The Directors present the 23rd Annual Report and the audited accounts for the financial year ended March 31, 2017,
The performance of the Company (consolidated and standalone) for the financial year ended March 31, 2017, is summarized below:
Financial Year ended March 31, 2017
Financial Year ended March 31, 2016
Rs, in lakhs (Consolidated)
Rs, in lakhs (Standalone)
Rs, in lakhs (Consolidated)
Rs, in lakhs (Standalone)
Profit before tax
Less: Provision for taxation (Net)
Profit after tax
During the financial year under review, the total Income of the Company was Rs, 47,662 lakhs against Rs, 1,58,224 lakhs in the previous year on a standalone basis. The Company has earned a Profit after tax of Rs, 6,426 lakhs compared to Rs, 1,29,824 lakhs in the previous year which included a dividend Income of Rs, 28,901 lakhs from its subsidiary companies on a standalone basis.
During the year under review, the Board of Directors has not recommended dividend on the Equity Shares of the Company
The Company''''s Dividend Distribution Policy forms part of this Annual Report.
During the year 2016-17 all the operating plants of the Company which are functioning through its subsidiary companies performed exceedingly well both in terms of efficiency parameters and profitability. The PLF of the three thermal plants of the Company (Sasan Power, Rosa Power and Butibori Power) accounting for a total aggregate capacity of 5,760 MW was 79% as against the all India average of 60%.
The Company''''s Sasan UMPP (Capacity 3,960 MW) had a very impressive year generating 29,476 MUs for the year, with the Plant Load Factor (PLF) being 85%.
The Sasan UMPP is the World''''s largest integrated power plant and the Moher and Moher Amlohri Coal mines attached to the plant were the biggest coal mines in the country in terms of total quantity of coal excavated, including the Overburden handled at 74 Million CuM, the total volume handled at Sasan Coal Mine during the year was 85 Million CuM, making it the largest mine in the country in terms of volume handled,
Sasan Power won the coveted Global Sustainability Leadership Award in the CSR category
The 1,200 MW Rosa Thermal plant at Shahjahanpur in Uttar Pradesh, owned by the Company''''s subsidiary Rosa Power Supply Company Limited also had an excellent year in terms of profitability. Its Profit after tax rose by 27% in comparison to the previous year. The Rosa power plant received prestigious accolades and awards from prestigious Institutions for excellence in CSR, Training and for best practices in HR,
The Butibori Thermal plant (600 MW) in Maharashtra also had a successful year recording a plant availability factor of 88% for the year. The plant also received recognition from prestigious bodies for excellence in the areas of the environment and energy. It won accolades for its initiatives in the area of education as part of its CSR Projects.
The 40 MW Solar PV Project in Rajasthan also performed satisfactorily generating revenue and profitability of Rs, 12,151 lakhs and Rs, 4,114 lakhs respectively for the year 2016-17,
The Solar CSP (100 MW) plant in Rajasthan has overcome its technical challenges and is on course to reaching stability in operations.
The Company''''s Wind farm at Vashpet in Sangli District of Maharashtra also performed satisfactorily during 2016-17,
As reported in the previous year, the Company''''s subsidiary Jharkhand Integrated Power Limited which was supposed to develop the 3,960 MW Tilaiya UMPP terminated the PPA with its procurers due to their failure to meet the conditions subsequent as per the Power Purchase Agreement (PPA), The Company is in advanced stage of concluding the arrangements culminating in the handing over of the project to the procurers.
Proposed gas-based project in Bangladesh
The Directors are pleased to inform that during the year the progress achieved in the implementation of the gas-based project in Bangladesh was significant.
The project involves development and operation of a 750 MW Combined Cycle Power Plant (CCPP) using Re-gasified Liquefied Natural Gas (LNG). The project also envisages the setting up of a Floating Storage Unit (FSU) based LNG Terminal with Degasification facility on land,
The Company has initialed project agreements with the Authorities in Bangladesh including Power Purchase Agreement,
The project also envisages use of some of the equipments purchased for Samalkot Power Project,
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as stipulated under the Listing Regulations is presented in a separate section forming part of this Annual Report.
