) / + |
The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment. Though there is exposure on account of Interest rate movement as shown above but the Group minimises the foreign currency (US dollar) interest rate exposure through derivatives and INR interest rate exposure through re-financing.
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 currency risk arising from imports of goods in US dollars. The Group hedges its exposure to fluctuations on the translation into INR of its buyer's / supplier's credit by using foreign currency swaps and forward contracts. The Group has followed a conservative approach for hedging the foreign currency risk so as to not use complex forex derivatives and foreign currency loan. The Group also monitors that the hedges do not exceed the underlying foreign currency exposure. The Group does not undertake any speculative transaction.
Credit risk
Credit risk is the risk that the power procurer will not meet their obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from their operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions and other financial instruments. The credit risk exposure is insignificant given the fact that substantially whole of the revenues are from state utilities / government entities. The Group only deals with parties which has good credit rating / worthiness given by external rating agencies or based on the Group's internal assessment.
Further the group sought to reduce counterparty credit risk under long-term contracts in part by entering into power sales contracts with utilities or other customers of strong credit quality and we monitor their credit quality on an ongoing basis.
The maximum credit exposure to credit risk for the components of the statement of financial position at March 31, 2024 and 2023 is the carrying amount of all the financial assets except for financial guarantees. The Group’s maximum exposure relating to financial guarantees is disclosed in Note 47(ii) and the liquidity table below.
F-94
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Customer credit risk is managed basis established policies of Group, procedures and controls relating to customer credit risk management. Outstanding customer receivables are regularly monitored. The Group does not hold collateral as security. The group has majorly state utilities / government entities as its customers with high credit worthiness and therefore the group does not see any significant risk related to credit.
The credit quality of the customers is evaluated based on their credit ratings and other publicly available data.
The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment and impairment analysis is performed at each reporting date to measure expected credit losses. The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions.
Set out below is the information about the credit risk exposure on the Group’s trade receivables using a provision matrix:
As at March 31, 2024 |
|
Trade receivables (days past due) |
|
|||||||||||||||||
|
|
0 - 6 months* |
|
|
6 -12 months |
|
|
12 -18 months |
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|
> 18 months |
|
|
Total |
|
|||||
Gross carrying amount |
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|||||
Expected credit loss |
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|||||
As at March 31, 2023 |
|
Trade receivables (days past due) |
|
|||||||||||||||||
|
|
0 - 6 months* |
|
|
6 -12 months |
|
|
12 -18 months |
|
|
> 18 months |
|
|
Total |
|
|||||
Gross carrying amount |
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|||||
Expected credit loss |
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- |
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|
||||
* included trade receivables which are not yet due.
Credit risk from balances with banks is managed by Group's treasury department. Investments, in the form of fixed deposits, loans and other investments, of surplus funds are made only with banks and financial institutions within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Group's treasury department in line with the approved investment policy. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty's potential failure to make payments.
Credit risk from other financial assets including loans is managed basis established policies of Group, procedures and controls relating to customer credit risk management. Outstanding receivables are regularly monitored. The Group does not hold collateral as security.
Share warrants
The Company has issued warrants to these warrants’ holders (refer Note 39), which entitle these warrants holders to purchase Company’s Class A equity shares. These warrants are classified to be derivative instruments and are recorded at fair value through profit or loss account basis market value of warrants. The Group is exposed to price risk considering the liability in the hands of the Company is impacted through the market price of share warrants.
F-95
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
The Group has determined that an increase / (decrease) of
Put options
Non-controlling shareholders of RPL have an option to offload their shareholding to the Company in accordance with the terms mentioned in the BCA at fair value of shares on the date of Put for cash. Put option liability with non-controlling interest accounted for at fair value basis volume weight average price of the Company shares over 30 trading days. The changes to the put option liability are accounted for in equity. The Group is exposed to price risk considering the liability in the hands of the Company is impacted through the market price of shares of the Company.
The Group has determined that an increase / (decrease) of
Liquidity risk
Liquidity risk is the risk that the Group will encounter in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The approach of the Group to manage liquidity is to ensure, as far as possible, that these will have sufficient liquidity to meet their respective liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risk damage to their reputation. The Group assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Group has access to a sufficient variety of sources of funding and debt maturing within 12 months can be rolled over with existing lenders.
The Group relies mainly on long-term debt obligations to fund their construction activities. To the extent available at acceptable terms, the Group utilised non-recourse debt to fund a significant portion of the capital expenditures and investments required to construct and acquire our wind and solar power plants and related assets. The Group's non-recourse financing is designed to limit default risk and is a combination of fixed and variable interest rate instruments. In addition, the debt is typically denominated in the currency that matches the currency of the revenue expected to be generated from the benefiting project, thereby reducing currency risk. The majority of non-recourse debt is funded by banks and financial institutions, with debt capacity supplemented by unsecured loan from related party.
F-96
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
The table below summarises the maturity profile of financial liabilities of the Group based on contractual undiscounted payments:
As at March 31, 2024 |
|
On demand |
|
|
Less than |
|
|
3 to 12 |
|
|
1 to 5 years |
|
|
> 5 years |
|
|
Total |
|
||||||
Borrowings |
|
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|
||||||
Non convertible debentures (secured)* |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
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|
|||
Compulsorily convertible debentures* |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Optionally convertible debentures* |
|
|
— |
|
|
|
— |
|
|
|
— |
|
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|
|
|
|
|
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|
|||
Term loan from banks* |
|
|
— |
|
|
|
— |
|
|
|
— |
|
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|
|||
Loans from financial institutions* |
|
|
— |
|
|
|
— |
|
|
|
— |
|
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|
|||
Senior secured notes* |
|
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— |
|
|
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— |
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|
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— |
|
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- |
|
|
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|
||
Short term interest-bearing loans and borrowings |
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||||||
Acceptances (secured) |
|
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— |
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|
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— |
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— |
|
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|
|||
Term loan from banks and financial institutions (secured) |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
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|
||
Working capital term loan |
|
|
— |
|
|
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|
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|
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— |
|
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— |
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|
|||
Buyer's / Supplier's credit |
|
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— |
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|
|
— |
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— |
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|
|||
Other financial liabilities |
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|
||||||
Lease liabilities |
|
|
— |
|
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|
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|
|
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|
|
|
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|
|||||
Current maturities of long term interest-bearing loans and borrowings* |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
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|
||||
Interest accrued |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
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|
|||
Capital creditors |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
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|
||
Purchase consideration payable |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
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|
||
Trade payables |
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
||||||
Trade payables |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
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|
||
As at March 31, 2023 |
|
On demand |
|
|
Less than |
|
|
3 to 12 |
|
|
1 to 5 years |
|
|
> 5 years |
|
|
Total |
|
||||||
Non convertible debentures (secured)* |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Compulsorily convertible debentures* |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Term loan from banks* |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Loans from financial institutions* |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Senior secured notes* |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Short term interest-bearing loans and borrowings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Acceptances (secured) |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Term loan from banks and financial institutions (secured) |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Working capital term loan (secured) |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
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|
|||
Other financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
||||||
Lease liabilities |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Current maturities of long term interest-bearing loans and borrowings* |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Interest accrued |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Capital creditors |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Purchase consideration payable |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Trade payables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Trade payables |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
* Including future interest payments.
F-97
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
For the purpose of the capital management, capital includes issued equity capital, compulsorily convertible debentures, compulsorily convertible preference shares, optionally convertible debentures, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Group's management is to maximise 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.
To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Group monitor capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group includes within net debt, interest bearing loans and borrowings and other payables, less cash and short-term deposits. The Group systematically evaluates opportunities for managing its assets including that of buying new assets, partially or entirely sell existing assets and potential new joint ventures. Crystallisation of any such opportunity shall help the Group in improving the overall portfolio of assets, cash flow management and shareholder returns.
