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Jaiprakash Power Ventures Ltd.

BSE: 532627 Sector: Infrastructure
NSE: JPPOWER ISIN Code: INE351F01018
BSE 00:00 | 20 May 7.50 0.17
(2.32%)
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NSE 00:00 | 20 May 7.50 0.15
(2.04%)
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OPEN 7.60
PREVIOUS CLOSE 7.33
VOLUME 7778754
52-Week high 11.22
52-Week low 3.31
P/E 22.73
Mkt Cap.(Rs cr) 5,140
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Sell Price 0.00
Sell Qty 0.00
OPEN 7.60
CLOSE 7.33
VOLUME 7778754
52-Week high 11.22
52-Week low 3.31
P/E 22.73
Mkt Cap.(Rs cr) 5,140
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Jaiprakash Power Ventures Ltd. (JPPOWER) - Director Report

Company director report

To

The Members

The Directors of your Company are pleased to present the Twenty Fifth Annual Report onthe business and operations of the Company together with the Audited Financial Statements(Standalone and Consolidated) for the Financial Year ended 31st March 2020.

1. FINANCIAL HIGHLIGHTS

The Financial Performance of the Company (Standalone) for the year ended 31st March2020 is summarized below:-

(Rs. in Crores)

Particulars Current Year ended 31.03.2020 Previous Year ended 31.03.2019
Net Revenue 3266.83 3716.34
Add: Other operating income 16.82 16.06
Add: Other Income 74.72 141.69
Total Income 3358.37 3874.09
Profit before Interest Depreciation Exceptional items & Taxation 962.28 1321.57
Less : Finance Cost 649.97 1432.58
Less : Depreciation 478.98 475.12
Add: Exceptional items (Net) (2513.61) 52.68
Profit /(Loss) before Tax (2680.28) (533.45)
Add: Tax expenses (Net) (824.35) 155.57
Profit after Tax/(Loss) (3504.63) (377.88)
(Less)/Add: Other Comprehensive Income (0.42) 0.12
Total Comprehensive Income (3505.05) (377.76)

2. COMPANY'S PLANTS AND OPERATIONS

The Company is engaged in the business of thermal and hydro power generation coalmining and cement grinding. The company presently owns and operates three Power plantswith an aggregate capacity of 2220 MW Cement Grinding Unit and Coal Mine as per detailsgiven below:

(i) 400 MW Vishnuprayag Hydro-Electric Plant in the State of Uttarakhand which is inoperation since October 2006.

(ii) 500 MW Jaypee Bina Thermal Power Plant in Distt. Sagar (M.P) consisting of twounits of 250 MW each First unit had been in operation since August 2012 and second unitsince April 2013.

(iii) 1320 MW Jaypee Nigrie Supercritical Thermal Power Plant (JNSTPP) in Distt.Singrauli (M.P) consisting of two units of 660 MW each First unit had been in operationsince September 2014 and second unit since February 2015.

(iv) Cement Grinding facility at Nigrie called Jaypee Nigrie Cement Grinding Unit withan installed capacity of 2 MTPA.

(v) Amelia (North) Coal Mine in Distt. Singrauli Madhya Pradesh which was acquiredthrough e-auction in 2015 with annual capacity of 2.80 MTPA. Entire coal produced by thesaid coal mine is being utilized for Power Generation at JNSTPP.

The Plant availability Plant load factor and net saleable energy generation of Hydroand Thermal Power Plants for the Financial Year 2019 - 20 were as under:

Plant Plant Availability (%) Plant Load Factor (%) Net Saleable Energy Generation (MU)
Jaypee Vishnuprayag Hydro Power Plant (400 MW) 99.33 56.88 1735.77
Jaypee Bina Thermal Power Plant [500 MW - Phase I (of 1200 MW)] 84.91 56.49 2259.99
Jaypee Nigrie Supercritical Thermal Power Plant (1320 MW) 86.02 54.44 5806.44

The saleable energy generation for the year has been 9802.20 MUs as compared to10656.28 MUs during previous year i.e. lower by 854.08 MUs. The performance of variousplants is given as under:-

2.1 400 MW Jaypee Vishnuprayag Hydro Power Plant

400 MW Jaypee Vishnuprayag Hydro Power Plant is located at District ChamoliUttarakhand. The main equipment for the project was supplied by Alstom (France). TheCompany has a PPA with Uttar Pradesh Power Corporation Limited to supply 88% of net powergenerated and the remaining 12% is supplied free of cost to Uttarakhand Power CorporationLimited for delivery to the Government of Uttarakhand.

The performance of Vishnuprayag Hydro Power Plant during the Financial Year 2019-20 hasbeen very good. Actual energy generated during the year was more than the Design Energy.The total generation of energy during the Financial Year 2019-20 was 1998.59 MUs and netsaleable energy was 1735.77 MUs as compared to the generation of 1932.02 MUs and netsaleable energy of 1676.52 MUs during the previous year respectively. The differencebetween the previous year and current year generation being attributable to hydrology.

2.2 500 MW (Phase I of 1200 MW) Jaypee Bina Thermal Power Plant

Jaypee Bina Thermal Power Plant (JBTPP) located at Village Sirchopi District SagarMadhya Pradesh is a coal based thermal power plant having an installed capacity of 500 MW(2X250 MW).

The Company has a Power Purchase Agreement (PPA) with Madhya Pradesh Power ManagementCompany Ltd. (MPPMCL) to supply 65% of installed capacity at tariff determined by MPERCguidelines and with Government of Madhya Pradesh (GoMP) to supply 5% of actual generationat variable cost which is also to be supplied to MPPMCL on behalf of (GoMP). Thus thePlant supplies 70% of the installed capacity on long-term basis to MPPMCL in terms of thePower Purchase Agreements executed with them and balance of installed capacity is to besold as merchant power.

MPPMCL had restricted offtake to 70%/60% of the contracted capacity due to low demandof power in the State. Furthermore MPPMCL is not adhering to the above restriction of70%/60% of the contracted capacity and is giving despatch schedules of 3-5 hours per dayonly or schedule very low off take which is technically not feasible to run the Plantoptimally forcing Company to sell balance power to power exchanges at un-remunerativeprices. During the year 2019-20 total 1673.18 MUs power were sold through power exchangeout of which 27.15 MUs were at the remunerative rate 68.04 MUs were on Bilateral basisand balance 1577.99 MUs were to meet technical minimum requirement of the plant.

The gross energy generation of JBTPP was 2480.94 MUs during the year 2019 -20 ascompared to 2503.87 MUs during the previous year thus was lower by 22.93 MUs.

