The Directors of your Company are pleased to present the Twenty SecondAnnual Report on the business and operations of the Company together with the AuditedFinancial Statements (Standalone and Consolidated) for the Financial Year ended 31stMarch 2017.
1. FINANCIAL HIGHLIGHTS
The Financial Performance of the Company (Standalone) for the yearended 31st March 2017 is summarized below:
(Rs in Crore)
| ||Current Year ended ||Previous Year ended |
| ||31.03.2017 ||31.03.2016 |
|Net Revenue ||2815.10 ||3916.79 |
|Add: Other operating income ||13.00 ||11.87 |
|Add: Other Income ||87.62 ||127.64 |
|Total Income ||2915.72 ||4056.30 |
|Profit before Interest || || |
|Depreciation Exceptional ||1041.67 ||2481.53 |
|items & Taxation || || |
|Less : Finance Cost ||1779.00 ||2341.61 |
|Less : Depreciation ||486.84 ||566.08 |
|Less: Exceptional items (Net) ||0.00 ||47.40 |
|Profit before Tax/(Loss) ||(1224.17) ||(473.56) |
|Add: Deferred Tax reversal ||463.56 ||241.76 |
|Profit after Tax/(Loss) ||(760.61) ||(231.80) |
|Add : Other Comprehensive ||0.43 ||(0.80) |
|Income || || |
|Total Comprehensive Income ||(760.18) ||(231.00) |
Ministry of Corporate Affairs vide Notification dated 16th
February 2015 has issued Companies (Indian Accounting Standards)Rules 2015 according to which certain class of companies which inter-alia include alllisted companies whose accounting period begins on or after 1st April 2016 are requiredto comply with Indian Accounting Standards (Ind AS). Accordingly Standalone andConsolidated Financial Statements of the Company for the Financial Year 2016-17 have beenprepared as per Ind AS.
2. CoMPANY'S PLANTS AND oPERATIoNS
Your Company has power generation capacity of 2220 MW comprising ofone Hydro Power Plant and two Thermal Power Plants namely: i) 400 MW Jaypee VishnuprayagHydro Power Plant in Uttarakhand; ii) 500 MW Phase I (of 1200 MW) Jaypee BinaThermal Power Plant in Madhya Pradesh; and iii) 1320 MW Jaypee Nigrie SupercriticalThermal Power Plant in Nigrie Distt. Singrauli Madhya Pradesh. Further your Companyalso has Amelia (North) Coal Mine in Distt. Singrauli Madhya Pradesh which was allottedin e-auction. Entire coal produced by the said coal mine is being utilized for powergeneration at 1320 MW Jaypee Nigrie Supercritical Thermal Power Plant.
Besides the above your Company also has a cement grinding facilityJaypee Nigrie Cement Grinding Unit' at Nigrie (M.P.) with a capacity of 2 MTPAwhich commenced its operations w.e.f. 3rd June 2015.
The Plant availability Plant load factor and net saleable energygeneration of Hydro Power Plant and Thermal Power Plants for the Financial Year 2016-17were as under:
|Plant ||Plant Availability (%) ||Plant Load Factor (%) ||Net Saleable Energy Generation (M U) |
|Jaypee ||99.02 ||58.28 ||1770.20 |
|Vishnuprayag || || || |
|Hydro Power Plant || || || |
|(400 MW) || || || |
|Jaypee Bina ||87.75 ||18.56 ||741.31 |
|Thermal Power || || || |
|Plant || || || |
|[500 MW - Phase I || || || |
|(of 1200 MW)] || || || |
|Jaypee Nigrie ||88.11 ||62.85 ||6833.18 |
|Supercritical || || || |
|Thermal Power || || || |
|Plant (1320 MW) || || || |
The saleable energy generation for the year has been 9344.69 MUs ascompared to 10978.98 MUs during previous year i.e. lower by 1634.29 MUs as theCompany's Baspa-II and Karcham Wangtoo HEP have been transferred to Himachal BaspaPower Corporation Limited (HBPCL) w.e.f 01.09.2015 as per Scheme of Arrangement sanctionedby Honb'le High Court of Himachal Pradesh and further JSW Energy Limited has acquiredthe holding of JPVL in HBPCL. The saleable energy generation for the year when compared toprevious year if Baspa-II and Karcham Wangtoo HEP generation was not there in theprevious year could have been 7252.23 MUs. As such on comparable basis the generationthis year was higher by 2092.46 MUs. The performance of various projects/ plants inoperation is given as under:-2.1 400 MW Jaypee Vishnuprayag Hydro Power Plant
The performance of Vishnuprayag Hydro Power Plant during the FinancialYear 2016-17 has been very good. Actual energy generated during the year was more than theDesign Energy. The total generation of energy during the Financial Year 2016-17 was2042.01 MUs and net saleable energy was 1770.20 MUs as against generation of 1048.29 MUsduring the previous year. The generation last year was lower as the plant was not inoperations from 25th June 2015 to
10th September 2015 due to floods in river Alakhnanda and further shutdown of plant from 20th February 2016 to 11th March 2016 as per instructions of UPPCLfor maintenance of transmission towers / lines. However the sales had been billed fordeemed generations (designed energy) of 603 MUs as per terms of PPA.
2.2 500 MW (Phase I of 1200 MW) Jaypee Bina Thermal Power Plant
The energy generation of Bina Thermal Power Plant (2X250 MW) was 741.31MUs during the year 2016-17 as compared to 1208.78 MUs during the previous year. Thus thegeneration was lower by 467.47 MUs due to shut down of Unit 1 and Unit 2 as per the backdown instructions from SLDC from time to time because of lower demand of power in theState.