The policy of the Group is to keep the gearing ratio of the power project to
There are
No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2024, 2023 and 2022.
Description |
As at March 31, |
|
||||||||||
|
2023 |
|
2024 |
|
2024 |
|
||||||
|
|
|
|
(INR) |
|
(INR) |
|
(USD) |
|
|||
Contingent liabilities on account of liquidated damages for delay in project commissioning for which no material liability is expected. Further, the management believes that any amount of liquidated damages to be levied by customer shall be entirely reimbursable from capital vendors of respective projects. |
|
|
|
|
|
|
||||||
Contingent liabilities on account of transmission penalties for inability to execute or delays in execution of projects |
|
|
|
|
|
|
||||||
VAT, GST, service tax, entry tax matters# |
|
|
|
— |
|
|
— |
|
||||
Income tax disallowances / demands under litigation |
|
|
|
|
|
|
||||||
Others^ |
|
|
|
|
|
|
||||||
# The Group is contesting demands of direct and indirect taxes and the management, including its tax advisors, believe that its positions will likely be upheld in the appellate process.
^includes disputes related to land, water tax on Electricity Generation Act, 2012 and Forecasting, Scheduling, Deviation Settlement Mechanism , third party claims and related matters of wind and solar generating stations Regulations, 2018 (DSM Regulations, 2018) etc.
F-98
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Estimated amount of contracts remaining to be executed on capital account and not provided for in the financial statements
As at March 31, 2024, the Group has capital commitment (net of advances) pertaining to commissioning of wind and solar energy projects of INR
Guarantees
The Group has obtained guarantees from financial institutions as a part of the bidding process for establishing renewable projects. Further, the Group issues irrevocable performance bank guarantees in relation to its obligation towards construction and transmission infrastructure of renewable power projects plants as required by the PPA and such outstanding guarantees are INR
The terms of the PPAs provide for the delivery of a minimum quantum of electricity at fixed prices.
F-99
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Certain subsidiary companies (AP entities) have entered into long-term PPAs having a cumulative capacity of
1. In terms of the Generation Based Incentive (GBI) scheme of the Ministry of Renewable Energy (MNRE), the AP entities accrue income based on units of power supplied under the aforementioned PPAs. Andhra Pradesh Electricity Regulatory Commission (APERC) vide its order in July 2018 allowed APDISCOMS to interpret the Andhra Pradesh Electricity Regulatory Commission (Terms and Conditions for Tariff Determination for Wind Power Projects) Regulations, 2015 (Regulations) in a manner to treat GBI as a pass through in the tariff.
The AP entities filed writ petition before the Andhra Pradesh High Court (AP High Court) challenging the vires of the regulation and the order by APERC and were granted an interim stay order in August 2018 thereby directing APDISCOM not to deduct GBI from future billings from date of the order. As at March 31, 2024, the cumulative amount recoverable from the APDISCOM included in trade receivables amounts to INR
The management, basis its assessment and the practice followed consistently in other states, believes that the GBI benefit is over and above the applicable tariffs and the APERC does not have jurisdiction to interfere with the intent of GBI scheme. Therefore the outstanding amount is recoverable and continues to be recognised in the consolidated financial statements.
2. The Government of Andhra Pradesh (GoAP) issued an order (GO) dated July 1, 2019 constituting a High-Level Negotiation Committee (HLNC) for review and negotiation of tariff for wind and solar energy projects in the state of Andhra Pradesh. Pursuant to the GO, APDISCOM issued letters dated July 11, 2019 and July 12, 2019 to the AP entities, requesting for revision of tariffs as agreed in the PPAs. The AP entities filed a writ petition on July 23, 2019 before the AP High Court challenging the GO and the said letters issued by APDISCOM for renegotiation of tariffs. The AP High Court issued its order dated September 24, 2019 ruled as follows:
i. Writ petition is allowed, and both GO and the subsequent letters are set aside.
ii. Further, APDISCOM were instructed to honor pending and future bills and pay the same at the interim rate of INR
iii. APERC to dispose-off the case within a time frame of six months.
The AP Entities filed a Writ Appeal before the division bench of the AP High Court challenging the jurisdiction of APERC in entertaining O.P. No. 17 of 2018. Parallelly, the AP Entities filed another Writ Appeal before the division bench of the AP High Court challenging AP High Court’s direction to the APDISCOM to pay tariff at interim rate till determination of OP No. 17 of 2018 by APERC.
Thereafter, by its final order dated March 15, 2022, the AP High Court disposed off common batch matters and allowed the appeals by AP entities and set aside the Order dated September 24, 2019, holding that APERC does not have the jurisdiction to entertain Original Petition (O.P.) No. 17 of 2018 and directing APDISCOM to pay all outstanding amounts to AP entities within a period of 6 weeks.
APDISCOM filed petitions before the Supreme Court seeking special leave to appeal against the AP High Court's order dated March 15, 2022. The Supreme Court by its Order dated December 14, 2022, has issued notice to the respondents in one of the petitions viz. jurisdiction of the APERC to entertain OP 17 of 2019. The APDISCOM petition before Supreme Court is pending for final adjudication. As at March 31, 2024, the cumulative amount recoverable from the APDISCOM in relation to this matter included in trade receivables amounts to INR
In view of the favourable order by the AP High Court and basis the internal anaylsis, management believes that it has strong merits in the case and no additional adjustment is required in the consolidated financial statements.
F-100
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
ReNew Wind Energy (Karnataka) Private Limited and ReNew Wind Energy (AP) Private Limited, subsidiaries of the Group, set up projects to supply electricity for captive use by their shareholders. The KERC, through a circular dated September 18, 2018, directed the Karnataka Electricity Supply Companies ('KESCOMs') and Karnataka Power Transmission Corporation Limited to monitor the status of group captive generators/ consumers to ensure that they have acquired the status of group captive generators/ consumers and to verify the compliance of their consumption of electricity with the Electricity Rules, 2005, and to levy cross subsidy surcharge ('CSS') and electricity tax differential on captive users drawing power from captive generating plants in case of any violation. Pursuant to and basis the September 18, 2018 circular, Electricity Supply Companies ('ESCOMs') issued demand letters to the captive users of the Company’s subsidiaries specified above, seeking recovery of cross subsidy surcharge and differential of applicable electricity tax due to failure of compliance with the Electricity Rules, 2005. The Group filed writ petitions challenging the circular and the demand letters and against the ESCOMs (“Karnataka Writs”) and separate petitions before the KERC for quashing the demand letters (“Karnataka Petitions”).
The Karnataka High Court, in its interim orders dated July 18, 2019, and September 18, 2020, ordered the KESCOMs to refrain from taking any precipitative action against captive users. Thereafter, the KERC disposed of the Karnataka petitions based on the principles laid down by the Appellate Tribunal For Electricity ('APTEL') in its judgment dated June 7, 2021, in the case of Tamil Nadu Power Producers Association vs. Tamil Nadu Electricity Regulatory Commission and others. KERC declared that the plant maintained its compliance as a captive generating plant for FY 2017-18, except for FY 2013-14 and FY 2015-16.
On October 9, 2023, the Supreme Court notified its judgment in Civil Appeal Nos. 8527-8529 of 2009 in the matter of M/s Dakshin Gujarat Vij Company Limited, upholding the test of proportionality on a Special Purpose Vehicle (SPV), which was otherwise exempted, and reversing the judgment in the case of Tamil Nadu Power Producers Association vs. Tamil Nadu Electricity Regulatory Commission and others.
In December 2023, the KESCOMs challenged the KERC order before the APTEL, which is pending final adjudication.