2.3 1320 MW Jaypee Nigrie Supercritical Thermal Power Plant

1320 MW (2x660 MW) Coal based Jaypee Nigrie Supercritical Thermal Power Plant islocated in Nigrie village Tehsil Sarai in Singrauli district of Madhya Pradesh. SteamGenerator and Steam Turbine Generator have been procured from L&T-MHI and Larsen &Toubro Limited respectively.

The Plant has long term PPAs with MPPMCL to supply 30% of installed capacity at tariffdetermined by MPERC guidelines and with GoMP to supply 7.5% of actual generation atvariable cost which is also to be supplied to MPPMCL on behalf of GoMP Part of Energygeneration is also sold on merchant basis through bilateral arrangements and throughIndian Energy Exchange & Power Exchange of India Limited. The operations have beenadversely affected due to non-availability of long term PPA(s) and non-availability ofcoal for the part capacity of the plant.

The gross energy generation of the Plant was 6312.59 MUs during the year 2019-20 ascompared to 7330.44 MUs in the previous year which was lower by 1017.85 MUs. During theyear 2019 -20 2554.86 MUs power was sold as merchant sales. The Company achieved a PLF of54.44 % as compared to 63.39 % in the previous year.

2.4 Amelia (North) Coal Mine Block

The Company has a captive coal mine Amelia (North) with an annual drawing capacity of2.8 MTPA.

The Coal production from the mine commenced w.e.f. 26th May 2015. The coal productionduring the financial year 2019-20 was 2.8 Million Tonne i.e. Peak rated capacity of theplant.

2.5 Jaypee Nigrie Cement Grinding Unit at Nigrie

2 MTPA Jaypee Nigrie Cement Grinding Unit at Nigrie Distt. Singrauli in MadhyaPradesh started commercial operations w.e.f. 3rd June 2015. Total production of Cementin the Plant during FY 2019 -20 was nil as against 48561MT in FY 2018 -19 mainly becauseof nonavailability of Clinker.

3. OPERATIONS

The total income from operations for the year ended 31st March 2020 aggregated to Rs.3283.65 crore as compared to Rs. 3732.40 crore in the previous year i.e. lower by Rs.448.75 crore.

The operation resulted in a loss before exceptional items tax and regulatory deferralaccount balances for the year under review of Rs 166.67 crore as compared to loss of Rs.586.13 crore in the previous year. Net Exceptional items is Rs. (2513.61 crore) during theyear under review inter-alia comprising of: - (i) Investment in PPGCL written off (Rs.2928 crore); (ii) Provision for diminution of investment in JPVL Trust (Rs. 1965.18crore); (iii) Interest up to March 2019 written back Rs. 2099.54 crore; and (iv) JSW loanwritten off Rs. 280 crore against net Exceptional items of Rs. 52.68 crores in theprevious year. The Tax expenses during the year under review are Rs. 824.35 crores(including Deferred Tax of Rs. 772.79 crores) during the year under review against Taxexpenses of Rs. (155.57 crore) in the previous year. The net loss during the year underreview is Rs. 3505.05 crore against Net Loss of Rs. 377.76 crore during the previous year.

The total income on consolidated basis for the year ended 31st March 2020 aggregatedto Rs. 3509.92 crore as compared to Rs. 4004.81 crore in the previous year. However Netloss after tax and exceptional items on consolidated basis during the year under reviewstood at Rs. 2147.60 crore as compared to net loss on consolidated basis of Rs. 367.35crore during the previous year.

4. COVID-19 IMPACT ON PERFORMANCE

Subsequent to the outbreak of Corona virus (Covid-19) and consequential lock downacross the country the Company has continued to generate and supply electricity to itscustomers which has been declared as an essential service by the Government of India.However for the shortterm period the demand of power is expected to be lower andaccordingly the Company had to operate power plants at lower plant load factor. TheCompany has also received notices invoking force majeure clause provided in the powerpurchase agreement (PPA) from Madhya Pradesh Power Management Company Ltd. (MPPMCL) inrespect of Jaypee Nigrie Supercritical Thermal Power Plant & Jaypee Bina Thermal PowerPlant and from Uttar Pradesh Power Corporation Limited (UPPCL) in respect of VishnuprayagHydro Power Plant respectively and also from Power Trading Corporation with whom Companyhas short term PPA which have been suitably replied by the Company and clarified that thesaid situation is not covered under force majeure clause considering electricity fallsunder essential services vide notification dated March 25 2020 issued by Ministry of HomeAffairs. The Power Ministry has also clarified on April 6. 2020 that the parties to thecontract to comply with the obligation to pay fixed capacity charges as per PPA.

The impact of the Covid-19 pandemic may be material from that estimated as at the dateof approval of these financial statements and the Company will continue to closely monitorany material changes to future economic conditions.

5. DIVIDEND

Due to losses suffered by the Company in the current year dividend was not recommendedby the Board.

6. TRANSFER TO RESERVES

No amount is proposed to be transferred to reserves.

7. SHARE CAPITAL

The paid up Equity Share Capital of the Company as on 31st March 2020 was Rs.68404510920 divided into 6840451092 Equity Shares of Rs.10/- each and as on 31stMarch 2020 40.84% of the paid-up Equity Share Capital of the Company is held by BanksFinancial Institutions and Insurance Companies. During the year the Company has allotted351769546 Equity Shares of Rs. 10/- each at par to JSW Energy Limited and 492678462Equity Shares of Rs. 10/- each at a price of Rs. 12 per share to the FCCB holders onpreferential basis.

Your Company has not issued any:

• shares with differential rights

• sweat equity shares

• equity shares under Employees Stock Option Scheme

8. DEBT RESOLUTION PLAN

Shareholders may recall that that the Company had a total outstanding debt of Rs. 9212crore as at 31st July 2018. In addition the Company also had outstanding debt of Rs. 752crore towards JSW and US $ 101.42 Million towards FCCBs holders (Rs. 663 crore as at 31stJuly 2018) and working capital facilities aggregating to Rs. 563 crore. A Debt ResolutionPlan as approved by the Lender(s) was approved by the shareholders in the Annual GeneralMeeting held on 20th September 2019 which envisaged that sustainable debt would beapprox. Rs.5600 crore against aggregate outstanding loan of Rs.9212 crore as on 31st July2018.