The Plant supplies 70% of the installed capacity on long-term basis toGovt. of Madhya Pradesh/Madhya Pradesh Power Management Company Ltd. (MPPMCL) in terms ofthe Power Purchase Agreements executed with them and balance of installed capacity is tobe sold as merchant power.
MPPMCL had initially restricted offtake to 70%/60% of the contractedcapacity from all the power producer(s) in Madhya Pradesh upto August 2016. FromSeptember 2016 onwards MPPMCL is not adhering to the above restriction of 70%/60% of thecontracted capacity and is giving dispatch schedule of 4-5 hours only or a schedule ofvery low off take which is technically not feasible requiring Company to sell balancepower to power exchanges at their prevailing prices.
Based on Tariff Petition filed by the Company MPERC has approvedProject Cost vide its order dated 26th November 2014/ Revised Order dated 8th May 2015at Rs 3471.73 crore. This Project Cost was marginally revised to Rs 3484.12 crore in TrueUp order dated June 03 2016 for the Fin. Year 2014-15. Multi Year Tariff Order (MYT) forFinancial Year 2016-19 was issued on August 08 2016 (based on Revised Project Cost of
Rs 3484.12 crore).
2.3 1320 MW Jaypee Nigrie Supercritical Thermal Power Plant (JNSTPP)
Both units of 660 MW each of JNSTPP are under Commercial Operations.The energy generation of the Plant was 6833.18 MUs during the year 2016-17 as compared to4995.16 MUs in the previous year which was higher by 1838.02 MUs due to increase inmerchant power sales.
Since company has acquired coal mine at Amelia (North) throughe-auction conducted by Government of India for meeting part of the coal requirement ofJNSTPP and the Coal mine allocation condition requires that 85% of Amelia Coal shall beused for sales by PPA(s) to DISCOMS company targeted to achieve a PLF of about 75% duringthe Financial Year. However the company could achieve a PLF of 62.85% only. The Plant haslong term PPAs for 37.5% (Including 7.5% on variable cost) with MPPMCL. Energy was alsosold on merchant power basis through bilateral arrangements and through Indian EnergyExchange & Power Exchange of India Limited. The Company had participated in a Bid ofUPPCL for supply of 450 MW and emerged L1. However UPPCL has since decided to annul theaforesaid bid process.
Company has filed final tariff petition based on audited accounts forthe F.Y 2014-15 and computation of final cost estimated at Rs 12400 crore [inclusive ofinvestment for Amelia (North) Coal Mine]. The Cost of the project has gone up mainly onaccount of increased Interest during Construction period due to delay in commissioning ofTransmission Lines and Railway Sidings increased fuel cost for testing and investment foracquisition of Amelia (North) Coal Mine in the auctions by Ministry of Coal Govt. ofIndia. Motion hearing was held on 19th January 2016 and related replies have beensubmitted before MPERC. Public hearing as required under
MPERC Guidelines was held on 26.04.2016. The final Tariff
Order for the period upto 31/03/2015 has been passed by MPERC on24.05.2017. The Tariff for 2015-16 has also been allowed on provisional basis on the Capexas on 31.03.2015. In the said Order capex on account of delay in COD has been reduced byRs 400 Cr apprx. and grossing up of RoE by MAT has also not been allowed. The Company isin the process of filing review petition with MPERC/APTEL for the same.
2.4 Amelia (North) Coal Mine Block
The Coal production from the mine started on 26th May 2015. Peak ratedcapacity of the plant is 2.8 MTPA. The coal production during the financial year 2016-17was 2799887
Tonne as against the capacity of 2800000 TPA. 2.5 Jaypee NigrieCement Grinding Unit at Nigrie
2 MTPA Jaypee Nigrie Cement Grinding Unit at Nigrie Distt. Singrauliin Madhya Pradesh started commercial operations w.e.f. 3rd June 2015. An expenditure ofRs 300 crore (approx.) had been incurred till 31st March 2017. The plant recorded cementproduction of 2422 MT with a total revenue of
Rs 13.48 crore. The sales during 2016-17 were lower due tonon-availability of clinker. The company has signed an agreement with Orient CementLimited (OCL) for sale of this Grinding Unit as a going concern on 31st May 2017.
The total income from operations for the year ended 31st March 2017has declined to Rs 2828.10 crore from Rs 3928.66 crore last year as there have been norevenue in respect of Baspa-II and Karcham Wangtoo HEPs during the year 2016-17 as thesePlants have been transferred to HBPCL w.e.f 01.09.2015 as per Scheme of Arrangementsanctioned by Honb'le High Court of Himachal Pradesh at Shimla vide order dated25.06.2015 becoming effective w.e.f. 1st September 2015. Thereafter the entiresecurities (Equity Shares and Non-convertible Debentures) issued by HBPCL to the Companyin terms of Scheme of Arrangement were transferred and sold to JSW Energy Limited at anenterprise value of Rs 9700 crore subject to mutually agreed adjustments which resultedin reduction of debt and interest outgo for the Company. Further other income of Rs 87.62crore was lower as compared to Rs 127.64 crore during the previous year mainly on accountof receipt of insurance claim of Rs 53.02 crore in respect of Vishnuprayag HEP during theprevious year.