During the year under review, the Company has issued Redeemable Non-convertible Secured Debentures aggregating to '''' 560 crores which are outstanding as on date. These debentures are listed on BSE Limited,
The Company has not accepted any deposits from the public which comes within the purview of Section 73 of the Companies Act, 2013 (hereinafter referred to as ''''the Act'''') read with the Companies (Acceptance of Deposits) Rules, 2014,
Particulars of Investments
Pursuant to the provisions of Section 186 of the Act, the details of Investments made are provided in the unabridged standalone financial statements under Note nos. 4.4(a) and 4.7(a),
Subsidiary and Associate Companies
As on March 31, 2017, the Company had 49 subsidiaries under its fold.
During the year RPL Aditya Power Private Limited has ceased to be subsidiary with effect from March 3, 2017,
The Company had the following Associate Companies as on March 31, 2017:
1. RPL Sun Power Private Limited (Formerly known as Reliance Biomass Power Private Limited)
2. RPL Photon Private Limited (Formerly known as Reliance Renewable Power Private Limited)
3. RPL Sun Technique Private Limited (Formerly known as Reliance Tidal Power Private Limited)
The operating and financial performance of the major subsidiary companies, has been discussed in the Management Discussion and Analysis Report forming a part of this Annual Report. In addition, the financial results of the subsidiary companies have been consolidated with those of the parent company. The Company''''s policy for determining material subsidiaries may also be accessed on the Company''''s website at the link http://www reliancepower.co.in/pdf/Policy_for_Determination_of_Material_ Subsidiary.pdf,
Financial Statements - Application of the Companies (Indian Accounting Standards) Rules, 2015
The Ministry of Corporate Affairs (MCA) vide its Notification No. G.S.R. 111(E) dated February 16, 2015, has made the application of the Companies (Indian Accounting Standards) Rules, 2015 (Ind-AS Rules) effective from April 1, 2015 for certain categories of companies.
The audited financial statement of the Company drawn up both on standalone and consolidated basis for the financial year ended March 31, 2017 are in accordance with the requirements of the Ind-AS Rules.
Consolidated Financial Statement
The Audited Consolidated Financial Statement for the financial year ended March 31, 2017, based on the financial statements received from subsidiaries and associates, as approved by their respective Board of Directors, have been prepared in accordance with Ind-AS Rules and relevant provisions of the Companies Act, 2013.
Dr. Yogendra Narain, one of the Independent directors who has been associated with the Company since the year 2007 retires from the Board at the ensuing Annual General Meeting (AGM) upon attaining the age of 75 years which is the retirement age for Independent directors as per the Company''''s Board Charter,
The Board of Directors place on record their sincere appreciation for the outstanding contribution made by Dr. Yogendra Narain during his tenure of association with the Company
Consequent upon the retirement of Dr. Yogendra Narain as stated above, the Company proposes to appoint Shri K. Ravikumar, a technocrat of eminence as an Independent Director to hold office from the conclusion of the ensuing AGM for a term of three consecutive years.
The Company has received a notice in writing from a member along with the requisite deposit under Section 160 of the Act, proposing the candidature of Shri K. Ravikumar for the office of Director of the Company. The Nomination and Remuneration Committee of the Board, has also recommended the appointment of Shri K. Ravikumar as an Independent Director,
Shri D. J. Kakalia who is aged 68 years and Smt. Rashna Khan, who is aged 54 years have been appointed as Independent Directors by the members through postal ballot on September 27, 2014 to hold office for a term up to three consecutive years effective from the date of passing of the aforesaid resolution i.e. September 27, 2014.
The Company has received notices in writing from a member along with the requisite deposit under Section 1 60 of the Act, proposing the candidatures of Shri D. J. Kakalia and Smt, Rashna Khan, for the office of Directors of the Company. The Nomination and Remuneration Committee of the Board, has also recommended the re-appointment of Shri D. J. Kakalia and Smt, Rashna Khan, as Independent Directors,
Dr. V. K. Chaturvedi who has been associated with the Company since the year 2007 as a non-executive director, has, due to reasons of old age, relinquished his position as a director of the Company with effect from April 13, 2017.
The Board of Directors has placed on record their sincere appreciation for the outstanding contribution made by Dr. Chaturvedi during his tenure of association with the Company,
The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence as prescribed under the Act and the Listing Regulations,
The details of programmes for familiarization of Independent Directors with the Company, nature of industry in which the Company operates and related matters have been put up on the website of the Company at the link: http://www.reliancepower, co.in/pdf/Familiarisation_Policy. pdf.