All the lenders had approved the resolution plan and executed Framework Agreement dated18th April 2019 which envisaged as follows:

a. Bifurcation of total debt into sustainable and unsustainable debt.

b. Unsustainable debt in respect of Nigrie Thermal Power Project amounting to Rs.3840.53 crore to be converted into convertible preference shares/long term instrument.

c. Out of total outstanding loan of JSW Energy Ltd. aggregating to Rs. 752.00 croreRs. 352.00 crore be converted into equity shares Rs.120.00 crore to be repaid ininstalments after securing the lenders and balance Rs.280 crore to be waived off.

d. The principal outstanding of FCCB Debt aggregating to 101.42 millions be convertedinto Equity Shares of the Company @ Rs.12/- per Equity Share of Rs.10/- each.

9 ISSUE OF COMPULSORY CONVERTIBLE PREFERENCE

SHARES

In pursuance to Framework agreement dated 18.04.2019 Debt Restructuring Plan approvedby lenders the Company has allotted 0.01% Cumulative Compulsory Convertible PreferenceShares (CCPs) aggregating to Rs. 3805.53 crore to lenders during the third quarter of theFY 2019-20. The said CCPs are unlisted and have a maturity of upto 29 years.

10. ISSUE OF 9.5% CUMULATIVE REDEEMABLE PREFERENCE SHARES (CRPS)

During the third quarter of the year 2019-20 pursuant to Debt Resolution plan andconsequent to Bilateral Agreements the Company has issued 9.5 % Cumulative RedeemablePreference Shares (CRPS) to Corporation Bank (Rs.22.50 crore) to be redeemed in nineannual instalments. The Company has redeemed CRPS amounting to Rs. 2.5 crore during lastquarter of the year under review. The Company has also issued 9.5 % Cumulative RedeemablePreference Shares to Canara Bank (Rs.12.02 crore) to be redeemed out of sale proceeds ofNigrie Cement Grinding Unit.

11. US$ 200 MILLION FCCBs

The Company had issued Foreign Currency Convertible Bonds during the Financial Year2009-10 for US $ 200 Million. The Company had partially redeemed FCCBs along withinterest. As on 1st April 2019 the principal outstanding of FCCBs was US $ 101421203.With the consent of Lenders a Bond Equitisation Term Sheet was executed on 20thSeptember 2019 and with the consent of Bond Holders in their meeting held on 13thDecember 2019 all outstanding FCCBs were mandatorily to be converted into equity sharesat a conversion price of Rs. 12/- per equity share of Rs.10/- each and entire outstandinginterest due thereon was waived off.

The Board of Directors of the Company on 17th January 2020 had allotted 492678462Equity Shares to those Bondholders who had given Conversion Notice on the ConversionRecord Date i.e. 16th January 2020 representing USD 83358594 at the agreed exchangerate of Rs. 70.9242 per US $ as on 14th January 2020. The Equity shares are listed onstock exchanges ranking pari passu with existing shares. The remaining FCCB holdersrepresenting aggregate USD 18062609 have right to get the shares allotted to themaggregating to 106756340 equity shares upto a period of one year i.e. upto 11thFebruary 2021.

12. DEBT OF JSW ENERGY LTD.

Pursuant to Debt Resolution plan out of total debt of JSW Energy Ltd. aggregating toRs. 752.00 crore Company & JSW Energy Limited have entered into Debt ResolutionAgreement on 02.01.2020. As per the Agreement signed with M/s. JSW Energy Ltd. (JSWEL) bythe Company for resolution/ restructuring of outstanding loan of Rs. 751.77 crore: (i)approx. 35.177 crore fully paid up equity shares of Rs. 10 each at par have been allottedto JSWEL on 10th January 2020 (ii) outstanding Loan of Rs. 280.00 crore and outstandinginterest which has not been provided for in the books has been waived / relinquished byJSWEL (iii) Balance of Rs. 120.00 crore shall be payable by the Company to JSWEL(interest free) and (iv) the Company and JSWEL have agreed to waive and release eachother from any claim/ payment whatsoever under the ‘Securities Purchase Agreement'(SPA) executed on 16th November 2014 for the transfer of Company's shares in HimachalBaspa Power Company Ltd. In view of this Rs. 280.00 crore which had been waived writtenback in quarter/period ended 31st December 2019. The Equity shares are listed on stockexchanges ranking pari passu with existing shares.

13. DEPOSITS

During the year under review the Company has not accepted any fixed deposits withinthe meaning of Section 73 of the Companies Act 2013 (“the Act”) read with theCompanies (Acceptance of Deposit) Rules 2014.

14. HOLDING & SUBSIDIARIES

As on 31st March 2020 the Company had following subsidiaries:

i) Jaypee Powergrid Limited;

ii) Jaypee Arunachal Power Limited;

iii) Sangam Power Generation Company Limited;

iv) Jaypee Meghalaya Power Limited;

v) Bina Power Supply Limited

The status of the projects implemented/being implemented through aforesaid subsidiariesis as under:-

14.1 Jaypee Powergrid Limited (JPL)

JPL is a Joint Venture Company with Power Grid Corporation of India Limited and has setup Transmission System comprising of 400 kV Quad Bundle Conductor Double Circuit Line fromKarcham Wangtoo HEP Pothead yard at Wangtoo to Abdullapur (219.80 KM) which has been incommercial operation w.e.f. 1st April 2012 and LILO of Baspa-Nathpa-Jhakri TransmissionLine (4 KM) has been in commercial operation w.e.f. 1st June 2011. The total capitalexpenditure on the project has been Rs. 1004.47crore as on 31.03.2020. The System isoperating satisfactorily with cumulative availability of transmission system for FY2019-20 at 99.53%. Total revenue of Rs.164.58 crore was earned from the system during FY2019-20

14.2 Jaypee Arunachal Power Limited

Jaypee Arunachal Power Limited (JAPL) was incorporated by Jaiprakash Power VenturesLimited as a wholly owned subsidiary of the company to set up 2700 MW Lower Siang and 500MW Hirong H.E. Projects in the State of Arunachal Pradesh. Jaiprakash Power VenturesLimited alongwith its Associates will ultimately hold 89% of the Equity of JAPL and thebalance 11% will be held by the Government of Arunachal Pradesh.

For the 2700 MW Lower Siang Hydro Electric Project Central Electricity Authority (CEA)concurrence for Detailed Project Report (DPR) was obtained in February 2010 and theconcurrence has been extended by CEA. Based on the recommendations of State GovernmentRegional unit of MOEF GOI is processing the forest clearance forest clearance case isunder scrutiny with Nodal officer Itanagar. Draft Rehabilitation & Resettlement Planis submitted to State Govt for its approval. Power Purchase Agreements are to be submittedfor final approval. The details submitted to CEA for getting concurrence of DetailedProject Report revalidated. The cases of land acquisition extension of validity of ToRfor EIA/ EMP reports are being pursued with State Government. More field surveys have beencarried out.