The operation resulted in Loss of Rs 760.18 crore for the year 2016-17as compared to Rs 231.00 crore in the previous year. The increase in losses was mainly onaccount of following:- i) Financial Operations for the year ended 31.03.2016 includedprofit of Baspa-II HEP Rs( 123.14 crore)
& Karcham Wangtoo HEP (Rs 475.99 crore) up to 31.08.2015 whichwere not available in the current year due to transfer of Plants to HBPCL/ JSW. ii) Lowerprofit in Bina TPP in the current year as compared to previous year due to lower energygeneration because of frequent back down instructions and despatch schedule for lesserhours by SLDC leading to operations becoming un-economical. iii) Loss suffered by NigrieSTPP mainly due to restricted generation on account of non availability of long Term PPAsnon availability of corridor for tied up power and also lower merchant power rates. iv) Asper revised tariff norms adopted by MPERC for the FY 2016-17 to FY 2018-19 Annual FixedCharges (AFC) have been capped at Normative Availability (85%) and the incentive earlierpayable on availability beyond Normative Availability have been done away with. This hasadversely affected both Bina TPP and Nigrie STPP. Though income from operations onconsolidated basis for the year ended 31st March 2017 had increased to Rs 4693.93 croreas compared to Rs 4158.25 crore in the previous year ended 31st March 2016 howevertotal Loss on the consolidated basis for the year ended 31st March 2017 was at
Rs 1293.88 crore as compared to total Loss on the consolidated basis ofRs 242.54 crore for the year ended 31st March 2016. The main reason for higher loss wasdue to loss of Rs 546.06 crore (Previous year Rs 45.63 crore) in respect of a subsidiarycompany viz. Prayagraj Power Generation Company Limited.
Due to losses suffered by the Company in the current year no dividendwas recommended by the Board.
5. TRANSFER To RESERVES
No amount is proposed to be transferred to reserves.
6. SHIFTING oF REGISTERED oFFICE oF THE CoMPANY
The Registered Office of the Company was shifted from the State ofHimachal Pradesh to State of Madhya Pradesh and after approval dated 2nd December 2015 ofRegional Director (Northern Region Bench) Ministry of Corporate Affairs
(MCA) necessary form was filed with MCA. The Registrar of CompaniesM.P. after registering the documents vide letter dated 21.03.2017 has since allotted newCorporate
Identification Number (CIN) to the Company.
7. SHARE CAPITAL
The paid up Equity Share Capital of the Company as on 31st March 2016was Rs 2938 crore. During the year 2016-17 upon implementation of Strategic DebtRestructuring Scheme (SDR) 23 Lenders have converted part of their outstanding debtaggregating to Rs 3058 crore into Equity Shares of Rs 10 each at a price of Rs 10 pershares. After obtaining approval of Stock exchanges the Stake holders' Committee atits meeting held on 18th February 2017 had allotted 305.80 crore Equity Shares of Rs 10/-each to the lenders . Thus out of total paid-up Equity Share Capital of Rs 5996 croredivided into 599.60 crore Equity Shares of Rs 10/- each 51% of the post-issue expandedpaid-up Equity Share Capital of the Company is held by Banks and Financial Institutions.
Your Company has not issued any :
shares with differential rights sweat equity shares
equity shares under Employees Stock Option Scheme
8. US$ 200 MILLIoN FCCBs
The Company issued Foreign Currency Convertible Bonds during theFinancial Year 2009-10 for US $ 200 Million. The Company has partially redeemed FCCBsalong with premium due thereon upto 13th February 2015 and also paid interest upto 13thFebruary 2016. As on date the principal amount of outstanding FCCBs is US$ 101.42million. The Company entered into a Standstill Agreement on 11th February 2016 whereinthe standstill period was extended until 31st March 2016. Pursuant to discussions withthe Bondholders the Company and certain Bondholders holding 75.76% of the principalamount of the FCCBs had further entered into a Standstill Agreement pursuant to whichparticipating Bondholders had agreed to standstill' upto 15th May 2017subject to certain conditions which also included remittance to them an amount equivalentto Rs150 crores from the part proceeds of liquidity events of Sale of 2 MTPA Nigrie CementGrinding Unit and/or sale of entire shareholding of Sangam Power Generation CompanyLimited (SPGCL) to UPPCL/ UPRVUNL.
The Reserve Bank of India vide its letter dated 26th April 2017approved the proposal subject to the consent of the Bondholders and Joint Lenders'Forum (JLF). The Company has approached JLF for its approval which is under process andthe Company is in further discussions with the bondholder(s) for restructuring ofoutstanding amount of FCCBs.
9. HoLDING & SUBSIDIARY CoMPANIES
Consequent upon holding of 51% shares by Banks and FinancialInstitutions on conversion of loan into equity under SDR Jaiprakash Associates Limitedthe Promoter has ceased to be holding Company of your Company w.e.f. 18thFebruary 2017 As on 31st March 2017 the Company has following six subsidiaries: i)Jaypee Powergrid Limited; ii) Prayagraj Power Generation Company Limited; iii) JaypeeArunachal Power Limited; iv) Sangam Power Generation Company Limited; v) Jaypee MeghalayaPower Limited; vi) Bina Power Supply Limited (Formerly known as Himachal Karcham PowerCompany Limited).
The status of the projects implemented/being implemented throughaforesaid subsidiaries is as under:-9.1 Jaypee Powergrid Limited (JPL)
The Company is a Joint Venture Company with Power Grid Corporation ofIndia Limited and has set up Transmission System comprising of 400 kV Quad BundleConductor Double Circuit Line from Karcham Wangtoo HEP Pothead yard at Wangtoo toAbdullapur (223.80 KM) which has been in commercial operation w.e.f. 1st April 2012 andLILO of Baspa-Nathpa-Jhakri Transmission Line (4 KM) that has been in commercial operationw.e.f. 1st June 2011. The total capital expenditure on the project has been Rs 1006.92crore as on 31.03.2017. The System is operating satisfactorily with cumulativeavailability of transmission system for F.Y. 2016-17 at 99.96%. Revenue of Rs175.02 crorewas earned from the system during F.Y. 2016-17. Two interim dividends @ 6.5% and 4% weredeclared & paid during F.Y. 2016-17 and final dividend @ 2.5% has been paid.