The Group has also filed a Writ Petition before Karnataka High Court challenging the levy of CSS, since the levy was intended to be a temporary provision and were supposed to be reduced progressively in subsequent years. The Group believes that since there was no levy of cross-subsidy surcharge since FY 2009-2012, it cannot be re-introduced as per the intent of the Act.
The pleadings are completed and the matter is listed for final arguments. Further, the responsibility of drawing power in proportion to the shareholding was squarely on the consumers and hence as per the PPAs, it cannot be recovered from the Group. Neither a demand has been received till date nor does the Group expect any material demand in future.
Basis internal evaluation, management believes that there are merits in its position and that the demand raised by distribution companies would be utimately rescinded and hence no adjustment has been made in the consolidated financial statements in this regard.
F-101
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Derivatives designated as hedging instruments
The Group uses certain types of derivative financial instruments (viz. forwards contracts, swaps, call options and call spreads) to manage / mitigate its exposure to foreign exchange and interest risk. Further, the Group designates such derivative financial instruments (or its components) as hedging instruments for hedging the exchange rate fluctuation and interest risk attributable to either a recognised item or a highly probable forecast transaction (‘Cash flow hedge’).
The effective portion of changes in the fair value of derivative financial instruments (or its components) that are designated and qualify as cash flow hedges, are recognised in the other comprehensive income and held in hedge reserve - a component of equity. Any gains / (losses) relating to the ineffective portion, are recognised immediately in the statement of profit or loss within finance income / finance costs. The amounts accumulated in equity for highly probable forecast transaction are added to carrying value of non financial asset or non financial liability as basis adjustment, other amounts accumulated in equity are re-classified to the statement of profit or loss in the years when the hedged item affects profit or loss.
At any point of time, when a forecast transaction is no longer expected to occur, the cumulative gains / (losses) that were reported in equity is immediately transferred to the statement of profit or loss.
Cash flow hedges
Hedge has been taken against exposure to foreign currency risk and variable interest outflow on External commercial borrowings, Foreign Letter of Credits and highly probable forecast transactions. Terms of the derivative contracts and their respective impact on OCI and statement of profit or loss is as below:-
Loan
Pay fixed INR and receive USD and pay fixed interest at
Senior secured notes (included in long term interest-bearing loans and borrowings)
Pay fixed INR and receive USD and pay fixed interest in INR at
The cash flow hedges through Cross Currency Swap (CCS) of USD
- All of the cash flow hedges were fully effective during the years ended March 31, 2024, 2023 and 2022.
- All of the underlying foreign currency and floating interest rate exposure is fully hedged with cash flow hedges as at March 31, 2024 and 2023.
The expiry dates of cash flow hedge deals range between April 15, 2024 to March 31, 2027.
F-102
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Foreign currency and interest rate risk
Forward contracts, swaps, call option and call spreads measured at FVTOCI are designated as hedging instruments in cash flow hedges of interest and principal payments in USD, CNH and EURO.
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Derivative contracts designated as hedging instruments - Non-current |
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F-103
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Hedge reserve movement
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For the year ended March 31, |
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a) Cash flow hedge reserve |
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(Gain) / loss reclassified to profit or loss on unwinding of derivative contract |
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(Gain) / loss reclassified to non-financial assets or liabilities as basis adjustment (under head property, plant and equipment) |
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(Gain) / loss reclassified to profit or loss as hedged future cash flows are no longer expected to occur |
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Income tax relating on cash flow hedges* |
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Opening balance (after non-controlling interest) |
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Effective portion of changes in fair value |
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Amount reclassified to profit or loss (under head "Finance costs and fair value change in derivative instruments") |
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Loss reclassified to non-financial assets or liabilities as basis adjustment (under head property, plant and equipment) |
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(Gain) / loss reclassified to profit or loss on unwinding of derivative contract |
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(Gain) / loss reclassified to profit or loss as hedged future cash flows are no longer expected to occur |
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Income tax relating to cost of hedge reserve* |
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Closing balance (after non-controlling interest) |
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OCI for the year |
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(Gain) / loss reclassified to non-financial assets or liabilities as basis adjustment (under head property, plant and equipment), net of tax |
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*includes amount recognised directly in equity
F-104
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
The Group on December 14, 2022, through its subsidiary, ReNew Power International Limited (RPIL), acquired
ii) The Group on August 5, 2022 entered into a joint venture agreement with Fluence Energy Singapore Pte. Ltd., to jointly establish a lithium ion Battery Energy Storage System (BESS) integration business in India including the sale, distribution and marketing of the technology and servicing the projects. The agreement prescribes the committed funding amount of USD
iii) The Group through its subsidiary 'ReNew Private Limited' entered into an agreement on July 27, 2023 with Indian Oil Corporation of India ('IOCL) and Larsen & Toubro Limited ('L&T') to form a joint controlled entity namely 'GH4 India Private Limited' (‘GH4’) incorporated under the laws of India. The aforesaid entity was incorporated with the purpose of developing (including construction) green hydrogen (and its derivatives including green ammonia, methanol, etc.), production assets, associated renewable asset. The Company invested INR
The Group has
F-105
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
Upon consummation of the Transaction explained in Note 1, the Company has issued following shares /warrants to the shareholders of RMG II, shareholders of RPL and PIPE investors:
- The Company acquired approximately
- Details of shares issued and cash paid to existing shareholders of RPL is as follows
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GS Wyvern Holdings Limited |
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Canada Pension Plan Investment Board |
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Abu Dhabi Investment Authority |
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JERA Power RN, B.V. |
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GEF SACEF India |
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Founder investors* |
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* Represents shares held by (a) Wisemore Advisory Private Limited, (b) Cognisa Investment, and (c) Mr. Sumant Sinha.
-
- Each outstanding warrant to purchase shares of RMG II’s common stock was converted into a warrant to acquire one common share of the Company. A total of
The Company has issued
For accounting purposes, RPL was deemed to be the accounting acquirer in this transaction and consequently, this transaction was treated as a capital transaction involving the issuance of RPL shares (refer Note 2.3).
The net assets acquired was the fair value of the net assets of RMG II, which on August 23, 2021 was INR
F-106
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
The Net assets, fair value of considerations and listing and related expenses amount was calculated as follows:
Particulars |
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Net Assets of RMG II |
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(2) PIPE investors |
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(3) Total net assets ((1)+(2)) |
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(4) Fair value of |
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(5) Fair value of consideration paid in excess of net assets acquired ((4)-(3)) |
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(6) Transaction costs related to acquisition and listing |
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(7) Listing and related expenses ((5)+(6)) |
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The costs incurred for this transaction was INR
^ The fair value of the shares in RPL has been determined using discounted cash flow method.
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August 23, 2021 |
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As a result of the Transaction, there was recognition of non-controlling interest of
Non-controlling shareholders of RPL (refer Note 20) have an option to offload their shareholding to the Company in accordance with the terms mentioned in the BCA at fair value of shares on the date of Put for cash. Put option liability with non-controlling interest accounted for at fair value. Subsequent changes to the put option liability are treated as equity transaction and hence accounted for in equity.
Certain non-controlling shareholders of RPL (excluding non-controlling shareholders having put option to be settled in cash as stated in above paragraph) have an arrangement with the Company to put shares held by them in the Company for fixed number of class A shares of the Company at time of exercise of put options. These put options are exercisable at sole discretion of non-controlling interest.
F-107
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
ReNew Private Limited
On August 23, 2021, the Group acquired an additional
For the year ended March 31, 2022
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There are other insignificant acquisitions of non-controlling interest for the years ended March 31, 2024, 2023 and 2022.