For 500 MW Hirong Hydro Electric Project CEA concurrence for the DPR has beenobtained. The Company has requested CEA for extension of Validity of TEC. In view of theCumulative Impact studies of Siang Basin the same is under consideration. Public hearinghad been conducted and the final EIA & EMP report has been submitted to Ministry ofEnvironment & Forest for environment clearance. MoEF has asked for additionalCumulative Impact studies of Siang Basin. The impact of Cumulative Impact studies of SiangBasin has been studied and submitted. After its review by MoEF extension of validity ofconcurrence for the DPR will be accorded. Based on the recommendations of StateGovernment Regional unit of MoEF GOI is processing the forest clearance.

An amount of approx. Rs.228.30 crore has been incurred in respect of the aforesaidprojects upto 31st March 2020.

14.3 Sangam Power Generation Company Limited

Sangam Power Generation Company Limited (SPGCL) was acquired by Jaiprakash PowerVentures Limited (JPVL) from Uttar Pradesh Power Corporation Limited (UPPCL) throughcompetitive bidding process for the implementation of 1320 MW (2 x 660 MW) Thermal PowerProject (with permission to add one additional unit at 660 MW) in Tehsil Karchana ofDistrict Allahabad Uttar Pradesh.

SPGCL executed Deed of Conveyance with Uttar Pradesh Power Corporation Limited (UPPCL)but the District Administration could not hand over physical possession of land to SPGCLdue to local villagers' agitation. As such no physical activity could be started on theground. SPGCL has written to UPPCL and all procurers that the Power Purchase Agreement isrendered void and cannot be enforced. As such it was inter-alia requested thatCompany's claims be settled amicably for closing the agreement(s). Due to abnormal delayin resolving the matter by UPPCL SPGCL has withdrawn all its undertakings given to UPPCLand lodged a claim of Rs. 1157.22 crore on them vide its letter no. SPGCL/NOIDA/2018/01dated 13.03.2018. Further SPGCL has filed a petition with Hon'ble Uttar PradeshElectricity Regulatory Commission (UPERC) for release of performance bank guarantee andpayment of certain claims.

Hon'ble UPERC has concluded the hearing and vide order dated 28th June 2019 hasdirected UPPCL as under: -

a) The Power Purchase Agreement dated 17th October 2008 and Share Purchase Agreementdated 23rd July 2009 would stand terminated. As a consequence of termination of SharePurchase Agreement the Respondent (UPPCL) shall become the owner of SPGCL.

b) Allowed reimbursement of actual expenses of Rs. 251.37 crores and allowed simpleinterest @9% on Rs. 149.25 crores which include expenditure on Land Advances and Admin.Expenses.

c) The Respondent will immediately release the Bank Guarantee provided by thePetitioner (SPGCL).

UPPCL has filed an appeal with APTEL. Hearing completed and order is reserved. SPGCLhas also filed a counter appeal with APTEL.

An amount of Rs. 549.22 crore has been spent on the Project up to 31st March 2020.

14.4 Jaypee Meghalaya Power Limited

Jaypee Meghalaya Power Limited was incorporated to implement 270MW Umngot HE PowerProject and 450MW Kynshi-II HE Power Project on BOOT (Build Own Operate and Transfer)basis and is presently the Wholly- owned Subsidiary of Jaiprakash Power Ventures Limited(JPVL).

JPVL alongwith its associates will ultimately hold 74% of the equity of the Company andthe balance 26% will be held by the Government of Meghalaya.

There has not been any change in the progress status as reported in the last year'sAnnual Report.

An aggregate amount of approx. Rs. 8.50 crores has been spent on the above said twoprojects upto March 2020.

14.5 Bina Power Supply Limited

Consequent to termination of Securities Purchase Agreement (SPA) executed with JSWwhich was extended upto 31st December 2017 the Scheme of Arrangement for transfer of 500MW Bina Project from the Company to its subsidiary BPSL would not be implemented.

15. PRAYAGRAJ POWER GENERATION COMPANY LIMITED

Prayagraj Power Generation Company Limited (PPGCL) acquired by your Company from UttarPradesh Power Corporation Limited through competitive bidding process had implemented1980 MW (3x660 MW) Thermal Power Project in Tehsil Bara of District Allahabad UttarPradesh and all the three units were in operation.

Since the operations of PPGCL were not satisfactory due to paucity of working capital/limited resource of the Company thus resulting in losses. As such the Company was notbeing able to pay interest regularly from February 2017 onwards.

The lenders in the JLF meeting held on 20th November 2017 decided to invoke the entirepledge of shares of Company's holding in PPGCL pledged as collateral security forfinancing of PPGCL and on 18.12.2017 SBICAP Trustee Company Limited (SBICAP) transferredthe entire shareholding of Company in PPGCL (equivalent to 89.47% of total capital ofPPGCL) in its name on behalf of the Lender(s).

SBICAP vide letter dated 19th December 2018 had further informed that the Lenders hadfurther decided to change the ownership of PPGCL by way of transfer of the Pledged EquityShares and Pledged Preference Shares under a Resolution Plan in accordance with the extantguidelines and regulations of the Reserve Bank of India.

A Share Purchase Agreement (SPA) was entered into on 13th November 2018 by and amongstthe Banks and Financial Institutions (as the Lenders) Resurgent Power Ventures Pte. Ltd.Singapore (as the Investor) Renascent Power Ventures Private Limited Mumbai (as thePurchaser) PPGCL (as the Company) and SBICAP Trustee Company Limited (as the Seller) tosell to the Purchaser on the completion of commencement date the Equity Shares and thePreference Shares together with all rights benefits and entitlements attaching theretofree and clear of any Encumbrances for the consideration in accordance with thisAgreement.

For approval of change in Management of PPGCL SBI approached to UPPCL who asked SBIto approach to UPERC for their approval. UPERC in its order dated 29th March 2019approved the change of Management subject to Resurgent Power reducing fixed capacitycharges by Rs. 0.14 per unit in each year for the remaining terms of the PPA starting from01.04.2020 and also withdraw all the cases filed by PPGCL against UPPCL in UPERC. Againstthe order of UPERC Resurgent Power filed Appeal in APTEL. APTEL vide its order dated the27th September 2019 upheld the approvals/waiver/ relaxation granted by UPERC but withoutany reduction of adopted tariff.