9.2 Prayagraj Power Generation Company Limited (PPGCL)
Prayagraj Power Generation Company Limited acquired by the Companyfrom Uttar Pradesh Power Corporation Limited through competitive bidding process isimplementing 1980 MW (3x660 MW) Thermal Power Project (with permission to add twoadditional generation units of 660MW each) in Tehsil Bara of district Allahabad UttarPradesh.
Unit-I Unit-II and Unit III of the project were commissioned on 29thFebruary 2016 10th September 2016 and 26th May 2017 respectively and the Project isnow fully commissioned on 26th May 2017.
Power Purchase Agreement has been executed with U.P. Power CorporationLimited (UPPCL) for 25 years for sale of Power to the extent of 90% balance 10% to besold on merchant basis and Fuel Supply Agreement has been entered into between PPGCL &Northern Coalfields Limited for Coal linkages for Phase-I of 1980 MW.
The Project Cost was further revised from Rs 14596 crore to
Rs 15537 crore due to reasons beyond Company's control. Thus theProject Cost of Rs 15537 crore is being met through Equity of Rs 4543.50 crore and thebalance of Rs 10993.50 crore through debt.
For the two Units commissioned during the year under review the PlantAvailability Factor (PAF) and Plant Load Factor (PLF) was 60.74% and 53.58% respectively.The gross generation and net saleable energy during the financial year 2016-17 was
4410.48 MUs and 4064.23 MUs respectively.
An expenditure of approx. Rs 14650 crore had been incurred on theimplementation of the project upto March 2017. The operations of PPGCL had beenunsatisfactory due to unavailability of coal paucity of working capital funds / limitedresource of the Company. As such the Company has not been able to operate all the threeUnits; thus resulting in losses. Therefore the Company has not been able to pay interestregularly from February 2017 onwards to lenders.
Lenders evaluated the option for restructuring of debt (flexiblestructuring / SDR / S4A in JLF meeting held on 26th May 2017) and agreed to invokeRBI's "Scheme for Sustainable
Structuring of Stressed Assets (S4A)" dated 13th June 2016 asamended from time to time.
9.3 Jaypee Arunachal Power Limited (JAPL)
Jaypee Arunachal Power Limited (JAPL) was incorporated by your Companyas a wholly owned subsidiary of the Company to set up 2700 MW Lower Siang and 500 MWHirong H.E. Projects in the State of Arunachal Pradesh. Your Company alongwith itsAssociates will ultimately hold 89% of the Equity of JAPL and the balance 11% will be heldby the Government of Arunachal Pradesh.
For the 2700 MW Lower Siang Hydro Electric Project CEA approval wasobtained in February 2010 and the concurrence has been extended by CEA up to February2019. The process of land acquisition extension of validity of Terms of Reference forEIA/ EMP reports are being pursued with State Government. Based on the recommendations ofState Government Regional unit of MOEF GOI is processing the forest clearance. Morefield surveys have been carried out.
For 500 MW Hirong Hydro Electric Project CEA has issued concurrencefor the DPR. The Company has requested CEA for extension of Validity of TEC. In view ofthe Cumulative Impact studies of Siang Basin the same is under consideration. Publichearing had been conducted and the final EIA & EMP report has been submitted. MoEF hasasked for additional studies. The impact of Cumulative Impact studies of Siang Basin hasbeen studied and submitted. Based on the recommendations of State Government Regionalunit of MoEF GOI is processing the forest clearance.
An amount of Rs 228.29 crore has been incurred in respect of theaforesaid projects upto 31st March 2017.
9.4 Sangam Power Generation Company Limited (SPGCL)
Sangam Power Generation Company Limited was acquired by JPVL from UttarPradesh Power Corporation Limited (UPPCL) through competitive bidding process for theimplementation of 1320 MW (2 x 660 MW) Thermal Power Project (with permission to add oneadditional unit at 660 MW) in Tehsil Karchana of District Allahabad Uttar Pradesh.
All major statutory approvals for Phase-1 are in place and
Coal linkage for 4.68 MTPA by Northern Coalfield Limited has beenissued for Phase-1 of the Project.
SPGCL executed Deed of Conveyance with Uttar Pradesh Power CorporationLimited (UPPCL) but the District Administration could not hand over physical possession ofland to SPGCL due to local villagers' agitation. As such no physical activity couldbe started on the ground. SPGCL has written to UPPCL and all procurers that the PowerPurchase Agreement is rendered void and cannot be enforced. As such it was inter-aliarequested that SPGCL's claims be settled amicably for closing the agreement(s). UPPCLhad requested SPGCL to submit supporting documents regarding claim which have beenfurnished to UPPCL and are under their review.
A Committee has been constituted under the Chairmanship of ManagingDirector Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited for amicably closing the PPA.Draft of Share Purchase Agreement as prepared by Company's Legal Counsel has beensent to U.P. Power Corporation Limited (UPPCL)/Uttar Pradesh Rajya Vidyut Utpadan NigamLimited (UPRVUNL) for approval. The response from U.P. Government is awaited.
An amount of Rs 546.58 crore has been spent on the Project up to 31stMarch 2017.
9.5 Jaypee Meghalaya Power Limited (JMPL)
Jaypee Meghalaya Power Limited was incorporated by your company as itswholly owned subsidiary to implement 270 MW Umngot H.E.P. in the Umngot River Basin ofMeghalaya and 450 MW Kynshi-II Hydro-Electric Power Projects in the Kynshi River Basin onBOOT (Build Own Operate and Transfer) basis. Your company alongwith its associates willultimately hold 74% of the equity of JMPL and the balance 26% will be held by theGovernment of Meghalaya.
