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India Power Corporation Ltd.

BSE: 532130 Sector: Infrastructure
NSE: DPSCLTD ISIN Code: INE360C01024
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India Power Corporation Ltd. (DPSCLTD) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the Ninety-Ninth Annual Report together with theAudited Financial Statements of your Company for the financial year ended 31st March2019.

FINANCIAL RESULTS

The Consolidated and Standalone financial performance of your Company is summarisedbelow:

( Rs. in lakhs)

Particulars Consolidated Standalone
Year ended 31st March 20191 Year ended 31st March 20182 Year ended 31st March 2019 Year ended 31st March 2018
Total income
59501.95 93030.11 56798.89 52077.59
[including Regulatory income/(expense)]
Total expenditure 55958.18 92226.18 54012.91 48614.46
Exceptional items 111.27 3749.38 - -
Share of Profit/(Loss) of Joint Venture (120.76) 87.53 - -
Profit before Tax 3534.28 4640.84 2785.98 3463.13
Less: Provision for Taxation
Current Tax 1019.34 1261.63 1006.00 1258.00
Deferred Tax (326.92) 129.81 (89.87) 70.69
Profit for the year from continuing operations 2841.86 3249.40 1869.85 2134.44
Profit/(loss) from discontinued operations (1218.87) (1240.85) - -
Profit for the year 1622.99 2008.55 1869.85 2134.44

1. Figures does not include figures for Meenakshi Energy Limited (refer toNote no 7.3 of Consolidated Financial Statements) hence not comparable to that extent

2. Comparitive figures have been rearranged on account of discontinuedoperations of India Power Corporation (Bodhgaya) Limited

REVIEW OF OPERATIONS AND STATE OF COMPANY'S AFFAIRS

Your Company has a diversified portfolio of renewable and conventional modes of powergeneration distribution transmission and operation & maintenance services. YourCompany has been in the distribution business for a Century and has one of the largestdistribution licenses across 618 sq. kms. in Asansol-Ranigunj area of West Bengal. YourCompany also has a burgeoning portfolio of conventional and renewable energy generation.As of 31st March 2019 your Company had a total generation capacity both renewable andconventional of around 1050 MW out of which around 37 MW is from green sources (Wind andSolar).

Your Company maintained its consistent operating performance during the year underreview. The total income (including Regulatory income/expense) was recorded at Rs.56798.89 Lakhs for the financial year ended 31st March 2019 in comparison to theprevious year figure of Rs. 52077.59 Lakhs. Your Company supplied 787.49 Million

Units of power in its license area in West Bengal and 102.94 Million Units of windpower in the States of Rajasthan Karnataka and Gujarat during the financial year ended31st March 2019 as against 705.16 Million Units and 121.83 Million Units respectively forthe previous year. The Profit after Tax for the financial year ended 31st March 2019 wasrecorded at Rs. 1869.85 Lakhs as compared to previous year's figure of Rs. 2134.44Lakhs.

India Uniper Power Services Private Limited is a Joint Venture of your Company withUniper Kraftwerke GmbH incorporated to provide a range of value added services whichincludes operation & maintenance services and asset management and optimisationservices for power generating assets both for new build and plants under operationwhether operated by thermal gas or renewable power.

Meenakshi Energy Limited ("MEL") an Independent Power Producer owns andoperates a 300 MW coal fired plant and also owns a 700 MW coal fired plant which is underadvanced stage of implementation in Nellore Andhra Pradesh.

IPCL Pte Limited a Wholly-owned Foreign Subsidiary of your Company was incorporated inthe Republic of Singapore to explore business development activities including exploringopportunities of brown field acquisitions. Your Company through IPCL Pte Limited hasduring the year under review partnered to implement the first 100

MW Solar Project in Albania a project launched by the Government of Albania todiversify energy resources in Albania and lead the way in turning Albania into a centre ofsolar power.

During the year under review the Distribution Franchisee Agreement ("DFA")awarded to India Power Corporation (Bodhgaya) Limited ["IPC(B)L"] a whollyowned subsidiary of your Company incorporated to undertake Distribution Franchiseebusiness in Gaya and the adjoining areas in the State of Bihar has been terminated by theBihar discom - South Bihar Power Distribution Company Limited. IPC(B)L has raised adispute relating to illegal termination of the DFA and various claims including damagesbefore the Arbitral Tribunal constituted in terms of the provisions of the DFA which iscurrently pending adjudication.

Detailed information on Company's operations state of its affairs and outlook areelaborated in the Management Discussion & Analysis Report as stipulated underRegulation 34(2) of SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 ("Listing Regulations") which is attached to this Report as Annexure I.

There is no material change and commitment affecting the financial position of yourCompany which have occurred after the end of the financial year till the date of thisReport other than those stated in this Report.