SBICAP Trustee vide its letter dated 2nd December 2019 had informed that all theequity shares and preference shares would be transferred to new entity viz. RenascentPower Ventures Private Limited w.e.f. 4th December 2019. The shares held by the companyin PPGCL have since been transferred to Renascent Power Ventures Private Limited and allthe existing directors of PPGCL had resigned from the Board of PPGCL w.e.f. 4th December2019.

16. REPORT ON PERFORMANCE OF SUBSIDIARIES

The performance and financial position of each of the subsidiaries of the Company forthe year ended 31st March 2020 is attached in the prescribed format AOC-1 as set out in “Annexure-A”and forms part of this Report.

In accordance with Section 136 of the Companies Act 2013 the Audited FinancialStatements including the Consolidated Financial Statements and related information of theCompany and Audited Accounts of each of its subsidiaries are available on the website www.jppowerventures.com.

The Policy on Material Subsidiaries as approved by the Board of Directors may beaccessed on the Company's website at the link: http://jppowerventures.com/wp-content/uploads/2015/05/Policy-on-Material- Subsidiaries-.pdf

17. DIRECTORATE AND KEY MANAGERIAL PERSONNEL

17.1 Changes in the Board

a) Shri B.B. Tandon (DIN: 00740511) owing to health reasons had resigned from theBoard of the Company w.e.f. 17th July 2019. The Board records its deep appreciation forhis valuable contribution during his association as Independent Director of the Company.

b) Shri Jagmohan Garg (DIN: 00364981) was appointed as Additional Director(Independent) w.e.f. 16th October 2019 and was designated as Chairman of the AuditCommittee. His appointment is proposed as an Independent Director pursuant to provisionsof the Section 149 and 152 (2) of the Companies Act 2013 read with Rules made thereunderin the forthcoming Annual General Meeting.

c) Shri M.K.V. Ramarao (DIN: 03257012) - Whole-time Director completed his term andceased to be a Whole-time Director/ Director w.e.f. 9th December 2019.

d) Shri Manoj Gaur (DIN: 00008480) and Ms. Sunita Joshi (DIN: 00025720) shall retire byrotation at the ensuing Annual General Meeting and are eligible and have offeredthemselves for re-appointment.

e) Shri Jyoti Kumar Agarwal (DIN: 01911652) was appointed as Additional Director in theBoard meeting held on 26th May 2020 who is eligible and is proposed to be appointed as aNon Executive Director pursuant to provisions of Section 152(2) of the Companies Act2013 office of which shall be liable to retire by rotation.

17.2 Key Managerial Personnel

Consequent upon stepping down of Shri Sunil Kumar Sharma as Chief Executive Officer ofthe Company Shri Suren Jain has been re-designated as Managing Director & CEO of theCompany w.e.f. 28th July 2019.

Shri R.K. Porwal Chartered Accountant was appointed as Chief Financial Officer of theCompany w.e.f. 27th January 2020. Shri Porwal is associated with the Group since 2003 andwas working as Joint President (Finance & Accounts) and CFO of Jaypee Power Grid Ltd.one of the JV subsidiary of the Company.

Shri A.K. Rastogi Joint President and Company Secretary (FCS 1748) had completed histerm on 29th February 2020. In his place Shri Mahesh Chaturvedi

(FCS 3188) has been appointed as Company Secretary and Compliance Officer w.e.f. 26thMay 2020.

17.3 Number of meetings of the Board of Directors

During the financial year 2019 -20 five meetings of the Board of Directors were held.The maximum time gap between two Board Meetings was not more than one hundred and twenty(120) days. The details of date and attendance of the Directors at the Board Meeting aregiven in Report on Corporate Governance.

17.4 Statement on declaration given by Independent Directors

The Independent Directors of your Company have confirmed that (a) they meet thecriteria of Independence as prescribed under Section 149 of the Act and Regulation 16 ofthe Listing Regulations 2015 and (b) they are not aware of any circumstance or situationwhich could impair or impact their ability to discharge duties with an objectiveindependent judgement and without any external influence. Further in the opinion of theBoard the Independent Directors fulfil the conditions prescribed under the ListingRegulations 2015 and are independent of the management of the Company.

17.5 Nomination & Remuneration Policy

As per provisions of the SEBI (Listing Obligation and Disclosure Requirement)(Amendment) Regulation 2018 which had come into force w.e.f. 1.4.2019 in line with themodifications corresponding changes have been made in the Nomination and RemunerationPolicy of the Company by the Board on the recommendation of Nomination & RemunerationCommittee. The revised Nomination and Remuneration Policy is available on our website atwww.jppowerventures.com.

17.6 Annual evaluation by the Board of its own performance performance of itsCommittees and Individual Directors

(i) Pursuant to provision of Section 178 (2) of the Companies Act 2013 Nomination andRemuneration Committee (NRC) of the Board in their meeting held on 11th May 2019 hadspecified the manner for effective evaluation of performance of Board its Committees andindividual Directors. Accordingly NRC in its meeting held on 25thMay 2020 carried outthe evaluation of performance of Board its Committees except NRC and that of individualDirectors other than independent directors on the basis of various attributes andparameters as well as in accordance with Nomination and Remuneration Policy of theCompany.

(ii) A meeting of Independent Directors was held on 12th February 2020 without theattendance of Non-Independent Directors or any member of the Management for evaluation ofperformance of Non-Independent Directors and Board as a whole and the Chairperson as wellas to assess the quality quantity & timeliness of information between Companymanagement and Board that was necessary for Board to effectively & reasonably performtheir duties.

(iii) As per para VIII (1) of the Schedule IV of the Companies Act 2013 as well as bythe Regulation 17(10) of SEBI (LODR) Regulations 2015 the Board of Directors in theirmeeting held on 26th May 2020 evaluated the performance of the Board was a wholeperformance of the Committees and also the performance of every individual Director(including Independent Directors). The evaluation of Independent Directors was done by theentire Board excluding the Director being evaluated. Further as per the said Regulation17(10) of SEBI (LODR) Regulations 2015 the Board also evaluated fulfilment of thecriteria of independence and their independence from the management.

18 DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Directors to the best oftheir knowledge and ability confirm in respect of the Audited Annual Accounts for theyear ended 31st March 2020 that:

a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed and that there were no material departures;

b. the Directors had in consultation with the Statutory Auditors selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company for the year ended 31st March 2020 and loss of the Company for that period;

c. the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d. the Directors had prepared the annual accounts on a going concern basis;

e. the Directors had laid down proper internal financial controls to be followed andthat such internal financial controls were adequate and were operating effectively; and

f. the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

19 AUDITORS

19.1 Statutory Auditors

M/s. Lodha & Co. Chartered Accountants were appointed as Statutory Auditors ofthe Company for a period of five consecutive years at the 22nd Annual General Meetingheld on 15th September 2017 subject to ratification of their appointment in the AGM everyyear pursuant to the provisions of Companies Act 2013. However requirement ofratification of appointment of Auditors at every Annual General Meeting has been done awayvide Companies (Amendment) Act 2017 hence resolution for ratification of appointment ofAuditors is not included in the Notice calling Annual General Meeting for the FY 2019-20.