The field work of Survey & Investigation and EIA studies havealready been completed. The revised proposal for Kynshi-II HEP with involvement of lesserforest area has been submitted to State Government and Ministry of Environment and Forest(MOEF). Based on the observation of the MOEF Uranium Corporation of India has issuedNo Objection
Certificate' with respect to uranium deposit in the vicinity ofthe Project. Accordingly revised proposal for issuance of Term of Reference for EIAstudies was submitted. The control levels i.e. Full Reservoir Level & Tail Water Levelfor Kynshi-II Project has been approved by State Government. Approval of CentralElectricity Authority has been accorded in respect of water availability potential ofPower Generation.
With respect to the 270 MW Umngot H.E.P the State Government hasadvised that the project will not be operationalized as per MoA till further orders. Thematter is being examined by the State Government.
An aggregate amount of approx. Rs 8.50 crore has been spent on theabove said two projects upto March 2017.
9.6 Bina Power Supply Limited (Formerly known as Himachal KarchamPower Company Limited)
A subsidiary company as Himachal Karcham Power Company Limited wasincorporated on 14th March 2014. The name of the Company was subsequently changed fromHimachal Karcham Power Company Limited to Bina Power Supply Limited w.e.f. 28th September2015.
This Company is under discussions/exploring various options for goingahead with the Scheme of Arrangement between the Company Bina Power Supply Limited theirShareholders and Creditors in respect of Bina Power Project. Meanwhile the long stop datein respect of Securities Purchase Agreement between the Company and JSW Energy Limited hasbeen extended upto 31st December 2017.
10. REPoRT oN PERFoRMANCE oF SUBSIDIARIES
The performance and financial position of each of the subsidiaries ofthe Company for the year ended 31st March 2017 is attached in the prescribed format AOC-1as set out in "Annexure-A" and forms part of this Report.
In accordance with Section 136 of the Companies Act 2013 the AuditedFinancial Statements including the Consolidated Financial Statements and relatedinformation of the Company and Audited Accounts of each of its subsidiaries are availableon the website www.jppowerventures.com. These documents will also be available forinspection during business hours at the Registered Office of your Company.
The Policy on material subsidiaries as approved by the Board ofDirectors may be accessed on the Company's website at the link:http://jppowerventures.com/wp-content/uploads/2015/05/Policy-on-Material-Subsidiaries-.pdf
11. DIRECToRATE AND KEY MANAGERIAL PERSoNNEL 11.1 Changes in theBoard
(a) Shri S. D. Nailwal Non Executive Non-Independent Director steppeddown from the Board with effect from 18th November 2016. The Board records its deepappreciation for his valuable contribution during his long association as Director of theCompany.
(b) Shri Arun Balakrishnan Independent Director due to personalreasons resigned from the Board of the Company as such has ceased to be director of theCompany w.e.f. 9th July 2017. The Board records its deep appreciation for his valuablecontribution during his association as Independent Director of the Company. (c) ShriDharam Paul Goyal Non-Executive Non-Independent Director resigned from the Board of theCompany as such has ceased to be director of the Company w.e.f. 24th July 2017. TheBoard records its deep appreciation for his valuable contribution during his associationas Director of the Company.
(d) Shri M. K. V. Rama Rao was co-opted on the Board as AdditionalDirector of the Company with effect from 9th December 2016. He was also designated asWhole-time Director of the Company w.e.f. 9th December 2016.
His appointment /confirmation as Director has been included in theNotice convencing the ensuing Annual General Meeting.
(e) In accordance with the provisions of the Companies Act 2013 ShriManoj Gaur Shri G. P. Gaur and Ms. Sunita Joshi shall retire by rotation and areeligible for reappointment.
(f) In accordance with the provisions of Section 149 of the CompaniesAct 2013 and Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 Shri R.N. Bhardwaj Shri B.B. Tandon Dr J.N. Gupta ShriA.K. Goswami Shri S.S. Gupta were appointed as Independent Directors for a term ofthree successive years from 20th September 2014 to 19th September 2017 and Shri K.N.Bhandari Shri S.L. Mohan and Shri Atanu Sen were appointed as Independent Directors fora term of three successive years from 30th September 2014 to 29th September 2017.Further Shri K.P. Rao was appointed as Independent Director for a term of three years from30th May 2015 to 29th May 2018. As such their tenure as Independent Directors shallexpire on 19th September 2017 29th September 2017 and 29th May 2018 respectively.
(g) In terms of Section 149 of the Companies Act 2013 such Directorsare eligible for re-appointment as Independent Directors in the ensuing Annual GeneralMeeting of the Company.
(h) The Nomination & Remuneration Committee and Board in theirmeeting held on 31st July 2017 has recommended their re-appointment for a period of threeyears. The Special Resolutions for their re-appointment as Independent Directors have beenincluded in the Notice of the Annual General Meeting scheduled to be held on 15thSeptember 2017.
11.2 Pursuant to the provisions of Section 203 of the Companies Act2013 read with Rule 8 and 8A of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the following persons were designated as Key Managerial Personnelof the Company by the Board:- (i) Shri Sunil Kumar Sharma Vice-Chairman & CEO (ii)Shri Suren Jain Managing Director & CFO
(iii) Shri Praveen Kumar Singh Whole-time Director (iv) Shri M.K.V.Rama Rao Whole time Director
(v) Shri M.M. Sibbal Vice President and Company Secretary* *Consequentupon acceptance of resignation of Shri M.M. Sibbal w.e.f. 31st May 2017 Shri A.K.Rastogi has been appointed as Joint President and Company Secretary w.e.f. 1st June 201711.3 Nomination & Remuneration Policy
The Board has on the recommendations of the Nomination
& Remuneration Committee adopted a policy for selection andappointment of Directors Senior Management Personnel and their remuneration. During theyear there has been no change to the Policy. Hence the same is not annexed to thisReport but is available on the Company's website at www.jppowerventures.com.