DIVIDEND

In terms of Regulation 43A of the Listing Regulations your Company has a DividendDistribution Policy approved and adopted by the Board of Directors which sets out theparameters and circumstances for declaration of dividend and utilization of retainedearnings. The Policy reflects the intent of your Company to reward its Members by sharinga portion of its profits after retaining sufficient funds for the business and growth ofyour Company. The Dividend Distribution Policy is available on your Company's website atthe link http://www.indiapower.com/ pdf/Dividend%20Distribution%20Policy.pdf.

In line with the Dividend Distribution Policy of your Company and considering yourCompany's performance and financial position during the year under review the Board ofDirectors are pleased to recommend a dividend of 5 (five) percent ( Rs. 0.05 per equityshare) for the financial year ended 31st March 2019 subject to approval of the Membersat the ensuing Annual General Meeting.

RESERVES

The amount carried to the reserves and surplus for the financial year 2018-19 are givenin the Standalone Financial Statements of your Company for the financial year ended 31stMarch 2019.

DEPOSITS

Your Company has not accepted any deposits within the ambit of Section 73 of theCompanies Act 2013 ("Act") and the Companies (Acceptance of Deposits) Rules2014 during the financial year 2018-19.

SHARE CAPITAL

In terms of the Scheme of Arrangement and Amalgamation of erstwhile India PowerCorporation Limited ("erstwhile IPCL") (CIN: U40101WB2003PLC097340) into andwith DPSC Limited (now known as India Power Corporation Limited) (CIN:L40105WB1919PLC003263) sanctioned by the Hon'ble High Court at Calcutta vide its orderdated 17th April 2013 ("Scheme") the Shareholders of erstwhile IPCL areentitled to be allotted 11 equity shares of Rs. 1 each of your Company for every 100equity shares of erstwhile IPCL held by them totaling to allotment of 1120275823 equityshares of Rs. 1 each ("consideration shares"). The existing holding of erstwhileIPCL in your Company i.e. 516132374 equity shares shall stand cancelled pursuant to theaforesaid Scheme and accordingly the paid-up equity share capital of your Company uponallotment of the consideration shares and cancellation as envisaged above will beincreased from Rs. 973789640 to Rs. 1577933089 comprising 1577933089 equityshares of Rs. 1 each. Cancellation and allotment of the aforesaid shares has not beengiven effect due to certain pending clearance(s)/approval(s) from the Stock Exchanges. Thepaid-up equity share capital of your Company shall undergo requisite change upon the saidcancellation and allotment.

SUBSIDIARIES AND ASSOCIATES

In line with Section 129(3) of the Act read with the Companies (Accounts) Rules 2014Listing Regulations and in accordance with Indian Accounting Standards ConsolidatedFinancial Statements prepared by your Company includes financial information of theSubsidiary and Associate Companies and their contribution to the overall performance ofyour Company during the year under review.

PL Sunrays Power Limited PL Solar Renewable Limited and PL Surya Vidyut Limited becameWholly-owned Subsidiaries of India Power Green Utility Private Limited a Wholly-ownedSubsidiary of your Company w.e.f. 1st June 2018 in terms of the provisions of the Act.Thereafter India Power Green Utility Private Limited and IPCL Power Trading PrivateLimited (now known as Saranyu Power Trading Private Limited) ceased to be Subsidiaries ofyour Company w.e.f. 17th September 2018. The Annual Accounts of these Subsidiarieshave thus been consolidated with the Annual Accounts of your Company upto 16th September2018.

Matsya Shipping and Ports Private Limited ceased to be an Associate and a Joint Ventureof your Company w.e.f. 26th February 2019 and the Annual Accounts of Matsya Shipping andPorts Private Limited has been consolidated with the Annual Accounts of your Company upto25th February 2019.

Your Company's investment of 3811506509 equity shares in MEL representing 92.75% ofMEL's equity shares which were fully pledged with SBICAP Trustee Company Limited onbehalf of the Lenders of MEL was invoked on 2nd May 2018. This matter and lenderinterchangeability is presently pending with the High Court of judicature at Hyderabad forthe State of Telangana and the State of Andhra Pradesh and is sub-judice. Based on yourCompany's holding of equity shares with differential voting rights in MEL and your Companychallenging the invocation of pledge MEL has been continued to be considered asSubsidiary of your Company. Pending outcome of the above judicial matters MEL being aSubsidiary its accounts not yet compiled and accordingly your Company has notconsolidated MEL's account with its Annual Accounts as per Indian Accounting Standard 110on accounting of Consolidated Financial Statements.

Pursuant to the provisions of Section 129(3) of the Act read with Rule 5 of theCompanies (Accounts) Rules 2014 the Statement in Form AOC-1 containing the salientfeatures of the Financial Statements of your Company's Subsidiaries and Associate formspart of the Financial Statements of your Company which is in addition to this Report.Further in terms of Rule 8 of the Companies (Accounts) Rules 2014 the report on thehighlights of the performance of each of the Subsidiary and Associate Companies also formspart of Form AOC-1.

