The Scheme of Arrangement for the vesting of Mumbai Power Business (MPB) of the RInfra to its resulting wholly owned subsidiary viz. Reliance Electric Generation and Supply (REGSL) has been implemented on August 29, 2018 with effect from April 01, 2018 after receiving all necessary approvals. Pursuant to the Share Purchase Agreement entered with Adani Transmission (ATL) for the sale of MPB, the Parent Company on August 29, 2018 divested its entire stake in REGSL. The results of the MPB are classified as Discontinued operations as per Ind AS 105 "Non Current Assets held for sale and discontinued operations". Arising out of vesting of MPB, the profit of" 3,791.38 crore Including reversal of deferred tax liability of " 2,295.89 crore has been shown as from Discontinued Operations for the quarter ended September 30,2018.

The dispute between Delhi Airport Metro Express Private (DAMEPL) and Delhi Metro Rail Corporation (DMRC) was referred to arbitration tribunal, which vide its order dated May 11, 2017, granted arbitration award in favour of DAMEPL of Rs 4,662.59 crore on the date of the Award. DMRC challenged the Arbitration award before the single judge of Hon'ble Delhi High Court The Single Judge of Hon'ble Delhi High Court vide its order dated March 06, 2018 upheld the arbitration award and directed DMRC to keep the loan accounts of DAMEPL standard. DMRC preferred an appeal against the order of the single judge before the Division Bench of the Hon'ble Delhi High Court. The Divison Bench post completion of hearing has reserved its judgement. The Division Bench, in the interim, has directed DMRC to service all the secured debt liabilities of DAMEPL. Accordingiy, DAMEPL has made payment due in respect of secured debt liabilities. Subject to the final order of the Division Bench, an amount of" 320.51 crore has been accounted as income by DAMEPL during the quarter ended September 30, 2018.

Pursuant to the Scheme of Amalgamation of Reliance Infraprojects with RInfra, sanctioned by the Hon'ble High Court of Judicature at Bombay on March 30, 2011, net foreign exchange gain of" 89.55 crore and gain of" 155.56 crore for the quarter and half year ended September 30, 2018 has been credited to the Consolidated Statement of Profit and Loss and an equivalent amount has been transferred to General Reserve. Had such transfer not been done, the Consolidated Profit before tax for the quarter and half year ended September 30, 2018 wouid have been higher by" 89.55 crore and" 155.56 crore respectively and General Reserve would have been lower by an equivalent amount. The treatment prescribed under the Scheme overrides the relevant provisions of Ind AS 1 "Presentation of Financial Statements".

• Marginal upside in sales was largely due to higher infrastructure business revenue. While the segment revenue of power business was up by 1% to Rs 4585.89 crore (or 88% of sales) that of infrastructure was up by 14% to Rs 373.62 crore (or 7% of sales). The segment revenue of EPC was down by 22% to Rs 260.65 crore (or 5% of sales).
• EBIT was down by 10% to Rs 772.68 crore and that is largely due increase in profitability of both EPC and infra business. Despite marginally higher sales, the segment profit of power business was lower by 18% to Rs 572.96 crore dragged largely by lower margin. The segment profit of Infrastructure business was up by 28% to Rs 130.37 crore aided by higher sales as well as higher margin. The segment margin of infra expanded by 400 bps to 34.9%. Despite lower sales the segment profit of EPC was higher by 16% to Rs 69.35 crore with its segment margin expand by strong 840 bps to 26%.

Half yearly performance

Consolidated sales was up by 4% to Rs 11150.63 crore and that with flat OPM at 23.2%, the operating profit was up by 4% to Rs 2582.05 crore. After accounting for higher OI, lower interest and higher deprecation the PBT before RI & EO was up by 408% to Rs 1511.37 crore. The regulatory expenses was up by 88% to Rs 750.91 crore and thus the PBT after RI but before EO was a profit of Rs 760.46 crore compared to a loss of Rs 102.42 crore in the corresponding previous period. The EO expense jumped to Rs 4200.00 crore (compared to an income of Rs 295.39 crore in corresponding previous period) and thus it was a loss of Rs 3439.54 crore at PBT level compared to a profit of Rs 192.97 crore in the corresponding previous period. Taxation write back was higher by 272% to Rs 221.78 crore and thus it was a loss of Rs 3217.76 crore at PAT level compared to a profit of Rs 252.58 crore in the corresponding previous period.

Share of loss from associates was Rs 7.76 crore compared to a profit of Rs 95.29 crore in corresponding previous period. Minority interest was share of profit of Rs 16.99 crore compared to a loss of Rs 32.14 in the corresponding previous period. Thus the net profit before profit discontinued business was a loss of Rs 3242.51 crore compared to a profit of Rs 380.01 crore in the corresponding previous period. The profit from discontinued business was up by 661% to Rs 3791.38 crore and thus at net profit level it was a profit of Rs 548.87 crore, a fall of 37%.