12. NUMBER oF MEETINGS oF THE BoARD oF DIRECToRS
During the financial year 2016-17 six meetings of the Board ofDirectors were held. The maximum time gap between two Board Meetings was not more than onehundred and twenty (120) days. The details of date and attendance of the Directors at theBoard Meeting are given in Report on Corporate Governance which forms part of this AnnualReport.
13. STATEMENT oN DECLARATIoN GIVEN BY INDEPENDENT DIRECToRS
The Company has received declarations from all the
Independent Directors confirming that they meet the criteria ofindependence as stipulated under Section 149(6) of the Companies Act 2013 and Regulation16(1)(b) and 25(1) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
14. ANNUAL EVALUATIoN oF BoARD'S PERFoRMANCE
Pursuant to the provisions of Section 134(3)(p) of the Companies Act2013 read with Rule 8(4) of the Companies(Account)Rules2014andRegulation17(10)oftheSEBI(Listing Obligations and DisclosureRequirements) Regulations 2015 the Board has carried out an annual performanceevaluation of its own performance the Directors individually as well as the evaluation ofthe Committees constituted by it. The manner in which the formal annual evaluation hasbeen carried out has been explained in the Report on Corporate Governance which form partof this Annual Report.
15. PARTICULARS oF CoNTRACTS oR ARRANGEMENTS WITH RELATED PARTIES
All Related Party Transactions that were entered into during thefinancial year were done on an arm's length basis and in the ordinary course ofbusiness. During the year the Company has not entered into any contract/ arrangement/transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transaction.
The policy on Related Party Transactions as approved by the Board maybe accessed on the Company's website at the link:http://jppowerventures.com/wp-content/uploads/2015/05/Policy-on-Related-Party-Transactions.pdf.
The details of Related Party Transactions as required under Ind AS-24are provided in the accompanying Financial Statements forming part of this Annual Report.Form AOC-2 pursuant to Section 134 (3)(h) of the Companies Act 2013 read with Rule 8(2)of the Companies (Accounts) Rules 2014 is set out as "Annexure-B" tothis Report.
16. SIGNIFICANT AND MATERIAL oRDERS PASSED BY THE REGULAToRS oR CoURTSoR TRIBUNALS
During the year under review no significant orders impacting the goingconcern status and Company's operations in future have been passed by the Regulatorsor Courts or Tribunals.
17. AUDIToRS 17.1 Statutory Auditors
As per the provisions of the Companies Act 2013 the period of officeof M/s. R. Nagpal Associates Chartered Accountants of the Company expires at theconclusion of the ensuing Annual General Meeting.
It is proposed to appoint M/s. Lodha & Co. Chartered
Accountants for terms of 5 (five) consecutive years M/s. Lodha &Co. Chartered Accountants have confimed their eligibility and qualification requiredunder the Companies Act 2013 for holding the office as Statutory Auditors of the Company.
17.2 Cost Auditors
For the Financial Year 2016-17 the Board of Directors of the Companyhad re-appointed on the recommendations of the Audit Committee M/s.Kabra &Associates Cost Accountants (Firm Registration No. 0075) as Cost Auditors for auditingthe Cost Accounts in respect of Power Plants and Cement Grinding Unit of the Company. TheCost Audit Report for the
Financial Year ended 31st March 2016 has been filed in Form
CRA-4 with the Cost Audit Branch of the Ministry of Corporate Affairs.The Cost Audit Report for the Financial Year 2016-17 will be filed within the due date.
Pursuant to the provisions of Section 148 of the Companies
Act 2013 read with Notifications/Circularsissued by the
Ministry of Corporate Affairs from time to time the Board of Directorsof the Company have on the recommendation of Audit Committee appointed M/s. Kabra &Associates Cost Accountants as Cost Auditors of the Company for auditing the Cost Recordsrelating to "Power Generation" of various plants and also for Cement GrindingUnit of the Company for the Financial Year 2017-18 and a Resolution for ratification oftheir remuneration has been included in the Notice for ensuing Annual General Meeting.
17.3 Secretarial Audit
In pursuance of Section 204 of the Companies Act 2013 read with Rule 9of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theBoard on the recommendations of the Audit Committee has re-appointed
M/s. SGS Associates a firm of Company Secretaries in
Practice to undertake the Secretarial Audit of the Company for theFinancial Year ended 31st March 2018.
Secretarial Audit Report for the Financial Year ended on 31st March2017 issued by M/s. SGS Associates Company Secretaries in Form MR-3 forms part of thisreport is attached as "Annexure-C".
The said report does not contain any qualification or observationrequiring explanation or comments from Board under section 134(3)(f)(ii) of the CompaniesAct 2013.
18. AUDIToRS' REPoRT
The Directors wish to state that the Statutory Auditors of the
Company have given unmodified opinion on the Standalone
Financial Statements of the Company for the year ended 31st March2017. However the Auditors in their Report have made the following observations:-"As per records produced before us and according to the information and explanationsgiven and material to us the Company is generally regular in depositing undisputedstatutory dues applicable to it like Provident Fund Employees' State InsuranceIncome-tax Service Tax Sales Tax/ Value Added Tax Wealth Tax Customs Duty ExciseDuty Cess and other material statutory dues applicable to it with the appropriateauthorities except the following dues which are outstanding for a period exceeding sixmonths as on the Balance Sheet date:
|Name of Statute ||Department ||Amount |
|(Nature of dues) || ||in Rs Lacs (Including Interest) |
|VAT ||MPVAT ||602.59 |
|Interest on Excise Duty ||Excise Department ||31.96 |
|Development Cess/ ||Chief Electrical ||9266.60 |
|Electricity Duty ||Inspector Govt of MP. || |
In reply to the Observations of the Statutory Auditors in their Reporton Standalone Annual Audited Financial Statements the Company would like to say that theObservations of the Statutory Auditors referred to above pertains to outstanding dues fora period exceeding 6 (six) months as on the Balance Sheet date and pertains to non-depositof Statutory Dues i.e. VAT Interest on Excise Duty and Development Cess/ Electricity Dutyin respect of Company's 1320 MW Jaypee Nigrie Super Thermal Power Plant as per thedetails given in the report. The Company is generally depositing undisputed statutory duesapplicable to it like PF ESI Income-tax Service Tax Sales-tax VAT Wealth tax CustomDuty etc. The existing outstanding as on 29th May 2017 as against mentioned in AuditorsReport is as under:-
|Name of Statute ||Department ||Amount |
|(Nature of dues) || ||in Rs Lacs (Including Interest) |
|VAT ||MPVAT ||599 |
|Interest on Excise Duty ||Excise Department ||- |
|Development Cess/ ||Chief Electrical ||6767 |
|Electricity Duty ||Inspector Govt of MP. || |
The above outstanding dues would also be cleared shortly. The Auditorshave in their Report mentioned that During the year the company has defaulted in repaymentof Principal and interest to Banks and Financial institution/debenture holders whereinthe period of delay ranges from 1day to 364 Days which have however been subsequentlymade good during the year."