Pursuant to the provisions of Section 136 of the Act copies of the Annual Accounts inrespect of each of the Subsidiaries would be available for inspection by a member or bythe trustee of the holder of any debenture at the Registered Office of your Company duringbusiness hours on all working days (excluding Saturday) between 11:00 a.m. to 1:00 p.m.upto the conclusion of the ensuing Annual

General Meeting. Further copies of the Annual Accounts of each of the Subsidiaries areavailable on your Company's website www.indiapower. com. Any member of the Company mayobtain copies of these documents by writing to the Company Secretary at the RegisteredOffice of your Company.

BOARD OF DIRECTORS

Your Company recognises that the Board of Directors forms one of the pillars of arobust Corporate Governance framework. Your Board comprises of an optimum combination ofExecutive and Non-Executive Directors including Independent Directors having diversifiedskill knowledge thought perspective regional and industry experience cultural andgeographical background age and ethnicity.

The Board of Directors of your Company have taken on record the declarations receivedfrom each of the Independent Directors confirming that they meet the criteria ofindependence prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of theListing Regulations and that they are not aware of any circumstances or situation whichexist or may be reasonably anticipated that could impair or impact their ability todischarge their duties with an objective independent judgement and without any externalinfluence after undertaking due assessment of veracity of the same.

The terms and conditions of appointment of Independent Directors are available on yourCompany's website at the link http://www.indiapower.com/pdf/Terms%20&%20Conditions%20of%20Appointment%20 of%20ID.pdf.

Details of the Directors of your Company as on 31st March 2019 and remuneration of theDirectors for the financial year 2018-19 are given in the extract of Annual Return in FormNo. MGT-9 annexed hereto and forming part of this Report. As per the declarations receivedby your Company none of the Directors on the Board of your Company as on 31st March 2019are disqualified to be appointed as a Director of your Company under the applicableprovisions of the Act and/or the Listing Regulations.

Appointment/re-appointment

In terms of Section 149(10) and other applicable provisions of the Act and Schedule IVto the Act read with the Rules framed thereunder and the Listing Regulations there-appointment of Mr. Amit Kiran Deb (DIN: 02107792) Mr. Nand Gopal Khaitan (DIN:00020588) Mr. Debi Prasad Patra (DIN: 00067269) and Mr. Tantra Narayan Thakur (DIN:00024322) Independent Directors of your Company for a second term of 5 (five)consecutive years w.e.f. 1st April 2019 was approved by the Members at the AnnualGeneral Meeting held on 22nd September 2018 based on the recommendation of the Nominationand Remuneration Committee and the Board of Directors.

Ms. Dipali Khanna (DIN: 03395440) Independent Director of your Company was appointedfor term of 5 (five) consecutive years w.e.f. 31st March 2015 to hold office till 30thMarch 2020. In terms of Section 149(10) and other applicable provisions of the Act andSchedule IV to the Act read with the Rules framed thereunder and the Listing Regulationsthe Board of Directors of your Company pursuant to the recommendation of the Nominationand Remuneration Committee and based on the report of performance evaluation at theirmeeting held on 23rd May 2019 decided to place the proposal for re-appointment ofMs. Dipali Khanna for a second term of 5 (five) consecutive years w.e.f. 31st March 2020at the ensuing Annual General Meeting whose period of office shall not be liable todetermination by retirement of Directors by rotation. Ms. Dipali Khanna has given herconsent to be re-appointed and have furnished necessary declarations to the Board ofDirectors that she meets the criteria of independence as provided under Section 149(6) ofthe Act and Regulation 16(1) of the Listing Regulations.

The Board of Directors of your Company recommends the above re-appointment. Appropriateresolution for her re-appointment is included in the Notice convening the ensuing AnnualGeneral Meeting for seeking approval of the Members. Brief resume and other particularsrelating to Ms. Dipali Khanna also forms part of the Notice convening the ensuing AnnualGeneral Meeting.

Director retiring by rotation

In accordance with the provisions of Section 152 of the Act read with the Companies(Appointment and Qualification of Directors) Rules 2014 and the Articles of Associationof your Company Mr. Hemant Kanoria (DIN: 00193015) retires by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment.

The Board of Directors of your Company recommends the above re-appointment. Appropriateresolution for his re-appointment is included in the Notice convening the ensuing AnnualGeneral Meeting for seeking approval of the Members. Brief resume and other particularsrelating to the Director proposed to be re-appointed also forms part of the Noticeconvening the ensuing Annual General Meeting.

Cessation

During the year under review Mr. Sunil Kanoria (DIN: 00421564) Non–ExecutiveDirector and Vice-Chairman Mr. S Sundareshan (DIN: 01675195) Independent Director andMr. Asok Kumar Goswami (DIN: 03331661) Whole-time Director of your Company resigned fromthe Board of Directors of your Company w.e.f. 8th October 2018 13th February 2019 and30th March 2019 respectively.