19.2 Cost Auditors

For the Financial Year 2019-20 the Board of Directors of the Company had re-appointedon the recommendations of the Audit Committee M/s. Kabra & Associates CostAccountants (Firm Registration No. 0075) as Cost Auditors for auditing the Cost Records inrespect of Power Generation and Cement Grinding Unit of the Company. The Cost Audit Reportfor the Financial Year ended 31st March 2019 has been filed in Form CRA-4 with the CostAudit Branch of the Ministry of Corporate Affairs. The Cost Audit Report for the FinancialYear 2019-20 will be filed within the due date.

Pursuant to the provisions of Section 148 of the Companies Act 2013 read withNotifications/Circulars issued by the Ministry of Corporate Affairs from time to time theBoard of Directors of the Company have on the recommendation of Audit Committeeappointed M/s. Kabra & Associates Cost Accountants as Cost Auditors of the Companyfor auditing the Cost Records relating to “Power Generation” of various plantsof the Company and also for Cement Grinding Unit for the Financial Year 2020-21 and aResolution for ratification of their remuneration has been included in the Notice forAnnual General Meeting.

19.3 Secretarial Audit

In pursuance of Section 204 of the Companies Act 2013 read with Rule 9 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Boardon the recommendations of the Audit Committee has re-appointed M/s. SGS Associates afirm of Company Secretaries in Practice to undertake the Secretarial Audit of the Companyfor the Financial Year ended 31st March 2021.

Secretarial Audit Report for the Financial Year ended on 31st March 2020 issued byM/s. SGS Associates Company Secretaries in Form MR-3 forms part of this report andmarked as “Annexure-B”.

The said report does not contain any qualification or observation requiring explanationor comments from Board under section 134(3)(f)(ii) of the Companies Act 2013.

20. AUDITORS' REPORT

The Directors wish to state that the Statutory Auditors of the Company has givenmodified opinion on the Standalone Financial Statements of the Company for the year ended31st March 2020. The qualification in the Standalone Financial Statement and managementresponse to the aforesaid qualification is given as under:-

Auditors' Qualification Management's Reply
a) As stated in note no. 44(e) of audited standalone financial statements for the year ended 31st March 2020 the Company has given/provided corporate guarantee of USD 1500 lacs (previous year USD 1500 lacs) for loans granted by the lender to Jaiprakash Associates Limited (JAL) (the party to whom the company is an associate) of amounting to Rs. 70333 lacs (previous year Rs. 70333 lacs) for which fair valuation has not been done as per the applicable IND-AS as of 31st March 2020 and also no provision against the said guarantee been made in these financial results. In the absence of fair valuation of the stated corporate guarantee we are not able to ascertain the impact of the same on the financial results (Footnote no. 6 of accompanying financial results). In the opinion of the Management there will be no material impact of the fair valuation of the following guarantee on the financial result/ statement of affairs. Accordingly fair valuation is not being considered and recorded in this financial statement.
(Corporate Guarantee of US$ 1500 Lakhs in favour of State Bank of India Hong Kong branch for the credit facilities granted by lenders to Jaiprakash Associates Limited (Party to whom the company is Associate). The principal amount of loan outstanding of US$ 1300 Lakhs (equivalent to Rs. 70333 lakhs) has been converted into rupee term loan by State Bank of India vide sanction letter dated 28th December 2016. Presently Impact cannot be quantified.
b) As stated in note no. 46 and 53(a) of audited standalone financial statements for the year ended 31st March 2020 No provision for diminution in value against certain long term investments of amounting to Rs. 78915 lacs (previous year Rs. 78905 lacs) (Book Value) has been made by the management as in the opinion of the management such diminution is temporary [this to be read with footnote no. 3 of accompanying financialresults] in nature considering the intrinsic value of the assets future prospects and claims (impact unascertainable) (Footnote no. 8 of accompanying financial results). No provision for diminution in value against following long term investments of amounting to Rs.78915 lakhs (Book Value) has been made as in the opinion of the management such diminution is temporary in nature considering the intrinsic value of the assets future prospects and claims and management is confident that no provision for the same at this stage is considered necessary.
Rs/Lakhs
(i) Investment in Sangam Power Generation Company Limited 55207
Having regard to the above management of the Company has concluded that no provision against diminution in value of investment made as stated above in subsidiary companies is necessary at this stage. (ii) Investment in Jaypee Arunachal Power Ltd 22862
(iii) Investment in Jaypee Meghalaya Power Ltd 841
(iv) Interest in Bina Power Supply Company Ltd. 5
Total 78915
Above both qualifications are appearing since the year ended 31st March 2018. Presently Impact cannot be quantified.

Further the Auditors in their Report on Standalone Financial Statements had givenEmphasis on certain matters but their opinion the Report is not modified on thesematters. The Emphasis of matter in the Standalone Annual Audited Financial Statement and