In accordance with the provisions of the Act, Shri Sateesh Seth, Non-Executive Director retires by rotation and being eligible, has offered himself for re-appointment at the ensuing AGM,
Appointment of Whole-time Director
The Board of Directors at their Meeting held on April 13, 2017, have decided to elevate Shri N. Venugopala Rao, Chief Executive Officer (CEO) of the Company, to the position of a Whole-time director with effect from the said date for a period of three years. He has been appointed as an Additional Director in the capacity of a Whole-time director and as per the provisions of the Act, holds office only upto the date of the ensuing AGM, The appointment and the remuneration payable to Shri Rao during the above tenure of appointment are subject to the approval of the members at the ensuing AGM. Prior to the above appointment Shri Rao had been appointed by the Board as CEO of the Company in October 2015,
The Company has received a notice in writing from a member along with the requisite deposit under Section 160 of the Act, proposing the candidature of Shri Rao for the office of Director of the Company. The Nomination and Remuneration Committee of the Board, has also recommended the appointment of Shri N, Venugopala Rao, as a Director
Particulars of Directors proposed to be appointed
Pursuant to the provisions of Section 152(5) of the Act read with Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the brief resume of Shri K. Ravikumar, Shri D. J. Kakalia, Smt. Rashna Khan, Shri Sateesh Seth and Shri N. Venugopala Rao, who are proposed to be appointed at the ensuing AGM as above, along with the information regarding the nature of their expertise in specific functional areas and names of the companies in which they hold directorship and / or membership / chairmanship of Committees of the respective Boards, shareholding and relationship between Directors, interse, is given in the section on Corporate Governance Report forming part of this Annual Report,
Key Managerial Personnel
Shri Suresh Nagarajan was appointed as the Chief Financial Officer of the Company and designated as the Key Managerial Personnel (KMP) by the Board at its meeting held on January 5, 2017.
Shri Ashutosh Agarwala, has resigned as the Chief Financial Officer effective from August 12, 2016.
Shri N. Venugopala Rao, appointed as Whole-time Director with effect from April 13, 2017 and Shri Ramaswami Kalidas, the Company Secretary are the other KMPs,
Evaluation of Directors, Board and Committees
The Board has devised a policy for performance evaluation of its individual directors, the Board and the Committees, which includes the criteria for performance evaluation.
Pursuant to Section 178(2) of the Act read with Rules made there under and Regulation 17(10) of the Listing Regulations, the Board has carried out an annual evaluation of its own performance, working of the Committees, and the directors individually. The Board''''s performance was evaluated based on inputs received from all the Directors after considering criteria such as Board composition and structure, effectiveness of processes and information provided to the Board, etc.
The evaluation process, inter alia, considers attendance of Directors at Board and Committee meetings, effective participation, domain knowledge, compliance with code of conduct, vision and strategy, bench marks established by global peers, etc.
The Board carried out annual performance valuation of the Board Committees and individual Directors internally. The performance of each committee was evaluated by the Board based on evaluation reports received from respective Board Committees,
A separate meeting of the independent directors was also held during the year for evaluation of the performance of no independent directors, performance of the Board as a whole and that of the Chairman. In accordance with the requirements of the Statute and the Listing Regulations, the Meeting was attended by all independent directors,
The Nomination and Remuneration Committee has also reviewed the performance of the individual directors based on their knowledge, level of preparation and effective participation at meetings, understanding of their roles as directors, etc.
Policy on appointment and Remuneration for Directors, Key Managerial Personnel and Senior Management employees
The Nomination and Remuneration Committee has devised a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Employees and their remuneration. The Committee has formulated the criteria for determining the qualifications, positive attributes and independence of Directors, which has been put up on the Company''''s website. Further, the Committee has also devised a policy relating to remuneration for Key Managerial Personnel and senior management employees. All the directors, being non-executive, as at the end of the Financial year 2016-17 were paid only sitting fees for attending the meetings of the Board and its Committees, The policy on the above is attached as Annexure - A.