The Board of Directors of your Company has placed on records its sincere appreciationfor the guidance and support rendered by them during their association as Directors withyour Company.

KEY MANAGERIAL PERSONNEL

In terms of Section 203 of the Act the following are the Key Managerial Personnel ofyour Company as on 31st March 2019: i) Mr. Raghav Raj Kanoria Managing Director ii) Mr.Sanjeev Seth Chief Executive Officer iii) Mr. Amit Poddar Chief Financial Officer iv)Mr. Prashant Kapoor Company Secretary

During the year under review Mr. Sushil Kumar Agarwal Chief Financial Officerresigned from the services of your Company w.e.f. the close of business hours on 1stOctober 2018 and Mr. Amit Poddar was appointed as the Chief Financial Officer of yourCompany w.e.f. 5th February 2019. Mr. Asok Kumar Goswami Whole-time Director (DIN:03331661) and Key Managerial Personnel of your Company resigned from the Board ofDirectors w.e.f. 30th March 2019.

The details of the remuneration of the Key Managerial Personnel of your Company for thefinancial year 2018-19 are given in the extract of Annual Return in Form No. MGT-9 annexedhereto and forming part of this Report.

COMMITTEES OF THE BOARD

Your Company has 6 (six) Board level Committees viz. Audit Committee Nomination andRemuneration Committee Stakeholders Relationship Committee Corporate SocialResponsibility Committee Risk Management Committee and Committee of Directors set upunder the formal approval of the Board to carry out clearly defined roles andresponsibilities. The composition and brief terms of reference of the Committees are givenin the Report on Corporate Governance annexed hereto and forming part of this Report.

All observations recommendations and decision of the above Committees are placedbefore the Board of Directors for their consideration. During the year under review therehas been no instance where the Board has not accepted the recommendations of theCommittees.

BOARD AND COMMITTEE MEETINGS

During the financial year 2018-19 4 (four) meetings of the Board of Directors wereconvened and held on 29th May 2018 14th August 2018 12th November 2018 and 5thFebruary 2019. The maximum time gap between any two consecutive Board meetings did notexceed 120 (one hundred and twenty) days.

Additionally several Committee meetings were also held during the year under review.Detailed information of particulars of meetings held during the financial year 2018-19 andthe attendance of the Directors at such meetings are given in the Report on CorporateGovernance annexed hereto and forming part of this Report.

PERFORMANCE EVALUATION

Pursuant to the provisions of Section 134 read with Code of Independent Directors(Schedule IV to the Act) and Section 178 of the Act Listing Regulations and in line withthe Guidance Note on Board Evaluation issued by Securities and Exchange Board of India("SEBI") dated 5th January 2017 the Nomination and Remuneration Committeecarried out the annual evaluation of the performance of the Board the working of theCommittees of the Board and individual Directors (including Independent Directors and theChairman of your Company) for the financial year 2018-19.

The performance evaluation was carried out through a structured questionnaire seekingfeedback from the Directors on certain pre-defined parameters.

The performance evaluation of the Board was carried out on the basis of criteria suchas Board structure and composition Board culture and dynamics effectiveness of Boardprocesses information and functioning etc. The Committees of the Board were evaluated onparameters such as adequacy of Committee composition frequency and effectiveness ofCommittee meetings Committee dynamics etc.

The Nomination and Remuneration Committee reviewed the performance of individualDirectors (including Independent Directors) on parameters such as understanding theoperating and business environment contribution at the meetings guidance/support tomanagement application of independent judgement while taking decisions at the meetingsetc. and the performance of the Chairman of your Company on criteria such as efficientleadership professionalism impartiality safeguarding the interest of variousstakeholders etc.

The Nomination and Remuneration Committee expressed their satisfaction with the overallevaluation process.

Further in the separate meeting of Independent Directors held during the year underreview performance of non-Independent Directors performance of the Board and theperformance of the Chairman was evaluated and the quality quantity and timeliness of flowof information between the Company's Management and the Board was assessed.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Sections 134(3)(c) and 134(5) of the Act your Directors to the best oftheir knowledge and ability and according to the information and explanations obtained bythem state and confirm that:

a) in the preparation of the Annual Accounts for the financial year ended 31st March2019 the applicable Accounting Standards have been followed along with properexplanation relating to material departures;

b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of your Company as at 31st March 2019 and of the profit of yourCompany for the year ended on that date;

c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of your Company and for preventing and detecting fraud and other irregularities;

d) the Annual Accounts have been prepared on a going concern basis;

e) they have laid down internal financial controls to be followed by your Company andthat such internal financial controls are adequate and are operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

POLICIES AND PROCEDURES

Policies and Procedures are an essential component of your Company's CorporateGovernance framework which outlines the organisational and operational structure. In linewith this approach and in terms of the provisions of the Act and Listing Regulations yourCompany has framed various Policies and Procedures duly approved and adopted by the Boardof Directors. Your Company reviews its Policies and Procedures in view of the changingbusiness environment and regulatory frameworks.