The Company through its subsidiary, ReNew Power Services Private Limited (ReNew Power Services) made the successful bid to acquire ReGen Powertech Private Limited (ReGen) and was declared the successful resolution applicant as per order of National Company Law Tribunal (NCLT) dated February 1, 2022. According to the approved resolution plan, ReNew Power Services as the successful resolution applicant, was required to transfer the first tranche of purchase consideration within
However, few aggrieved parties challenged the NCLT order approving ReNew Power Services' resolution plan in National Company Law Appellate Tribunal (NCLAT), which through its order dated March 9, 2022, the NCLAT directed deferment of the further implementation of the resolution plan through common order dated August 31, 2023, NCLAT set aside the order of NCLT which had approved the Resolution Plan of Renew Power Services Limited. Appeal against the said order is pending before the Supreme Court of India, in which notice has been issued and the next date of hearing is awaited. Renew Power Services has filed an application before NCLT seeking refund of the payment made by it in compliance and execution of the Resolution Plan which had been approved by NCLT and subsequently set aside by NCLAT. The matter before NCLT for refund of payment is currently pending.
The business activities of ReGen are being currently handled by resolution professional appointed by CoC and ReNew Power Services neither have any control nor significant influence over the relevant activities of ReGen.
On the basis of above facts and considering that the Group does not have control over ReGen in accordance with the definition of control laid out in IFRS 10, the Group has not consolidated ReGen in these consolidated financial statements.
F-108
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
During the year ended March 31, 2023, the Group through its subsidiaries engaged in transmission business wherein the subsidiaries had entered into Transmission Services Agreements (TSA) with the Government (Grantor) on BOOM and/or Build, Own, Operate and Transfer (BOOT) basis. The Group through its subsidiaries acts as a transmission licensee.
a) Accounting for transmission line BOOM projects
The TSAs have been entered for term of
Further, as per the electricity regulations applicable at the time of entering TSA, it was mandatory for the Group to hold transmission license in order to transmit electricity through its transmission line. In addition, even after the end of
Accordingly, the aforesaid TSA(s), read together with the prevailing regulations, were assessed to be Service Concession Agreements covered under IFRIC 12 and were accounted for using the financial asset model under IFRIC 12.
Subsequently, in January 2024, there are changes in the applicable regulations allowing companies which have entered into TSA under the BOOM model to independently operate the infrastructure without any grantor involvement, including determine tariff for its usage after the TSA term of
(i) On the date of change in the regulations, the Group has derecognised the contract asset of INR
(ii) The Group has also assessed that post change in regulation, the TSA would contain a lease element and a service element which would be separated and accounted for in accordance with IFRS 16 and IFRS 15 respectively. The said lease will be in the nature of an operating lease (refer Note 37).
The Group has
b) Accounting for transmission line BOOT projects under IFRIC 12, 'Service Concession Arrangements'
The TSAs have been entered for term of
Such Transmission project have fixed annual levelised tariff as per terms of TSA and such arrangements fall under the purview IFRIC 12, 'Service Concession Arrangements' and have been accounted as per financial asset model.
F-109
ReNew Energy Global Plc
Notes to the consolidated financial statements
(INR and USD amounts in millions, except share and par value data)
The change in regulation mentioned under (a) above does not impact TSAs covered under the BOOT model and accounting thereof as in these cases the Company is obligated to transfer the assets to the grantor at the end of the TSA period.
c)
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2023 |
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2024 |
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2024 |
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(INR) |
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(INR) |
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(USD) |
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Balance at the beginning of the year |
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Recognition of contract assets pursuant to recognition of construction revenue* |
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Unwinding of contract assets (calculated at the rate of |
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Derecognition of contract asset for BOOM projects (refer (a) above)** |
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( |
) |
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( |
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Balance at the end of the year |
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Non-current |
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Current |
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* includes profit of INR
** includes INR
d) The transaction price allocated to the remaining construction activities and operation and maintenance services is approximately INR
The Group has evaluated subsequent events through July 29, 2024, which is the date when the consolidated financial statements were authorised for issuance. There are no events which would require any material adjustments or disclosures in these consolidated financial statements.
F-110
Exhibit-8.1
List of significant subsidiaries of ReNew Global Energy Plc as of March 31, 2024
S. No |
Name |
Jurisdiction of incorporation |
1 |
ReNew Private Limited (Formerly known as ReNew Power Private Limited) |
India |
2 |
ReNew Wind Energy (Sipla) Private Limited |
India |
3 |
ReNew Green Energy Solutions Private Limited |
India |
4 |
Ostro Kannada Power Private Limited |
India |
5 |
ReNew Energy Markets Private Limited (Formerly known as ReNew Vayu Power Private Limited) |
India |
6 |
ReNew Solar Power Private Limited |
India |
7 |
ReNew Akshay Urja Limited |
India |
8 |
ReNew (Jharkhand One) Private Limited |
India |
9 |
RENSERV Global Private Limited (Formerly known as ReNew Services Private Limited) |
India |
10 |
Renew Surya Roshni Private limited |
India |
11 |
ReNew Jal Urja Private Limited |
India |
12 |
India Clean Energy Holdings |
Mauritius |
13 |
Diamond II Limited |
Mauritius |
Exhibit-11.1
RENEW ENERGY GLOBAL PLC INSIDER TRADING COMPLIANCE POLICY
(Effective from August 23, 2021)
This Insider Trading Compliance Policy (this “Policy”) of ReNew Energy Global plc (the “Company”) consists of seven sections:
Preventing insider trading is necessary to comply with securities laws and to preserve the reputation and integrity of the Company as well as that of all persons affiliated with the Company. “Insider trading” occurs when any person purchases or sells a security while in possession of inside information relating to the security. As explained in Section III below, “inside information” is information that is both “material” and “non-public”. Insider trading is a crime. The penalties for violating insider trading laws include imprisonment, disgorgement of profits, civil fines and significant criminal fines. Insider trading is also prohibited by this Policy, and violation of this Policy may result in Company-imposed sanctions, including termination of employment for cause.
This Policy applies to all officers, directors and employees of the Company and all officers, directors and employees of the Company’s subsidiaries. Individuals subject to this Policy are responsible for ensuring that members of their Household also comply with this Policy. This Policy also applies to any entities controlled by individuals subject to the Policy or any entities controlled by members of their Household, including any corporations, limited liability companies, partnerships or trusts, provided that, for these purposes, an individual subject to the Policy shall not be deemed to control a corporation solely by virtue of that individual having a position of non executive directorship on the board of that corporation (such entities, together with all officers,
Insider Trading Compliance Policy / Amended by Board on June, 3-4, 2024 / Version 3.0
directors and employees of the Company and their Household, are referred to as the “Covered Persons”), and transactions by these entities should be treated for the purposes of this Policy and applicable securities laws as if they were for the individual’s own account. This Policy extends to all activities within and outside an individual’s Company duties. Every officer, director and employee of the Company and the Company’s subsidiaries must review this Policy. Questions regarding the Policy should be directed to the Company Secretary of ReNew Private Limited.
This Policy addresses compliance with applicable U.S. laws.
No officer, director or employee shall purchase or sell any type of security while in possession of material, non-public information relating to the security.
These prohibitions do not apply to the following “permitted transactions”:
In addition, no officer, director or employee shall directly or indirectly communicate (or “tip”) material, non-public information to anyone outside of the Company (except in accordance
2
with the Company’s policies regarding the protection or authorized external disclosure of Company information) or to anyone within the Company other than on a need-to-know basis.
“Household” means, for all individuals subject to the Policy, their immediate family, the persons with whom they share the same dwelling, and their economic dependents, whether or not they share the same dwelling.
“Insider trading” refers to the purchase or sale of a security while in possession of material, non-public information relating to the security or its issuer.
“Securities” include stocks, bonds, notes, debentures, options, warrants and other convertible securities, as well as derivative instruments.