"As per Information and records produced before us details ofOverdue Interest on borrowings amounting to Rs 42432.18 lacs was reflected in Note No.32to the financial statements "Other Financial liabilities" which was outstandingas at 31st March 2017 as per the details given in the report."
"As per Information and records produced before us details ofOverdue Principal Repayment of borrowings amounting to Rs
3743.08 lacs reflected in Note No 32 which was outstanding as at 31stMarch 2017."
The Directors wish to state that the delay in payment of outstandingdues of the appropriate authorities banks and financial institutions was primarilybecause of following reasons:- Current Revenue of 1320 MW Jaypee Nigrie Super ThermalPower Plant was mainly due to restricted generation on account of non availability of longTerm PPAs non availability of corridor for tied up capacity and also lower merchant powerrates.
Generation of 500 MW Jaypee Bina Thermal Power Plant was adverselyaffected due to frequent back down instructions/despatch schedule for lesser hours bySLDC leading to un-economical operations.
In respect of Nigrie STPP and Bina TPP as per revised tariff normsadopted by MPERC for the FY 2016-17 to FY 2018-19 Annual Fixed Charges (AFC) have beencapped at Normative Availability (85%) and the incentive earlier available on availabilitybeyond Normative Availability have been done away.
This is apart from the general depressed economic conditions affectingthe power plants in the country. As regards outstanding overdues interest and overdueprincipal repayment of borrowings of banks and financial institutions. Your Company wouldlike to say that overdues interest and overdue principal repayment of borrowings has sincebeen reduced to Rs 36572 Lakhs and Rs 3163 Lakhs respectively as on 29th May 2017. TheCompany was in process/ discussions with lender(s) for implementation of full resolutionplan which inter-alia includes implementation of flexible restructuring of project loansof Bina Thermal Power
Plant under 5/25 Scheme and restructuring of balance loans of Companyunder S4A Scheme of Reserve Bank of India.
The Director further with to state that the "opinion" ofIndependent Auditors in their report on the consolidated financial statements pertains towholly owned subsidiary of the
Company i.e. Sangam Power Generation Co. Ltd. (SPGCL) incorporated fordevelopment of 1320 MW Power Project at Tehsil Karchna Dist. Allahabad Uttarpradesh.SPGCL incurred expenditure during the construction and incidental expenditure to sellingup of project which has been carried forward as Capital Work in Progress' andCapital Advances. In view of abnormal delay in handling over the possession of land thecompany has requested Uttar Pradesh Power Corporation Ltd. (UPPCL) to take over theproject and refund of investment made by it. Uttar Pradesh Power Corporation Limited hasin principle agreed to take over the project. Hence the management does not expect anymaterial adjustment in the carrying value of assets including Capital Work in Progress andcapital advances. However the management expects that the claims filed by SPGCL would beamicably settled soon.
Further the Auditors of the Company have given emphasis on thefollowing matter in their report on Consolidated Financial Statement of the Company asunder: "Sangam Power Generation Company Limited (SPGCL) a subsidiary of the Companyis yet to appoint management person as per the requirement of the Act. Our Opinion is notqualified in respect of this matter."
"Jaypee Meghalaya Power Limited (JMPL) a subsidiary of the Companyis yet to appoint Company Secretary as per the requirement of Section 203 of the CompaniesAct 2013. Our
Opinion is not qualified in respect of this matter."
In reply to para relating to Emphasis of matter of their Report theCompany would like to say that since SPGCL and JMPL were lying dormant without anyoperation and source of income they could not appoint necessary Key Managerial Personnelto meet the requirements of Companies Act 2013.
19. EXTRACT oF ANNUAL RETURN
Pursuant to Section 134(3)(a) of the Companies Act 2013 FormNo-MGT-9 Extract of the Annual Return for the Financial Year ended 31st March 2017 madeunder provisions of Section 92(3) of the Companies Act 2013 read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 is attached as "Annexure-D"which forms part of this Report.
20. PARTICULARS oF LoANS INVESTMENTS GUARANTEES AND SECURITY
The provisions of Section 186 of the Companies Act 2013 with respectto a loan guarantee or security is not applicable to the Company for being engaged inproviding infrastructural facilities except for making investments. Particulars ofinvestments are given in Note No. 7 & 8 to the Financial Statements. Howeverparticulars of loans given guarantees given and securities provided under the provisionsof Section 186 of the Companies Act 2013 are given in the Notes to the FinancialStatements.