Nomination & Remuneration Policy

In terms of Section 178(3) of the Act and Regulation 19 of the Listing Regulationsyour Company has in place a Nomination

& Remuneration Policy which broadly lays down the guiding principles proceduresand basis for selection and appointment of Directors Key Managerial Personnel and SeniorManagement Personnel including criteria for determining qualification positiveattributes independence of a Director and payment of Remuneration to Directors KeyManagerial Personnel Senior Management Personnel and other Employees.

During the year under review the Board of Directors of your Company based on therecommendation of the Nomination

& Remuneration Committee reviewed and adopted a revised Nomination andRemuneration Policy to align the Policy with the various amendments in the Act and theListing Regulations. The amended Nomination & Remuneration Policy of your Company isattached to this Report as Annexure II and is also available on your Company'swebsite at the link https://www.indiapower.com/pdf/ IPCL Rs. Nomination Rs. and Rs.Remuneration Rs. Policy.pdf.

Corporate Social Responsibility

The primary purpose of your Company's Corporate Social Responsibility ("CSR")philosophy is to make a meaningful and measureable impact on the lives of theeconomically physically and socially challenged communities through an integratedapproach of development. Your Company aims to continuously foster inclusive growth and avalue based empowered society.

Community development interventions undertaken in previous years continued with furthervigour and widening of portfolio of projects during the financial year 2018-19 whichfocused on creating sustainable livelihood empowering women promoting education andskill development promoting environmental sustainability and rural development andsupporting health & sanitation initiatives.

The details of the CSR initiatives and projects undertaken by your Company during thefinancial year 2018-19 are outlined in the Annual Report on CSR activities which isattached to this Report as Annexure III.

In terms of Section 135 of the Act the Board of Directors of your Company based on therecommendation of the CSR Committee has approved and adopted a revised CSR Policy of yourCompany to align the Policy with the various amendments in the Act. The said policy isavailable on your Company's website at the linkhttps://www.indiapower.com/pdf/Corporate%20Social%20 Responsibility%20Policy.pdf.

Risk Management

Your Company recognises that risk is an inherent part of its business which cannot beeliminated in its entirety. Risk has to be managed in a manner such that the potentialrange of outcomes is within acceptable boundaries. The management of your Company believesthat a pro-active approach in identifying analyzing managing evaluating resolving andreporting risks associated with the business is the key to sustained operations therebyprotecting Shareholders' value improving governance process and achieving strategicobjectives.

The Risk Management Policy of your Company defines how risks associated with yourCompany will be identified analyzed and managed. It outlines how Risk Managementactivities will be performed and monitored by your Company and practices for recording andprioritizing risks.

The Board of Directors of your Company based on the recommendation of the RiskManagement Committee has approved and adopted a revised Risk Management Policy of yourCompany with an objective to establish a systematic and disciplined approach to RiskManagement and provide a more structured framework to identify various elements of riskthat may threaten the existence of your Company.

The Risk Management Committee is responsible to frame implement monitor and reviewthe Risk Management Plan of your Company and to lay down risk assessment and minimizationprocedures. The Risk Management Committee periodically reviews the major risks identifiedand finalises the mitigation plans. The identified major risk areas are also covered inthe Internal Audit Report placed before the Audit Committee of your Company.

The details of various risks identified and assessed by your Company and theirmitigation plans are also explained in the Management Discussion & Analysis Reportannexed hereto and forming part of this Report.

Internal Control Systems and their Adequacy

Your Company has proper and adequate Internal Control Systems commensurate with thenature of its business and the size scale and complexity of its operations. The InternalAudit Department continuously monitors the effectiveness and adequacy of Internal ControlSystem in your Company its compliance with the operating systems accounting proceduresand policies of your Company and suggests improvements. To maintain its objectivity andindependence the Internal Auditors presents a detailed report to the Audit Committee on aquarterly basis highlighting therein significant deviations if any. The Audit Committeereviews these reports with the management and suggests improvements and correctivemeasures thereon. Based on the report of Internal Audit corrective actions are undertakenin the respective areas thereby strengthening and maintaining a healthy Internal ControlSystem.

Vigil Mechanism for Directors and Employees

In terms of Section 177(9) of the Act and Regulation 22 of the Listing Regulations theBoard of Directors of your Company framed and adopted a revised Vigil Mechanism/WhistleBlower Policy to align the Policy with the various amendments in the Act ListingRegulations and SEBI (Prohibition of Insider Trading) Regulations 2015 and to strengthenthe Whistle Blowing Mechanism within your Company and to provide avenues to the Directorsand Employees to escalate genuine concerns impacting and compromising with the interest ofyour Company and its stakeholders in any way.