Directors'''' Responsibility Statement
Pursuant to the requirements under Section 134(5) of the Act with respect to Directors'''' Responsibility Statement, it is hereby confirmed that:
i. I n the preparation of the annual financial statement for the financial year ended March 31, 2017, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;
ii. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for the year ended on that date;
iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. The Directors had prepared the annual financial statement for the financial year ended March 31, 2017 on a ''''going concern'''' basis;
v. The Directors had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively; and
vi. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Contracts and Arrangements with Related Parties
All contracts / arrangements / transactions entered into by the Company during the financial year under review with related parties were at an arm''''s length basis and in the ordinary course of business. No materially significant related party transactions were made by the Company with its Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large,
All Related Party Transactions were placed before the Audit Committee for approval. Omnibus approvals of the Audit Committee were obtained for the transactions which were of a repetitive nature. Transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee on a quarterly basis. The policy on Related Party Transactions as approved by the Board has been uploaded on the Company''''s website at the link http://www.reliancepower, co.in/pdf/Policy_for_Related_Party_Transaction.pdf.
None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company
Material Changes and Commitments, if any, affecting the financial position of the Company
There were no material changes and commitments affecting the financial position of the Company, which have occurred between the close of the financial year till the date of this Report,
Meetings of the Board
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, five Meetings of the Board were held, details of which are given in the Corporate Governance Report.
The Audit Committee of the Board consists of the following Independent Directors namely Dr. Yogendra Narain (Chairman), Shri D. J. Kakalia and Smt. Rashna Khan. Shri Sateesh Seth, Non-independent non-executive Director is a member of the Committee. During the year, all the recommendations made by the Audit Committee were accepted by the Board,
Auditors and Auditors'''' Report
In accordance with the provisions of Section 139(2) of the Companies Act, 2013 (the Act), which, inter alia provides that the rotation of the statutory auditors, M/s. Pathak H. D. & Associates (Firm Registration No.107783W) were appointed at the last AGM for a period of five consecutive years commencing with the conclusion of the said Meeting subject to their appointment being ratified by the members at every subsequent Meeting.
With a view to facilitate the phased transition to the requirements of rotational audit as comprehended under the Act, considering the fact the Company has joint auditors, M/s. Price Waterhouse the other Joint statutory auditors were re-appointed at the last AGM to hold office until the conclusion of the ensuing AGM, They therefore demit office at the ensuing AGM,
To complete the phased transition as stated above, it is proposed to appoint M/s. B S R & Co. LLP, Chartered Accountants (Firm Registration No.101248W/W100022) as statutory auditors, for a period of five consecutive years beginning from the conclusion of this AGM till the conclusion of the 28th AGM subject to their appointment being ratified by the members,
M/s. B S R & Co. LLP, Chartered Accountants, have provided a certificate to the Company that they satisfy the criteria laid down in Section 141 of the Act. They have also given their written consent for the proposed appointment.
The Company has also received a confirmation from M/s. Pathak
H. D. & Associates, to the effect that they are eligible to continue as the Statutory Auditors. They have also provided a certificate to indicate that they have satisfied the criteria provided in Section 141 of the Act.
It is proposed to ratify the appointment of M/s. Pathak H.D, & Associates as the Statutory Auditors of the Company at the ensuing AGM of the members,
Shareholders are requested to approve the appointment of the Auditors as above at the ensuing AGM,
The observations and comments given by the Auditors in their report read together with the notes on the financial statements are self explanatory and hence, do not call for any further comments under Section 134 of the Act,
Pursuant to the provisions of the Act and the Companies (Audit and Auditors) Rules, 2014, the Board of Directors have appointed M/s. Talati & Associates, Cost Accountants, as the Cost Auditors in respect of its 45 MW Wind Farm Power project at Vashpet, Dist. Sangali, Maharashtra for the financial year ending March 31, 2018, subject to the remuneration being ratified by the shareholders at the ensuing AGM of the Company
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 201 4, the Board has appointed M/s. Ajay Kumar & Co., Company Secretaries in Practice to undertake the Secretarial Audit of the Company. There are no qualifications, reservations or adverse remarks in their Secretarial Audit Report.
The Report of the Secretarial Auditor is attached herewith as Annexure - B,
Extract of Annual Return
Extract of the Annual Return of the Company in form MGT-9 is attached herewith as Annexure - C,
Employees Stock Option Scheme
During the year under review, the Company has not granted any Options to the employees of the Company. Employees Stock Option Scheme (ESOS) has been approved and implemented by the Company and options were granted to the employees in accordance with the guidelines applicable to such ESOS.