21. RISK MANAGEMENT
Since the company does not fall within top 100 listed entities as permarket capitalization the provision of SEBI (LODR) Regulations 2015 regardingconstitution of Risk Management Committee are not applicable to the company. However theCompany has developed and implemented a Risk Management Policy which inter-alia: a)Establishes a framework for identification assessment monitoring mitigation andreporting of risks; and b) ensures that all the current and future material risk exposuresare identified appropriately mitigated minimized managed and critical risks whichimpact the achievement of Company's objective or threatens its existence areperiodically reviewed. c) ensures systematic and uniform assessment of risks related withconstruction and operations of power projects. d) assures business growth with financialstability.
22. MATERIAL CHANGES AND COMMITMENTS
In terms of Section 134(3)(l) of the Companies Act 2013 except asdisclosed elsewhere in this report no material changes and commitments which could affectthe Company's financial position which have occurred between the end of the financialyear of the Company to which the financial statements relate and date of the report andthere has been no change in the nature of business.
23. CORPORATE SOCIAL RESPONSIBILITY
The Company has constituted Corporate Social Responsibility (CSR)Committee and has framed a CSR Policy. The brief details of CSR Committee are provided inthe Report on Corporate Governance.
The Annual Report on CSR activities as required to be given underSection 135 of the Companies Act 2013 and Rule 8 of the Companies (Corporate SocialResponsibility Policy) Rules 2014 is annexed herewith as "Annexure-E".
24. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A report on Corporate Governance as stipulated by Regulation 34(3) ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 forms part ofthis Annual
Report along with the required Certificate confirming compliance withthe conditions of Corporate
As required under Regulation 34(2)(e) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Management Discussion and AnalysisReport on the operations and financial position of the Company has been provided in aseparate section which forms part of this Annual Report.
25. BUSINESS RESPONSIBILITY REPORT
In terms of Regulation 34 of SEBI (LODR) regulations 2015 the Companyfalls within top five hundred listed entities based on market capitalization as on 31stMarch 2017 as such a Business Responsibility Report (BRR) in the prescribed formatis annexed and forms part of this Annual Report describing the initiatives taken by theCompany from an environmental social and governance perspective towards adoption ofresponsible business practices.
The BRR as well as the Company's Policy on Sustainable Developmentare accessible on the Company's website www. jppowerventures.com.
26. DIVIDEND DISTRIBUTION POLICY
In terms of Regulation 43A of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 since the
Company falls within top five hundred listed entities based on marketcapitalization as on 31st March 2017 the Company has formulated a dividend distributionpolicy containing the matters specified in the Regulation which is annexed assessedquantified as Annexure F' and forms part of this Annual Report. TheDividend distribution policy is also available on the website of the Company.
27. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the
Directors to the best of their knowledge and ability confirm for theyear ended 31st March 2017 that: a) in the preparation of the annual accounts theapplicable accounting standards had been followed and that there were no materialdepartures; b) the Directors had in consultation with the Statutory Auditors selectedsuch accounting policies and applied them consistently and made judgments and estimatesthat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company for the year ended 31st March 2017 and loss of the Company for thatperiod; c) the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; d) the Directors had prepared the annual accounts on a going concernbasis; e) the Directors had laid down proper internal financial controls to be followedand that such internal financial controls were adequate and were operating effectively;and f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively. fromthe Auditors
28. WHISTLE BLOWER POLICY AND VIGIL MECHANISM
As already reported the Board has pursuant to the provisions ofSection 177(9) & (10) of the Companies Act 2013 read with Rule 7 of the Companies(Meetings of Board and its Powers) Rules 2014 and Regulation 22 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 formulated Whistle BlowerPolicy and Vigil Mechanism for Directors and employees under which protected disclosurescan be made by a whistle blower and provide for adequate safeguards against victimizationof Director(s) or employees(s) or any other person who avail the mechanism.
The Company believes in the conduct of the affairs of its constituentsin a fair and transparent manner by adopting highest standards of professionalismintegrity and ethical behavior.
The Vigil Mechanism cum Whistle Blower Policy may beaccessed on the Company's website at the link: http://jppowerventures.com/wp-content/uploads/2016/03/Vigil-Mechanism-cum-Whistle-Blower-Policy.pdf
29. INTERNAL FINANCIAL CONTROLS
The Internal Financial Controls with reference to financialstatements as designed and implemented by the Company are adequate. During the year underreview no material or serious observation has been received from the Internal
Auditors of the Company for insufficiency or inadequacy of suchcontrols.
The details pertaining to internal financial controls and theiradequacy have been disclosed in the Management Discussion & Analysis Report formingpart of this Report.
During the year under review the Company has not accepted any fixeddeposits within the meaning of Section 73 of the Companies Act 2013 ("the Act")read with the Companies
(Acceptance of Deposit) Rules 2014.
31. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
a) Statement showing details of employees as required under Section197(12) of the Companies Act 2013 read with Rule 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 has been provided in AnnexureG(I)which forms part of this Report. b) Information pertaining to remuneration to be disclosedby listed companies in terms of Section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014have been provided in AnnexureG(II) which forms part of this Report.
32. PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION ANDFOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption andforeign exchange earnings and outgo stipulated under Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of The Companies (Accounts) Second
Amendment Rules 2015 (As per notification dated 4th
September 2015) is annexed to this Report as "Annexure-H".
The Board places on record its sincere appreciation and gratitude tovarious Departments and Undertakings of the Central Government various State GovernmentsUPPCL MPPMCL APTEL CERC UPERC MPERC Financial Institutions Banks Rating Agenciesfor their continued cooperation and support to the Company. The Board sincerelyacknowledges the hard work dedication and commitment of the employees and the faith &confidence reposed by the shareholders in the Company.
| ||For and on behalf of the Board |
| ||MANoJ GAUR |
| ||Chairman |
| ||[DIN: 00008480] |
|Place : New Delhi || |
|Date : 31st July 2017 || |