The Policy provides for a detailed complaint and investigation process with provisionsfor direct access to the Chairman of the Audit Committee for redressal. Requisitesafeguards against victimization or unfair treatment of Directors and Employees who availthe mechanism is also provided. The functioning of the Vigil Mechanism/ Whistle BlowerPolicy is reviewed by the Audit Committee.

Your Company hereby affirms that no complaint under the Policy was received during theyear under review and that no person was denied access to the Chairman of the AuditCommittee. The Vigil Mechanism/Whistle Blower Policy is available on your Company'swebsite at the link https://www.indiapower.com/pdf/WHISTHLE%20BLOWER%20VIGIL%20MECHANISM.pdf.

Prevention Prohibition and Redressal of Sexual Harassment of Women atthe Workplace

Your Company remains committed to provide and promote a healthy culture and congenialworking environment for all its Employees.

Your Company in order to foster a positive workplace environment free from harassmentof any nature and in terms of the provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and Rules framed thereunderhas in place a Policy on Prevention of Sexual Harassment. As a part of the Policy anInternal Complaints Committee has been set up in compliance with the provisions of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013to redress complaints if any received regarding sexual harassment. The Policy isavailable on your Company's website at the link https://www.indiapower.com/pdf/PreventionRs. of Rs. Sexual Rs. Harrasment.pdf.

During the year under review no complaint pertaining to sexual harassment was receivedby your Company.

AUDITORS AND AUDITOR'S REPORT

Statutory Auditors

M/s. S S Kothari Mehta & Co. Chartered Accountants (Firm Registration No. 000756N)was appointed as the Statutory Auditors of your Company at the 97th Annual GeneralMeeting held on 12th August 2017 to hold office for a period of 5 (five) consecutiveyears from the conclusion of the 97th Annual General Meeting till the conclusion of the102nd Annual General Meeting of your Company to be held in the year 2022.

In accordance with the Companies (Amendment) Act 2017 enforced on 7th May 2018 bythe Ministry of Corporate Affairs the appointment of Statutory Auditors is not requiredto be ratified at every Annual General Meeting.

The Reports given by the Auditors on the Standalone and Consolidated FinancialStatements of your Company for the year ended 31st March 2019 forms part of the AnnualReport.

There is no qualification reservation adverse remark or disclaimer given by theAuditors in their Report on the Standalone Financial Statements of your Company for theyear ended 31st March 2019. The Auditors' Report on the Consolidated Financial Statementsof your Company for the year ended 31st March 2019 contains a qualification with regardto non-consolidation of accounts of MEL a Subsidiary of your Company. Your Company'sinvestment of 3811506509 equity shares in MEL representing 92.75% of MEL's equityshares which were fully pledged with SBICAP Trustee Company Limited on behalf of theLenders of MEL was invoked on 2nd May 2018. This matter and lender interchangeability ispresently pending with the High Court of judicature at Hyderabad for the State ofTelangana and the State of Andhra Pradesh and is sub-judice. Based on your Company'sholding of equity shares with differential voting rights in MEL and your Companychallenging the invocation of pledge MEL has been continued to be considered asSubsidiary of your Company. Pending outcome of the above judicial matters MEL being aSubsidiary its accounts not yet compiled and accordingly your Company has notconsolidated MEL's account with its financials as per Indian Accounting Standard 110 onaccounting of Consolidated Financial Statements.

The emphasis of matter given in the Auditors' Report on the Standalone and ConsolidatedFinancial Statements read with Note no. 9.2 of the Standalone and Consolidated FinancialStatements are self-explanatory.

The Statutory Auditors of your Company have not reported any incident of fraud to theAudit Committee of your Company in terms of provisions of Section 143(12) of the Act.

Cost Auditors

Pursuant to Section 148(2) of the Act read with the Companies (Cost Records and Audit)Rules 2014 your Company is required to maintain cost records and get its cost recordsaudited by a Cost Accountant and accordingly such accounts and records are maintained byyour Company. The Board of Directors of your Company at its meeting held on 23rd May2019 based on the recommendation of the Audit Committee approved the re-appointment ofM/s. Mani & Co. Cost Accountants (Firm Registration No. 000004) as the Cost Auditorsto conduct the audit of the cost records of your Company for the financial year ended 31stMarch 2020.

Internal Auditors

Protiviti India Member Private Limited has been appointed as the Internal Auditors ofyour Company for the financial year ended 31st March 2020 pursuant to Section 138(1) ofthe Act to conduct the internal audit of the functions and activities of your Company. TheInternal Auditors report to the Audit Committee. The Internal Audit Report is placed atthe meetings of Audit Committee for their review.

Secretarial Auditors

Pursuant to Section 204 of the Act read with Rules framed thereunder and Regulation 24Aof the Listing Regulations M/s. H. M. Choraria & Co. a firm of Company Secretariesin Practice (Certificate of Practice No. 1499) has been appointed to undertake thesecretarial audit of your Company for the financial year 2018-19. The Secretarial AuditReport is attached to this Report as Annexure IV.