“Purchase” and “sale” are defined broadly under the federal securities law. “Purchase” includes not only the actual purchase of a security, but any contract to purchase or otherwise acquire a security. “Sale” includes not only the actual sale of a security, but any contract to sell or otherwise dispose of a security. These definitions extend to a broad range of transactions, including conventional cash-for-stock transactions, conversions, the exercise of stock options, and acquisitions and exercises of warrants or puts, calls or other derivative securities.
It is generally understood that insider trading includes the following:
The materiality of a fact depends upon the circumstances. A fact is considered “material” if there is a substantial likelihood that a reasonable investor would consider it important in making a decision to buy, sell or hold a security, or if the fact is likely to have a significant effect on the market price of the security. Material information can be positive or negative and can relate to virtually any aspect of a company’s business or to any type of security, debt or equity.
Examples of material information include (but are not limited to) information about:
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A good general rule of thumb: When in doubt, do not trade.
Information is “non-public” if it is not available to the general public. In order for information to be considered public, it must be widely disseminated in a manner making it generally available to investors through such media as Dow Jones, Business Wire, Reuters, The Wall Street Journal, Associated Press or United Press International, a broadcast on widely available radio or television programs, publication in a widely available newspaper, magazine or news website, a Regulation FD-compliant conference call or public disclosure documents filed with the U.S. Securities and Exchange Commission (“SEC”) that are available on the SEC’s website.
The circulation of rumors, even if accurate and reported in the media, does not constitute effective public dissemination. In addition, even after a public announcement, a reasonable period of time must lapse in order for the market to react to the information. Generally, one should allow one full trading day following publication as a reasonable waiting period before such information is deemed to be public. For purposes of this Policy, a “trading day” is a day on which U.S. national stock exchanges are open for trading.
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If, for example, the Company were to make an announcement on a Monday prior to 9:30
a.m. Eastern time, the information would be generally be deemed public after the close of trading on Monday. If an announcement were made on a Monday after 9:30 a.m. Eastern time, the information would be deemed public after the close of trading on Tuesday. If you have any question as to whether information is publicly available, please direct an inquiry to the Company Secretary of ReNew Private Limited.
“Insiders” include officers, directors and employees of a company and anyone else who has material non-public information about a company. Insiders have independent fiduciary duties to their company and its security-holders not to trade on material, non-public information relating to the company’s securities. All officers, directors and employees of the Company and its subsidiaries should consider themselves insiders with respect to material, non-public information about the Company’s business, activities and securities.
Individuals subject to this Policy are responsible for ensuring that members of their Household also comply with this Policy. This Policy also applies to any entities controlled by individuals subject to the Policy or any entities controlled by members of their Household, including any corporations, limited liability companies, partnerships or trusts, and transactions by these entities should be treated for the purposes of this Policy and applicable securities laws as if they were for the individual’s own account.
Insiders may be liable for communicating or tipping material, non-public information to a third party (“tippee”), and insider trading violations are not limited to trading or tipping by insiders. Persons other than insiders also can be liable for insider trading, including tippees who trade on material, non-public information tipped to them or individuals who trade on material, non-public information that has been misappropriated.
Tippees inherit an insider’s duties and are liable for trading on material, non-public information illegally tipped to them by an insider. Similarly, just as insiders are liable for the insider trading of their tippees, so are tippees who pass the information along to others who trade. In other words, a tippee’s liability for insider trading is no different from that of an insider. Tippees can obtain material, non-public information by receiving overt tips from others or through, among other things, conversations at social, business or other gatherings.
Penalties for trading on or tipping material, non-public information can extend significantly beyond any profits made or losses avoided, both for individuals engaging in such unlawful conduct and their employers. The SEC and the U.S. Department of Justice have made the civil and criminal prosecution of insider trading violations a top priority. Enforcement remedies available to the government or private plaintiffs under the federal securities laws include:
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In addition, insider trading could result in serious sanctions by the Company, including dismissal. Insider trading violations are not limited to violations of the federal securities laws. Other federal and state civil or criminal laws, such as laws prohibiting mail and wire fraud and the Racketeer Influenced and Corrupt Organizations Act, also may be violated in connection with insider trading.
The size of the transaction or the amount of profit received does not have to be significant to result in prosecution. The SEC has the ability to monitor even the smallest trades, and the SEC performs routine market surveillance. Brokers and dealers are required by law to inform the SEC of any possible violations by people who may have material, non-public information. The SEC aggressively investigates even small insider trading violations.
The following procedures have been established, and will be maintained and enforced, by the Company to prevent insider trading. Every officer, director and employee is required to follow these procedures (to the extent applicable).
To provide assistance in preventing inadvertent violations of applicable securities laws and to avoid the appearance of impropriety in connection with the purchase and sale of the Company’s securities, all transactions in the Company’s securities (including without limitation, acquisitions and dispositions of Company stock, pledging and margining the Company’s securities (not for purposes of purchasing the Company’s securities) to secure a margin loan or other loans, the exercise of stock options and the sale of Company stock issued upon exercise of stock options) by officers, directors and such other employees of the Company and its subsidiaries as are designated from time to time by the Chief Executive Officer, the Chief Financial Officer or the Company
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Secretary of ReNew Private Limited as being subject to this pre-clearance process (each, a “Pre- Clearance Person”) must be pre-cleared by the Chief Financial Officer or the Company Secretary of ReNew Private Limited. Pre-clearance does not relieve anyone of his or her responsibility under SEC rules.
A request for pre-clearance must be in writing (including without limitation by e-mail), should be made one (1) day in advance of the proposed transaction and should include the identity of the Pre-Clearance Person, the type of proposed transaction (for example, an open market purchase, a privately negotiated sale, an option exercise, etc.), the proposed date of the transaction and the number of shares, options or other securities to be involved. In addition, unless otherwise determined by the Chief Financial Officer or Company Secretary of ReNew Private Limited, the Pre-Clearance Person must execute a certification (in the form approved by the Chief Financial Officer or Company Secretary of ReNew Private Limited) that he, she or it is not aware of material, non-public information about the Company. The Chief Financial Officer /Company Secretary of ReNew Private Limited shall have sole discretion to decide whether to clear any contemplated transaction, provided that the Chief Financial Officer shall have sole discretion to decide whether to clear transactions by the Company Secretary of ReNew Private Limited or persons or entities subject to this Policy as a result of their relationship with the Company Secretary of ReNew Private Limited. Further, the Chief Executive Officer shall have sole discretion to decide whether to clear transactions by the Chief Financial Officer or persons or entities subject to this Policy as a result of their relationship with the Chief Financial Officer. Further, the Chairman of the Audit Committee shall have sole discretion to decide whether to clear transactions by the Chief Executive Officer or persons or entities subject to this Policy as a result of their relationship with the Chief Executive Officer. All trades that are pre-cleared must be effected within five business days of receipt of the pre-clearance unless a specific exception has been granted by a person who is authorized to grant pre-clearance in respect of that person (as set out in this paragraph).
A pre-cleared trade (or any portion of a pre-cleared trade) that has not been effected during the five business day period must be pre-cleared again prior to execution. Notwithstanding receipt of pre-clearance, if the Pre-Clearance Person becomes aware of material, non-public information or becomes subject to a black-out period before the transaction is effected, the transaction may not be completed. For the avoidance of doubt, pre-clearance is not required for purchases and sales of securities under a Trading Plan (as defined below) once the applicable cooling-off period has expired. No trades may be made under a Trading Plan until expiration of the applicable cooling- off period. With respect to any purchase or sale under a Trading Plan, the third party effecting transactions on behalf of the relevant director, officer or employee should be instructed to send duplicate confirmations of all such transactions to the Authorizing Officer (as defined below).