Other comprehensive income was Rs 100.07 crore compared to an expense of Rs 11.34 crore in the corresponding previous period. Thus the total comprehensive income was down by 25% to Rs 648.94 crore.

Other developments

EPC order book as end of Sep 30, 2018 was Rs 27800 crore a jump from about Rs 5635 crore as end of Sep 30, 2017.

In respect of a partly fulfilled order for delivery of vessels by RNaval, an associate of the Parent Company, the customer has failed to take delivery of one completed vessel and has in May 2018 invoked performance and other bank guarantees. RNavai has challenged the said actions including invocation of guarantees in a writ petition. RNaval has been advised that refusal of the customer to take the delivery of the vessel is untenable in law and accordingly, the amount paid (against invocation of guarantees) by the banks to the customer as well as amount unbilled to the customers is considered realizable as on September 30,2018.

Pending finalization of the financial restructuring which is being examined by a committee of directors of Reliance Naval and Engineering Limited (RNaval), an associate of the RInfra, RNaval has prepared its financial statements on a going concern basis.

In respect of Mumbai Metro One Private Limited (MMOPL), a subsidiary of the Parent Company, the net worth has eroded and as at the period-end, current liabilities exceeded its current assets. MMOPL is seeking overall commercial viability which will result in an improvement in cash flows and enable the Company to meet its financial obligations. It has shown year-on-year growth in passenger traffic and the revenues of the Company have been sufficient to recover its operating costs and the EBITA (Earnings before Interest, Tax and Amortization) has been positive since commencement of operations. MMOPL is in active negotiations with its bankers for an appropriate debt resolution plan and the Parent Company has confirmed to provide necessary support to enable MMOPL to operate as a going concern and accordingly the financial statements of MMOPL have been prepared on a going concern basis.

Delhi Electricity Regulatory Commission (DERC) issued its Tariff Orders on September 29, 2015 up to March 31, 2014 and on August 31, 2017 for the Financial Years 2014-15 and 2015-16 and on March 28, 2018 for the Financial Year 2016-17 to two subsidiaries of the Parent Company, namely, BSES Rajdhani Power (BRPL) and BSES Yamuna Power (BYPL) (Delhi . Discoms), whereby DERC had trued up the revenue gap with certain dis-allowances. The Delhi Discoms have preferred appeals against the orders before Hon'ble Appellate Tribunal for Electricity (APTEL). Based on legal opinion, the impacts of such disallowances, which are subject matter of appeal, have not been considered in the computation of regulatory assets for the respective years.

NTPC Limited served notice to Delhi Discoms for regulation (suspension) of power supply on February 01, 2014 due to delay in payments. The Delhi Dlscoms appealed against the notice before the Hon'ble Supreme Court (SC) and prayed for suitable direction from Hon'ble SC to DERC for providing cost reflective tariff and giving a roadmap for liquidation of the accumulated Regulatory Assets. The Hon'ble SC in Its interim order directed the Delhi Discoms to pay the current dues. The Delhi Discoms sought modification of the said order so as to allow them to pay 70% of the current dues. In the last hearing on May 02, 2018, the Hon'ble Judge did not pronounce the judgement. Since then, both the Judges have retired. The matter shall be reheard before another Bench.

Pursuant to the direction of the Department of Power (GoNCTD) on January 07, 2014, the Comptroller and Auditor General of India (CAG) conducted audit of Delhi Discoms and submitted the draft audit report. The Delhi Discoms challenged the direction of GoNCTD before the Hon'ble High Court of Delhi (HC). The Hon'ble HC in its order dated October 30, 2015 set aside the directions of GoNCTD and directed that "all actions taken pursuant to the directions and all acts undertaken in pursuance thereof are infructuous". The aggrieved parties have filed an appeal against the Hon'ble HC judgement before the Hon'ble Supreme Court (SC) which was last heard on March s, 2017. The Court has reserved its order on the issue whether it would like to hear the matter or transfer it to the constitutional bench where matter between GoNCTD powers vis-à-vis Lieutenant Governor (LG) powers was then pending. On July 03, 2017 the Bench opined that the instant appeals need not be referred to the Constitution Bench and adjudication of the appeals should not await the outcome of the decision of the Constitution Bench. In terms of the signed order, appeals were directed to be listed for hearing on merits. Next date of hearing is not yet fixed;

Reliance Bangladesh LNG & Power Limited (RBLPL), subsidiary of Reliance Power Limited (RPower),an associate of the Parent Company has made substantial progress which includes Intialling of all project agreements , finalization of EPC contract and receipt of approval of financing of the project with respect to one module of 754 MW to be supplied by Samalkot Power Limited (SMPL). For balance two (2) modules, it is in advanced stage of discussion with appropriate authorities in Bangladesh for grant of necessary approvals. Considering these plans, including relocation of unused assets acquired for SMPL to Bangladesh project and support from RPower, SMPL would be able to meet Its financial obligation and has prepared its financial statements on a going concern basis.