The Secretarial Auditors have made certain observations in the Secretarial Audit Reportwith respect to non-compliance of Minimum Public Shareholding ("MPS")requirement as prescribed by SEBI non-consolidation of accounts of MEL and on West BengalElectricity Regulatory Commission ("WBERC") matter.

With regard to the non-compliance of MPS requirement the Whole Time Member SEBI haspassed an ex-parte Interim Order No. WTM/PS/08/CFD/JUNE/2013 dated 4th June 2013directing your Company to comply with the MPS requirement. In terms of the Scheme 24.69%of the equity share capital of your Company comprising 240428662 equity shares of Rs. 1each was transferred by erstwhile IPCL to an independent irrevocable Trust named PowerTrust having independent Board of Trustees which constituted members of Public in terms ofthe provisions of the Scheme and accordingly erstwhile IPCL's shareholding in your Companyreduced from 93% to 68.31% and public shareholding increased from 7% to 31.69%.

SEBI thereafter in December 2013 made an application before the Hon'ble High Court atCalcutta seeking amendment to clause 3.3.3 of the Scheme which stated that Power Trustshall constitute members of the Public. In this regard the Hon'ble High Court at Calcuttavide its Order dated 27th January 2017 directed Power Trust to sell 326316563 equityshares to Public through Offer for Sale by 30th April 2017 which period was subsequentlyextended by the Hon'ble High Court to 31st December 2017 with a further grace period ofupto the end of February 2018 vide its Order dated 25th August 2017. During the periodPower Trust floated five Offer for Sale wherein in aggregate 2263166 equity shares weresold. Thereafter Power Trust filed an application before the High Court seeking extensionof time to sell the balance shares held by it to the Public and permission to off loadand/or sell balance shares by using any and/or all methods or any combination of methodsas prescribed by SEBI including two methods additionally provided under SEBI's circulardated 22nd February 2018. The Hon'ble High Court at Calcutta vide its Order dated 18thMay 2018 has directed to dispose of the balance shares expeditiously by using any and allmethods and/or combinations thereof as prescribed by the relevant statutory provisionsincluding the two methods additionally provided under SEBI's circular dated 22nd February2018 subject to such caps and limits as provided by the SEBI Regulations. In terms of theaforesaid Order dated 18th May 2018 Power Trust floated one Offer for Sale wherein17513 equity shares were sold.

The Independent Directors on the Board of your Company filed a suo-moto appeals beforeSecurities Appellate Tribunal Mumbai ("SAT") against the restrictions imposedon them by the SEBI's ex-parte Interim Order dated 4th June 2013 passed by the Whole TimeMember. SAT after hearing the said application vide its Order dated 3rd April 2019amongst other observations stated that they are of the opinion that the Whole Time MemberSEBI has misinterpreted the Orders of the Calcutta High Court and has committed an errorin holding that your Company and its Directors had not complied with the MPS requirement.SAT in their said Order also noted that since SEBI approached the Calcutta High Court formodification of the Scheme it was no longer available to SEBI to restrain the Directorsfor non compliance of the MPS requirement. SAT thereafter vide its Order dated 3rd April2019 held that the impugned ex-parte Interim Order dated 4th June 2013 passed by theWhole Time Member SEBI cannot be sustained and is quashed.

With regards to the observation regarding non-consolidation of accounts of aSubsidiary the same has been detailed under the section "Statutory Auditors"under "Auditors and Auditor's Report" in this Report.

In relation to the WBERC matter WBERC vide its Order dated 7th July 2014 in itssuo-moto proceedings against your Company in respect of the Scheme has held that the saidarrangement needs prior approval of WBERC under Section 17(4) of the Electricity Act 2003and in absence of such prior approval WBERC has held the Scheme as void as a licensee.The said Order was challenged by your Company before the Hon'ble High Court at Calcuttaand the single member bench of Hon'ble High Court at Calcutta quashed the said Order dated7th July 2014 by allowing the Writ Application. WBERC has preferred an appeal against theOrder of the single member bench before the division bench of the Hon'ble High Court atCalcutta. The disposal of the matter is currently pending.

CORPORATE GOVERNANCE

Pursuant to Regulation 34 of the Listing Regulations the Report on CorporateGovernance along with Certificate from the Statutory Auditors of your Company conformingcompliance with the conditions of Corporate Governance is attached to this Report as AnnexureV.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts or arrangements entered by your Company with the Related Parties duringthe financial year under review were in the ordinary course of business and on an arm'slength basis and in accordance with the provisions of the Act the Listing Regulations andthe Related Party Transaction Policy of your Company.

All Related Party Transactions entered into by your Company are placed before the AuditCommittee for approval. Prior omnibus approval of the Audit Committee is obtained forRelated Party Transactions which are repetitive in nature and/or entered in the ordinarycourse of business and on an arm's length basis. All Related Party Transactions arereviewed by the Audit Committee on a quarterly basis.