The required disclosures in accordance with the Companies (Share Capital and Debentures) Rules, 2014 as on March 31, 2017 are as follows:
a. Options granted
b. Options vested
As per the Scheme, the vested options are exercisable any time during the duration of the Scheme.
c. Options exercised
d. Total number of shares arising out of the exercise of the options
e. Options lapsed
f. Exercise price
'''' 162 per Equity Share.
g. Variations of terms of options
h. Money realised by exercise of Options
i. Total number of options in force
j. Employee wise details of options granted to:-
(i) Key Managerial Personnel
(ii) Any other employee who receives a grant of options in any one year of option amounting to five per cent or more of options granted during that year
(iii) Identified employees who were granted option, during any one year equal to or exceeding one per cent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant
The Company has received a certificate from the Auditors of the Company that the ESOS Plan 2010 has been implemented in accordance with the SEBI Regulations and as per the resolution passed by the Members of the Company authorizing the issuance of the said options.
The other details as required under Listing Regulations are disclosed on the Company''''s website at www.reliancepower.co.in,
Particulars of Employees and related disclosures
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of limits set out in the said Rules are provided in Annexure to the Directors'''' Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the Shareholders of the Company and others entitled thereto, The said information is available for inspection at the Registered Office of the Company on all working days, except Saturdays between 11:00 A.M. and 1:00 P.M. up to the date of AGM and any member interested in obtaining the same may write to the Company Secretary. Upon such request the information shall be furnished,
Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure - D,
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars as required to be disclosed in terms of Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, are given in Annexure - E forming part of this Report.
The Company is strictly in adherence to the requirements of Corporate Governance both in terms of the provisions of the Act and the Listing Regulations. Its governance practices and policies are in keeping with the standards followed by companies of similar stature. The report on Corporate Governance as stipulated under Regulation 34(3) read with para C of Schedule V of the Listing Regulations is presented in a separate section forming part of this Annual Report,
A Certificate from the Auditors of the Company M/s. Price Waterhouse and M/s. Pathak H. D. & Associates, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Part E of Schedule V to the Listing Regulations is enclosed to this Report.
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concerns, if any, of the directors and employees. The details of the same have been stated in the Report on Corporate Governance and the policy can also be accessed on the Company''''s website,
The Company continues to have a Risk Management Committee consisting of majority of directors and senior managerial personnel. The details of the Committee and its terms of reference, etc. are set out in the Corporate Governance Report forming part of this Report.
The Company has a robust Business Risk Management framework to identify, evaluate business risks and opportunities,
This framework seeks to create transparency, minimize adverse impact on the business objectives and enhances Company''''s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The risks are assessed for each project and mitigation measures are initiated both at the project as well as the corporate level,
Compliance with provisions of Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company is committed to uphold and maintain the dignity of women employees and it has in place a policy which provides for protection against sexual harassment of women at work place and for prevention and redressal of such complaints. During the year under review no such complaints were received,
Corporate Social Responsibility
The Corporate Social Responsibility Committee of the Board performs its functions in accordance with the provisions of the Act. It has formulated a Corporate Social Responsibility Policy (CSR policy) indicating the activities to be undertaken by the Company. The CSR policy may be accessed on the Company''''s website at the link: http://www.reliancepower.co.in/pdf/CSR_ Policy.pdf.
The CSR Committee of the Board consisted of Dr. Yogendra Narain as Chairman, Shri Sateesh Seth, Dr. V. K. Chaturvedi, Shri
D. J. Kakalia and Smt. Rashna Khan, Directors as members as on March 31, 2017. Dr. Chaturvedi has ceased to be member of the committee with effect from April 13, 2017 being the date on which he has relinquished his office as a Director,
The disclosures with respect to CSR activities forming part of this report is given as Annexure - F,
Orders, if any, passed by regulators or courts or tribunals
No orders have been passed by the regulators or courts or tribunals which impact the going concern status and operations of the Company
Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls with reference to financial statements across the organization, The same is subject to review periodically by the Internal Audit Cell and by the Audit Committee for its effectiveness. The control measures adopted by the Company have been found to be effective and adequate to the Company''''s requirements,
Business Responsibility Report
Business Responsibility Report for the year under review as stipulated under Listing Regulations is presented in the separate section forming part of this Annual Report.
Your Directors express their sincere appreciation for the cooperation and assistance received from shareholders, debenture holders, debenture trustee, bankers, financial institutions, regulatory bodies and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff, resulting in the successful performance of the Company during the year,
For and on behalf of the Board of Directors
Anil Dhirubhai Ambani
Mumbai April 13, 2017