Management Reply thereto were as under:-

Auditors Emphasis on matters Management's Reply
a) As Stated in Note no. 48 (i) of the audited standalone financial statements for the year ended 31st March 2020 no provision has been considered necessary by the management against Entry Tax in respect of Nigrie STPP (including Nigrie Cement Grinding Unit) amounting to Rs. 10656 lacs (previous year Rs. 9074 lacs) and interest thereon (impact unascertainable) as stated in said note. In respect of Nigrie STPP (including Nigrie Cement Grinding Unit) receipts of approval for extension of the time for eligibility for exemption from payment of entry tax is pending from concerned authority as stated in the said note for which the company has made representations before the concerned authority and management is confident for favourable outcome. Against the entry tax demand till date Rs. 4736 lacs (previous year Rs. 3580 lacs) has been deposited and shown as part of other non- current assets which is in the opinion of the management is good and recoverable. The Company has not made provision against Entry Tax in respect of Nigrie Power and Cement unit amounting to Rs. 10656 lacs (Previous year Rs. 9074 lacs) and interest thereon (impact unascertainable) in respect of Nigrie Power and Cement unit receipts of approval for extension of the time for eligibility of exemption from payment of Entry tax is pending from concerned authority for which the company has made representations before the concerned authority and management is confident for favourable outcome. Against the entry tax demand till date Rs.4736 lacs (Previous year Rs. 3580 lacs) has been deposited which in the opinion of the management is good and recoverable.
b) As stated in note no. 59(a) of the audited standalone financial statements for the year ended 31st March 2020 regarding Pending confirmations/reconciliation of balances of secured borrowings confirmation of release of guarantee provided by the Company to the lenders of PPGCL balances with banks including certain fixed deposits trade receivables trade payables (including of micro and small) and others (including capital creditors and of CHAs and receivables/payables from/to related parties) loans & advances and inventory lying with third parties/in transit. In this regard as stated in the note internal control is being strengthen through process automation (including for as stated in note no. 59(b) regarding of fuel procurement and consumption processes which are in process of further strengthening). The management is confident that on confirmation/ reconciliation there will not be any material impact on the state of affairs as stated in said note (this is to be read with footnote no.4 of accompanying financial results). Management is in the process to confirmations/ reconciliation of balances of certain secured borrowings confirmation of release of guarantee provided by the Company to the lenders of PPGCL balances with banks including certain fixed deposits trade receivables trade payables (including of micro and small) and others (including capital creditors and of CHAs and receivables/ payables from/to related parties) loans & advances and inventory lying with third parties/in transit. And internal control is being strengthen through process automation regarding fuel procurement and consumption processes which are in process of further strengthening. The management is confident that on confirmation/ reconciliation there will not be any material impact on the state of affairs as stated in said note.
c) For deferred tax assets on unabsorbed depreciation & business losses and of MAT credit entitlement recognised of amounting to Rs. 29728 lacs (previous year Rs.110194 lacs) and Rs. 22403 lacs (previous year Rs. 27559 lacs) respectively the Management is confident about realisability. Accordingly these have been considered good by the management as stated in Note no. 66 (c) of the audited standalone financial statements for the year ended 31st March 2020. Though the company has been incurring losses in last few years it expects turnaround of the sector and accordingly Deferred tax assets in respect of unabsorbed depreciation and business losses and MAT credit entitlement have been recognized amounting to Rs. 29728 lakhs and Rs.22403 lakhs respectively owing to reasonable certainty of availability of future taxable income to realize such assets. Accordingly these have been considered good and no provision there against at this stage is considered necessary in the financial statements.
d) (i) As stated in the Note no. 56 of the standalone financial statements for the year ended 31st March 2020 Fair value of Jaypee Nigrie Cement grinding unit being in excess as compared to the carrying value of Rs. 25581 lacs as assessed by the management considering the expected future cash flow Also management is of the view that no impairment provision in the carrying amount of fixed assets (including capital work-inprogress) is necessary at this stage considering above stated reason. (i) As assessed by the Management carrying value is lower than fair value(based on valuation done by an expert and future cash flows) therefore the management feel that there is no need to make provision on account of impairment at the stage.
(ii) As stated in the Note no. 55 of the audited standalone financial statements for the year ended 31st March 2020 fair value of fixed assets of power plants (JNSTPP and JBTPP) (including Land Building Plant & Machinery capitalized or under CWIP) being in excess as compared to the carrying value as estimated by a technical valuer and for the reasons explained in the said note management is of the view that no impairment provision in the carrying amount of fixed assets (including capital work-in-progress) is necessary at this stage. (ii) In view of fair value for all fixed assets of power plants (JNSTPP and JBTPP) (including Land Building Plant & Machinery capitalized or under CWIP) being excess as compared to the carrying value as estimated by a technical valuer and based on the future cash flows management does not anticipate any impairment.
e) (i) As stated in note no. 53(c) of audited standalone financial statements for the year ended 31st March 2020 regarding accounting/charge to the Statement of Profit & Loss during the year against invocation of pledged shares during earlier year of Prayagraj Power Generation Company Limited (PPGCL an erstwhile subsidiary company shares were pledged by the Company in favour of the lenders of PPGCL). During the preceding quarter on transfer of shares by the lenders in favour of the BUYER accounted for loss as Exceptional Item of amounting to Rs. 292800 lakhs as explained in the stated note (Footnote no. 5 of the accompanying financial results). (i) In the earlier years shares of PPGCL were pledged with Security Trustee SBI Cap Trustee Company Ltd. (SBI Cap) as collateral security for the financial assistance granted by lenders to PPGCL and same had been invoked on 18th December 2017 due to default in payment of dues to banks/ financial institutions. During the year the lenders have affected change in Management in favour of Renascent Power Ventures Private Limited. Post the stated transfer/sale of shares by the lenders nothing has been realised by the Company on this transaction. Hence full amount has been provided. The same has been addressed in the Auditor's report and no further explanation is required.
(ii) As stated in note no. 53(b) of audited standalone financial statements for the year ended 31st March 2020 regarding provision made against diminution in the value of investment in Trust of amounting to Rs.196529lacs during the year (including Rs.193268 lakhs provided during quarter/period ended 31st December2019) (Footnote no. 7 of the accompanying financial results). (ii) Provision of diminution in value of Rs. 196529 lakhs (including Rs. 193268 lakhs for the quarter/period ended December 312019) has accounted for on account of fair valuation of Investment in Trust. The same has been addressed in the Auditor's report and no further explanation is required.
f) Note no. 58 of the audited standalone financial statements which describes the uncertainties and the impact of Covid-19 pandemic on the Company's operations and results as assessed by the management. Further due to Covid-19 related lock down restrictions management was able to perform year end physical verification of inventory at certain locations subsequent to the year end. Also we were not able to physically observe the verification of inventory that was carried out by the management. Consequently we have performed alternative procedures to audit the existence of Inventory as per the guidance provided in SA-501 “Audit Evidence - Specific Considerations for Selected Items” and have obtained sufficient audit evidence (footnote no. 11 of accompanying financial results) The management does not see any medium to long term risk in regard to meeting its liabilities as and when they fall due and compliance with debt covenant as applicable. The impact of Covid-19 pandemic will continue to be closely monitored for any material changes.
Our opinion is not modified in respect of above stated matters in para (a) to (f).