No officer, director or other employee designated from time to time by the Chief Executive Officer, Chief Financial Officer or the Company Secretary of ReNew Private Limited as being subject to quarterly black-out periods (each a “Black-out Restricted Person”) shall purchase or sell any security of the Company during the period beginning at 11:59 p.m., Eastern time, on the last trading day of the end of any fiscal quarter of the Company and ending at 11:59 p.m. upon completion of the first full trading day after the public release of earnings data for such fiscal quarter or during any other trading suspension period declared by the Company, except for
8
purchases and sales made pursuant to the permitted transactions described in Section II. If a Black- out Restricted Person had any open orders to buy or sell Company securities on the date a black- out period commenced other than pursuant to a Trading Plan, they must cancel these orders with their broker.
For example, if the Company’s third fiscal quarter ends on December 31, the corresponding black-out period would begin at 11:59 p.m., Eastern time, on December 31 and end at the close of trading (generally, 4:01 p.m., Eastern time) on the first full trading day after the public release of earnings data for such fiscal quarter. For the avoidance of doubt, any designation by the Board of Directors of the employees who are subject to quarterly black-out periods may be updated from time to time by the Chief Executive Officer, the Chief Financial Officer or the Company Secretary of ReNew Private Limited.
In order to assist you in complying with this Policy, the Company will deliver an e-mail (or other communication) notifying all Black-out Restricted Persons when a quarterly black-out period has begun and when such period has ended. The Company’s delivery or non-delivery of these e-mails (or other communication) does not relieve Black-out Restricted Persons of their obligation to only trade in the Company’s securities in full compliance with this Policy.
The safest period for trading in the Company’s securities, assuming the absence of material, non-public information, generally is the first ten trading days following the end of a black-out period discussed above. This is because officers, directors and employees will, as any quarter progresses, be increasingly likely to possess material, non-public information about the expected financial results for that quarter.
Exceptions to the black-out period policy may be approved only by the Chief Financial Officer or the Company Secretary of ReNew Private Limited (or, in the case of an exception for the Company Secretary of ReNew Private Limited or persons or entities subject to this Policy as a result of their relationship with the Company Secretary of ReNew Private Limited, the Chief Financial Officer, the Chief Executive Officer or, in the case of exceptions for directors, the Chief Financial Officer or the Chief Executive Officer or persons or entities subject to this policy as a result of their relationship with a director, the Chief Financial Officer or the Chief Executive Officer, the Board of Directors). Such hardship exceptions can only be granted if the requesting Black-out Restricted Person is not in possession of material, non-public information about the Company and is not otherwise prohibited from trading pursuant to this Policy. Hardship exceptions are granted extremely infrequently and only in extraordinary circumstances.
From time to time, the Company, through the Company Secretary of ReNew Private Limited or the Chief Financial Officer, may recommend that officers, directors, employees or others suspend trading in the Company’s securities because of developments that have not yet been disclosed to the public. Subject to the exceptions noted above, all those affected should not trade in the Company’s securities while the suspension is in effect and should not disclose to others that the Company has suspended trading. If the Company declares an ad hoc black-out period to which you are subject, you will be notified when such black-out begins and when it ends.
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If an individual is in possession of material, non-public information when his or her service terminates, that individual may not trade in the Company’s securities until that information has become public or is no longer material.
Access to material, non-public information about the Company, including the Company’s business, earnings or prospects, should be limited to officers, directors and employees of the Company on a need-to-know basis. In addition, such information should not be communicated to anyone outside the Company under any circumstances (except in accordance with the Company’s policies regarding the protection or authorized external disclosure of Company information) or to anyone within the Company on an other than need-to-know basis.
In communicating material, non-public information to employees of the Company, all officers, directors and employees must take care to emphasize the need for confidential treatment of such information and adherence to the Company’s policies with regard to confidential information.
The following procedures are designed to maintain confidentiality with respect to the Company’s business operations and activities.
All officers, directors and employees should take all steps and precautions necessary to restrict access to, and secure, material, non-public information by, among other things:
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Personnel involved with material, non-public information, to the extent feasible, should conduct their business and activities in areas separate from other Company activities.
Officers, directors and employees who learn material information about suppliers, customers, or competitors through their work at the Company, should keep it confidential and not buy or sell stock in such companies until the information becomes public. Officers, directors and employees should not give tips about such stock.
The Company has determined that there is a heightened legal risk and/or the appearance of improper or inappropriate conduct if the persons subject to this Policy engage in certain types of transactions. Therefore, officers, directors and all employees shall comply with the following policies with respect to certain transactions in the Company securities:
Short sales of the Company’s securities evidence an expectation on the part of the seller that the securities will decline in value, and therefore signal to the market that the seller has no confidence in the Company or its short-term prospects. In addition, short sales may reduce the seller’s incentive to improve the Company’s performance. For these reasons, short sales of the Company’s securities are prohibited by this Policy.
A transaction in options is, in effect, a bet on the short-term movement of the Company’s stock and therefore creates the appearance that an officer, director or employee is trading based on inside information. Transactions in options, whether traded on an exchange, on any other organized market or on an over the counter market, also may focus an officer’s, director’s or employee’s attention on short-term performance at the expense of the Company’s long-term objectives. Accordingly, transactions in puts, calls or other derivative securities involving the Company’s equity securities, on an exchange, on any other organized market or on an over the counter market, are prohibited by this Policy.
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Purchasing financial instruments, such as prepaid variable forward contracts, equity swaps, collars, and exchange funds, or otherwise engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of the Company’s equity securities, may cause an officer, director or employee to no longer have the same objectives as the Company’s other shareholders. All such transactions involving the Company’s equity securities, whether such securities were granted as compensation or are otherwise held, directly or indirectly, are prohibited by this Policy except in very limited circumstances subject to pre-clearance.
Purchasing on margin means borrowing from a brokerage firm, bank or other entity in order to purchase the Company’s securities (other than in connection with a cashless exercise of stock options through a broker under the Company’s equity plans). Margin purchases of the Company’s securities are prohibited by this Policy. This prohibition means, among other things, that you cannot hold the Company’s securities in a “margin account” (which would allow you to borrow against your holdings to buy Company securities). Pledging and margining the Company’s securities to secure margin or other loans (not for purposes of purchasing the Company’s securities) is allowed, provided that securities should be held by the Pledgor for at least 90 days and such transaction is pre-cleared in accordance with this Policy.
The Company will not arrange with brokers to administer cashless exercises on behalf of directors and executive officers of the Company. Directors and executive officers of the Company may use the cashless exercise feature of their equity awards only if (i) the director or officer retains a broker independently of the Company, (ii) the Company’s involvement is limited to confirming that it will deliver the stock promptly upon payment of the exercise price, (iii) the director or officer uses a “T+2” cashless exercise arrangement, in which the Company agrees to deliver stock against the payment of the purchase price on the same day the sale of the stock underlying the equity award settles and (iv) the director or officer otherwise complies with this Policy. Under a T+2 cashless exercise, a broker, the issuer and the issuer’s transfer agent work together to make all transactions settle simultaneously. This approach is to avoid any inference that the Company has “extended credit” in the form of a personal loan to the director or executive officer. Questions about cashless exercises should be directed to the Company Secretary of ReNew Private Limited.
A standing order placed with a broker to sell or purchase Company securities at a specified price leaves the security-holder with no control over the timing of the transaction. A transaction pursuant to a standing order, which does not meet the standards of a Trading Plan approved in compliance with this Policy, executed by the broker when the Covered Person is aware of material non-public information about the Company, may result in unlawful insider trading. Other than in connection with a Trading Plan approved in accordance with this Policy, entry into or fulfillment of a standing order is prohibited whenever a Covered Person is in possession of material non-
13
public information about the Company (including during a quarterly black-out period for Black- out Restricted Persons or ad hoc black-out period for those insiders subject to such procedures). All standing orders must be of limited duration, cancelable, and in the case of a Black-out Restricted Person or person subject to an ad hoc black-out period, must be immediately canceled upon commencement of a quarterly black-out or ad hoc black-out period, as applicable.