During the financial year 2018–19 the Board of Directors based on therecommendation of the Audit Committee approved and adopted a revised Related PartyTransaction Policy with an intend to ensure that proper reporting approval and disclosureprocesses are in place for all transactions between your Company and Related Parties. ThisPolicy specifically deals with the review and approval of Related Party Transactionskeeping in mind the potential or actual conflicts of interest that may arise because ofentering into these transactions. The Policy on dealing with Related Party Transactionsapproved and adopted by the Board of Directors is available on your Company's website atthe link https://www.indiapower.com/pdf/Related%20Party%20 Transactions%20Policy.pdf.

The details of contract/arrangement/transaction entered by your Company with RelatedParties during the financial year 2018–19 are set out in the Notes to the FinancialStatements for the year ended 31st March 2019. The disclosure ofcontract/arrangement/transaction entered into with Related Parties which could beconsidered material under the purview of Section 188(1) of the Act in Form AOC-2 isattached to this Report as Annexure VI.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Your Company being engaged in the business of providing infrastructure facilities theloans made guarantees given or security provided and the investments/acquisitions made byyour Company by way of subscription purchase or otherwise in the securities of any otherbody corporate are exempt from the applicability of provisions of Section 186 of the Act.

PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO

The statement containing the information relating to conservation of energy technologyabsorption foreign exchange earnings and outgo in accordance with Section 134(3)(m) ofthe Act read with Rule 8 of the Companies (Accounts) Rules 2014 is attached to thisReport as

Annexure VII.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS /TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND YOUR COMPANY'S OPERATIONS IN FUTURE

There are no significant and material orders passed by the Regulators / Courts /Tribunals impacting the going concern status of your Company and its future operations.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The statement containing the information to be disclosed in terms of Section 197(12) ofthe Act read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are attached to this Report as Annexure VIII & Annexure IX.

COMPLIANCES WITH APPLICABLE SECRETARIAL STANDARDS

The Company has proper systems in place to ensure compliance with the provisions of allapplicable Secretarial Standards issued by The Institute of Company Secretaries of Indiawhich have mandatory application and the systems are adequate and operating effectively.

BUSINESS RESPONSIBILITY REPORT

Since your Company does not fall under the top 500 (five hundred) listed entitiesbased on market capitalization as on 31st March 2019 Business Responsibility Report interms of Regulation 34(2)(f) of the Listing Regulations is not applicable to your Company.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return as on the financial year ended 31st March 2019 in FormNo. MGT-9 as required under Sections 92(3) and 134(3) of the Act read with Rule 12 of theCompanies (Management and Administration) Rules 2014 is attached to this Report as AnnexureX and is also available on your Company's website at the link https://www.indiapower.com/pdf/Annual%20Return18 Rs. 19.pdf.

DELISTING

During the year under review your Company has voluntarily delisted its equity sharesin terms of the provisions of SEBI (Delisting of Equity Shares) Regulations 2009 from TheCalcutta Stock Exchange Limited with effect from 14th August 2018.

The equity shares of your Company are presently listed on National Stock Exchange ofIndia Limited and Metropolitan Stock Exchange of India Limited Recognised Stock Exchangeshaving nationwide trading terminals.

OTHER DISCLOSURES / REPORTING

Your Directors state that no disclosure or reporting is required in respect of thefollowing as there were no transactions done on these items during the year under review:

• Issue of equity shares with differential rights as to dividend voting orotherwise.

• Issue of sweat equity shares.

• Your Company does not have any scheme of provision of money for the purchase ofits own shares by employees or by trustees for the benefit of employees.

• Neither the Managing Director nor the Whole-time Director of your Companyreceived any remuneration or commissions from any Subsidiary Company.

• There was no revision in the Financial Statements or the Report of the Board ofDirectors of your Company.

• There was no change in the nature of business.

ACKNOWLEDGEMENT

Your Directors would like to express their grateful appreciation for the co-operationand assistance extended to your Company by the Ministry of Power West Bengal ElectricityRegulatory Commission Central Electricity Regulatory Commission various Ministries ofthe Central and State Governments particularly the Power Departments State DiscomsCentral and State Transmission Companies West Bengal Green Energy Development CorporationLimited Damodar Valley Corporation Power Exchanges Contractors Fuel SuppliersDepartment of Public Enterprises SEBI Stock Exchanges Ministry of Corporate Affairs andother concerned Government departments/ agencies.

The Board also conveys its gratitude to the valuable Stakeholders of your Company viz.the Shareholders Debenture holders Bankers Credit Rating Agencies and other businessassociates for their continued trust and excellent support and the Consumers for theirunwavering patronage. The Board also places on record their appreciation for the unstintedefforts and contributions made by the Employees of your Company.

For and on behalf of the Board of Directors
Hemant Kanoria
Place: Kolkata Chairman
Date: 23rd May 2019 DIN: 00193015

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