Nothing in this Policy is intended to limit the ability of a venture capital partnership or other similar entity with which a director is affiliated to distribute Company securities to its partners, members or other similar persons. It is also not intended to limit the ability of a shareholders of the Company to sell their shares. It is the responsibility of each affected director and the affiliated entity, in consultation with their own counsel (as appropriate), to determine the timing of any distributions, based on all relevant facts and circumstances and applicable securities laws.
Investing in the Company’s stock or other securities provides an opportunity to share in the future growth of the Company. But investment in the Company and sharing in the growth of the Company does not mean short range speculation based on fluctuations in the market. Such activities put the personal gain of the employee or director in conflict with the best interests of the Company and its shareholders. Although this policy does not mean that employees or directors may never sell shares, the Company encourages employees and directors to avoid frequent trading in Company stock. Speculating in Company stock is not part of the Company culture.
Rule 10b5-1 will protect directors, officers and employees from insider trading liability under Rule 10b5-1 for transactions under a previously established contract, plan or instruction to trade in the Company’s stock (a “Trading Plan”) entered into in accordance with the terms of Rule 10b5-1 and all applicable state laws. Participants must enter into a Trading Plan in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1, and must act in good faith with respect to each Trading Plan entered into. Transactions made pursuant to a Trading Plan will be exempt from the trading restrictions set forth in this Policy. The initiation of, and any modification to, any such Trading Plan will be deemed to be a transaction in the Company’s securities, and such initiation or modification is subject to all limitations and prohibitions relating to transactions in the Company’s securities. Each such Trading Plan, and any modification or termination thereof, must be submitted to and pre-approved by the Chief Financial Officer / Company Secretary of ReNew Private Limited, or such other person as the Board of Directors may designate from time to time (the “Authorizing Officer”), who may impose such conditions on the implementation and operation of the Trading Plan as the Authorizing Officer deems necessary or advisable. Approval process for Trading Plan shall be same as applicable for Pre-Clerance under Para IV A. Trading Plans, including all amendments thereto, must be in writing and signed by the
14
participant establishing the Trading Plan. The Company may keep a copy of each Trading Plan. However, compliance of the Trading Plan with the terms of Rule 10b5-1 and the execution of transactions pursuant to the Trading Plan are the sole responsibility of the person initiating the Trading Plan, not the Company or the Authorizing Officer.
Rule 10b5-1 presents an opportunity for insiders to establish arrangements to sell (or purchase) Company stock without the restrictions of trading windows and black-out periods, even when there is undisclosed material information. A Trading Plan may also help reduce negative publicity that may result when key executives sell the Company’s stock. Rule 10b5-1 only provides an “affirmative defense” in the event there is an insider trading lawsuit. It does not prevent someone from bringing a lawsuit.
A director, officer or employee may enter into a Trading Plan only when he or she is not in possession of material, non-public information and only during a trading window period outside of the trading black-out period. The Trading Plan must include representations certifying that, at the time of adoption, the participant: (a) is not aware of any material, non-public information about the Company or its securities, and (b) is adopting or modifying the Trading Plan in good faith and not as part of a plan or scheme to evade the prohibitions of Exchange Act Rule 10b-5.
The Company reserves the right from time to time to suspend, discontinue or otherwise prohibit any transaction in the Company’s securities, even pursuant to a previously approved Trading Plan, if the Authorizing Officer or the Board of Directors, in its discretion, determines that such suspension, discontinuation or other prohibition is in the best interests of the Company. Any Trading Plan submitted for approval hereunder should explicitly acknowledge the Company’s right to prohibit transactions in the Company’s securities. Failure to discontinue purchases and sales as directed shall constitute a violation of the terms of this Section VI and result in a loss of the exemption set forth herein.
Officers, directors and employees may adopt Trading Plans with brokers that outline a pre- set plan for trading of the Company’s stock, including the exercise of options. The first trade under a Trading Plan cannot occur until: (1) for directors and officers of the Company, the later of (a) 90 days following the later of adoption, amendment, or modification of the Trading Plan, or (b) two business days following the disclosure of the Company’s financial results in a Form 20-F or Form 6-K that discloses the Company’s financial results, in each case for the fiscal quarter in which the Trading Plan was adopted, amended, or modified (but in any event, the required cooling-off period is subject to a maximum of 120 days after adoption, amendment, or modification of the Trading Plan); or (2) for persons other than directors and officers of the Company, 30 days have elapsed following the adoption, amendment or modification of the Trading Plan (in each case, the “Waiting Period”).
Except in the case of sales to cover tax withholding transactions, a participant may have only one Trading Plan in effect at any time.1 A participant may, during the term of an existing Trading Plan, adopt a new Trading Plan to replace the existing Trading Plan, but only if the first
1 This restriction on overlapping Trading Plans does not apply to Trading Plans providing solely for nondiscretionary sell-to-cover transactions that are necessary to satisfy tax withholding obligations arising exclusively from the vesting of a compensatory award, such as restricted shares or restricted share units, where the insider does not otherwise exercise control over the timing of such sales (“Qualified Sell-to-Cover Transactions”).
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scheduled trade under the new Trading Plan does not occur before the last scheduled trade of the existing Trading Plan, and provided that if the existing Trading Plan is terminated early, the first trade under the new Trading Plan must not be scheduled to occur until after the applicable Waiting Period starting on the date of the termination of the existing Trading Plan has expired. The new Trading Plan must also comply with the guidelines regarding the Waiting Period described above.
Other than Trading Plans providing for Qualified Sell-to-Cover Transactions, a participant may have in effect only one Trading Plan that is designed to effect the open market purchase or sale of the total amount of the securities subject to the Trading Plan as a single transaction during any 12-month period. Please review the following description of how a Trading Plan works.
Pursuant to Rule 10b5-1, an individual’s purchase or sale of securities will not be “on the basis of” material, non-public information if:
review and approval of the Authorizing Officer. A person acting in good faith may amend a prior Trading Plan so long as such amendments are made outside of a quarterly trading black-out period and at a time when the Trading Plan participant does not possess material, non-public information. The Trading Plan amendment or modification must include a representation certifying the same.
Participants should only terminate a Trading Plan (1) during an open trading window and
(2) when the participant does not possess material, non-public information about the Company. If a participant terminates their Trading Plan early, they must wait until the start of the next open trading window before trading outside Trading Plan and may not enter into a new Trading Plan
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until the later of 30 days from the date the Trading Plan was terminated, and the start of the next open trading window.
Under certain circumstances, a Trading Plan must be revoked. This may include circumstances such as the announcement of a merger or the occurrence of an event that would cause the transaction either to violate the law or to have an adverse effect on the Company. The Authorizing Officer or administrator of the Company’s stock plans is authorized to notify the broker in such circumstances, thereby insulating the insider in the event of revocation.
Although non-discretionary Trading Plans are preferred, discretionary Trading Plans, where the discretion or control over trading is transferred to a broker, are permitted if pre-approved by the Authorizing Officer.
The Authorizing Officer must pre-approve any Trading Plan, arrangement or trading instructions, etc., involving potential sales or purchases of the Company’s stock or option exercises, including but not limited to, blind trusts, discretionary accounts with banks or brokers or limit orders. The actual transactions effected pursuant to a pre-approved Trading Plan will not be subject to further pre-clearance for transactions in the Company’s stock once the Trading Plan or other arrangement has been pre-approved.
If required, an SEC Form 144 will be filled out and filed by the individual/brokerage firm in accordance with the existing rules regarding Form 144 filings. A footnote at the bottom of the Form 144 should indicate that the trades “are in accordance with a Trading Plan that complies with Rule 10b5-1 and expires .”
Exercises of options for cash may be executed at any time. “Cashless exercise” option exercises through a broker are subject to trading windows. However, the Company will permit same day sales under Trading Plans. If a broker is required to execute a cashless exercise in accordance with a Trading Plan, then the Company must have exercise forms attached to the Trading Plan that are signed, undated and with the number of shares to be exercised left blank. Once a broker determines that the time is right to exercise the option and dispose of the shares in accordance with the Trading Plan, the broker will notify the Company in writing and the administrator of the Company’s stock plans will fill in the number of shares and the date of exercise on the previously signed exercise form. The insider should not be involved with this part of the exercise.
During an open trading window, trades differing from Trading Plan instructions that are already in place are allowed as long as the Trading Plan continues to be followed, but must be pre- cleared in advance pursuant to this Policy.
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The Company may make a public announcement that Trading Plans are being implemented in accordance with Rule 10b5-1. It will consider in each case whether a public announcement of a particular Trading Plan should be made. It may also make public announcements or respond to inquiries from the media as transactions are made under a Trading Plan.
The transactions prohibited under Section V of this Policy, including among others short sales and hedging transactions, may not be carried out through a Trading Plan or other arrangement or trading instruction involving potential sales or purchases of the Company’s securities.
None of the Company, the Authorizing Officer, the Chief Financial Officer, the Chief Executive Officer, the Company’s other employees or any other person will have any liability for any delay in reviewing, or refusal of, a Trading Plan submitted pursuant to this Section VI.A or a request for pre-clearance submitted pursuant to Section IV. Notwithstanding any review of a Trading Plan pursuant to this Section VI.A or pre-clearance of a transaction pursuant to Section IV of this Policy, none of the Company, the Authorizing Officer, the Chief Financial Officer, the Chief Executive Officer, the Company’s other employees or any other persons assumes any liability for the legality or consequences of such Trading Plan or transaction to the person engaging in or adopting such Trading Plan or transaction.
Schedule 13D and 13G. Section 13(d) of the Exchange Act requires the filing of a statement on Schedule 13D (or on Schedule 13G, in certain limited circumstances) by any person or group that acquires beneficial ownership of more than five percent of a class of equity securities registered under the Exchange Act. The threshold for reporting is met if the stock owned, when coupled with the amount of stock subject to options exercisable within 60 days, exceeds the five percent limit.
A report on Schedule 13D is required to be filed with the SEC within ten days after the reporting threshold is reached (as of September 30, 2024, the deadline for initial Schedule 13D filings is reduced to five business days after the reporting threshold is reached). If a material change occurs in the facts set forth in the Schedule 13D, such as an increase or decrease of one percent or more in the percentage of stock beneficially owned, an amendment disclosing the change must be filed promptly (as of September 30, 2024, the deadline for amended Schedule 13D filings is reduced to two business days after the occurrence of the material change in beneficial ownership). A decrease in beneficial ownership to less than five percent is per se material and must be reported. Schedule 13G reporting, which is more limited and subject to fewer updating requirements than Schedule 13D reporting, is generally available for equity securities acquired before the Company’s IPO.
A person is deemed the beneficial owner of securities for purposes of Section 13(d) if such person has or shares voting power (i.e., the power to vote or direct the voting of the securities) or
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dispositive power (i.e., the power to sell or direct the sale of the securities). As is true under Section 16(a) of the Securities Exchange Act of 1934, a person filing a Schedule 13D may seek to disclaim beneficial ownership of any securities attributed to him or her if he or she believes there is a reasonable basis for doing so.
After reading this Policy and on an annual basis, all officers, directors and employees should execute and return to the Company Secretary of ReNew Private Limited the Certification of Compliance form attached hereto as “Attachment A.”
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ATTACHMENT A CERTIFICATION OF COMPLIANCE
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RETURN BY [ ] [insert return deadline] |
TO: |
, [ Company Secretary of ReNew Private Limited] |
FROM: |
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RE: |
INSIDER TRADING COMPLIANCE POLICY OF RENEW ENERGY GLOBAL PLC |
I have received, reviewed and understand the above-referenced Insider Trading Compliance Policy and undertake, as a condition to my present and continued employment with (or, if I am not an employee, affiliation with) ReNew Energy Global plc, to comply fully with the policies and procedures contained therein.
[I hereby certify, to the best of my knowledge, that during the financial year ending March 31, 20[ ], I have complied fully with all policies and procedures set forth in the above- referenced Insider Trading Compliance Policy.]
SIGNATURE |
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DATE |
TITLE |
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|
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Exhibit-12.1
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Sumant Sinha, certify that:
Date: July 30, 2024
By: /s/ Sumant Sinha
Name: Sumant Sinha
Title: Chief Executive Officer
Exhibit-12.2
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Kailash Vaswani, certify that:
Date: July 30, 2024
By: /s/ Kailash Vaswani
Name: Kailash Vaswani
Title: Chief Financial Officer
Exhibit-13.1
Certification of Chief Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of ReNew Energy Global plc (the “Company”) hereby certifies, to such officer’s knowledge, that:
Date: July 30, 2024
By: /s/ Sumant Sinha
Name: Sumant Sinha
Title: Chief Executive Officer
The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. Section 1350, and is not being “filed” either as part of the Report or as a separate disclosure statement, and is not to be incorporated by reference into the Report or any other filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. The foregoing certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Section 18 or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.
Exhibit-13.2
Certification of Chief Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of ReNew Energy Global plc (the “Company”) hereby certifies, to such officer’s knowledge, that:
Date: July 30, 2024
By: /s/ Kailash Vaswani
Name: Kailash Vaswani
Title: Chief Financial Officer
The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. Section 1350, and is not being “filed” either as part of the Report or as a separate disclosure statement, and is not to be incorporated by reference into the Report or any other filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. The foregoing certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Section 18 or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.
Exhibit-97.1
ReNew Energy Global plc
the “Company”
Compensation Clawback Policy
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Subsequent changes in a Covered Executive’s employment status, including retirement or termination of employment, do not affect the Company’s rights to recover Incentive-based Compensation pursuant to this Policy.
The Board shall determine, in its sole discretion, the method of recovering any Incentive-based Compensation pursuant to this Policy. Such methods may include, but are not limited to: (i) direct recovery by reimbursement; (ii) set-off against future compensation; (iii) forfeiture of equity awards; (iv) set-off or cancelation against planned future awards; (v) forfeiture of deferred compensation (subject to compliance with the Internal Revenue Code and related regulations); and/or (vi) any other recovery action approved by the Board and permitted under applicable law.
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Annex A
RENEW ENERGY GLOBAL PLC
COMPENSATION CLAWBACK POLICY
ACKNOWLEDGEMENT FORM
By signing below, the undersigned acknowledges and confirms that the undersigned has received and reviewed a copy of the ReNew Energy Global plc (the “Company”) Compensation Clawback Policy (the “Policy”). Capitalized terms used but not defined in this Acknowledgement Form (this “Acknowledgement Form”) shall have the meanings set forth in the Policy.
By signing this Acknowledgement Form, the undersigned acknowledges and agrees that the undersigned is and will continue to be subject to the Policy and that the Policy will apply both during and after the undersigned’s employment with the Company. Further, by signing below, the undersigned agrees to abide by the terms of the Policy, including, without limitation, by returning any Incentive-based Compensation subject to recovery under the Policy to the Company to the extent required by, and in a manner consistent with, the Policy.
________________________________
Signature
________________________________
Print Name
________________________________
Date
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