Further the Auditors of the Company in their Report have also given certainqualification on Consolidated Financial Statements of the Company for the Financial Year2019-20. The qualified opinion of the Statutory Auditors and management reply thereto isas under:-

Auditors' Qualification Management's Reply
a) As stated in note no. 43(h) of audited consolidated financial statements for the year ended 31st March 2020 the Company has given/provided corporate guarantee of USD 1500 lacs (previous year USD 1500 lacs) for loans granted by the lender to Jaiprakash Associates Limited (JAL) (the party to whom the company is an associate) of amounting to Rs. 70333 lacs (previous year Rs. 70333 lacs) for which fair valuation has not been done as per the applicable IND-AS as of 31st March 2020 and also no provision against the said guarantee been made in these financial results. In the absence of fair valuation of the stated corporate guarantee we are not able to ascertain the impact of the same on the financial results (Footnote no. 6 of accompanying financial results). Above qualification is appearing since the year ended 31st March 2018. In the opinion of the Management there will be no material impact of the fair valuation of the following guarantee on the financial result/ statement of affairs. Accordingly fair valuation is not being considered and recorded in this financial statement. (Corporate Guarantee of US$ 1500 Lakhs in favour of State Bank of India Hong Kong branch for the credit facilities granted by lenders to Jaiprakash Associates Limited (Party to whom the company is Associate).The principal amount of loan outstanding of US$ 1300 Lakhs (equivalent to Rs. 70333 lakhs) has been converted into rupee term loan by State Bank of India vide sanction letter dated 28th December 2016. Presently Impact cannot be quantified.
b) In respect of Subsidiary Company Sangam Power Generation Company Limited (SPGCL) where Company has investment of Rs. 55207 lacs - Expenditure incurred during the construction and incidental for setting up of the project Capital advances and Security Deposits (Non-Current other financial assets) in respect of project (project assets) have been carried forward as ‘Capital Work-in-Process' Capital advances and Security Deposits (Non-Current other financial assets) aggregating Rs. 10804 lacs Rs. 2248 lacs and 3003 lacs respectively. In view of circumstances discussed in the note (read with note no. 10 of accompanying statement) including land being not in possession as stated in the said note the Company (the parent) had requested Uttar Pradesh Power Corporation Limited (UPPCL) to take over the project /company and refund of investment made by it. Further the Company has withdrawn all its undertakings given to UPPCL and lodged a claim of Rs. 115722 lacs. Meanwhile UPERC vide its Order dated 28.06.2019 has allowed the claim of SPGCL for Rs.25137 Lakhs along with interest @ 9% p.a. on Rs.14925 Lakhs for the period from 11.04.2014 to 31.03.2019 and also directed UPPCL to immediately release Performance Bank Guarantee (Rs. 99 crore) to SPGCL and SPGCL to transfer the entire land parcel in their possession to UPPCL. UPPCL has appealed against the said Order in APTEL and SPGCL has also filed counter appeal. Hearing in the case is completed and order is reserved by APTEL. Pending these no provision at this stage has been considered necessary by the management in the carrying value of project assets under non- current assets for impairment. This indicates the existence of a material uncertainty that cast significance doubt on the SPGCL ability to continue as Going concern and accordingly we are unable to comment on the consequential impact if any on the carrying value of such project assets and its impact on the consolidated financial results. Above qualification is appearing since the year ended 31st March 2017. Sangam Power Generation Company Limited (SPGCL a Subsidiary Company) was acquired by JPVL (the Company) from Uttar Pradesh Power Corporation Ltd (UPPCL) in earlier years for implementation of 1320 MW Power Project (Karchana STPP) at Tahsil Karchana Distt. Allahabad Uttar Pradesh. The Company has made investment of Rs.55207 lakhs (5520 lakhs equity shares of Rs. 10/- each fully paid). The Net Worth of SPGCL have been eroded significantly as on 31st December 2019. In view of abnormal delay in handing over the physical possession of land by UPPCL SPGCL has written to UPPCL and all procurers that the Power Purchase Agreement (PPA) is rendered void and cannot be enforced. As advised draft of Share Purchase Agreement (SPA) was sent to UPPCL / UPRVUNL for their approval but there was abnormal delay in resolving the matter by UPPCL therefore SPGCL has withdrawn all its undertakings given to UPPCL and filed a petition before Hon'ble UPERC for release of performance bank guarantee and also for payment amount against claim lodged of Rs 115722 lakh. UPERC vide its Order dated 28.06.2019 has allowed claim (of SPGCL) for Rs.25137 Lakhs along with interest @ 9% p.a. on Rs.14925 Lakhs for the period from 11.04.2014 to 31.03.2019 and also directed UPPCL to immediately release Performance Bank Guarantee (Rs. 99 crore) to SPGCL and SPGCL to transfer the entire land parcel to UPPCL. UPPCL has appealed against the said order in APTEL and SPGCL has also filed counter appeal Order is reserved by APTEL. Pending these no provision has been considered necessary by the management at this stage.

Further the Auditors in their Report on Consolidated Financial Statements had alsogiven Emphasis on certain matters but their opinion the

Report is not modified on these matters. The Emphasis of matter in the ConsolidatedAnnual Audited Financial Statement and Management

Reply thereto was as under:-

Auditors emphasis on matters Management's Reply
a) As Stated in Note no. 46 (i) of the audited consolidated financial statements for the year ended 31st March 2020 no provision has been considered necessary by the management against Entry Tax in respect of Nigrie STPP (including Nigrie Cement Grinding Unit) amounting to Rs. 10656 lacs (previous year Rs. 9074 lacs) and interest thereon (impact unascertainable) as stated in said note. In respect of Nigrie STPP (including Nigrie Cement Grinding Unit) receipts of approval for extension of the time for eligibility for exemption from payment of entry tax is pending from concerned authority as stated in the said notes for which the company has made representations before the concerned authority and management is confident for favourable outcome. Against the entry tax demand till date Rs. 4736 lacs (previous year Rs. 3580 lacs) has been deposited (and shown as part of other non-current assets) which is in the opinion of the management is good and recoverable. The Company has not made provision against Entry Tax in respect of Nigrie Power and Cement unit amounting to Rs. 10656 lacs (Previous year Rs. 9074 lacs) and interest thereon (impact unascertainable). in respect of Nigrie Power and Cement unit receipts of approval for extension of the time for eligibility of exemption from payment of Entry tax is pending from concerned authority for which the company has made representations before the concerned authority and management is confident for favourable outcome. Against the entry tax demand till date Rs.4736lacs ( Previous year Rs. 3580 lacs) has been deposited which in the opinion of the management is good and recoverable.
b) As stated in note no. 57(a) of the audited standalone financial statements for the year ended 31st March 2020 regarding Pending confirmations/reconciliation of balances of secured borrowings confirmation of release of guarantees provided by the Company to the lenders of PPGCL balances with banks including certain fixed deposits trade receivables trade payables (including of micro and small) and others (including capital creditors and of CHAs and receivables/payables from/to related parties) loans & advances and inventory lying with third parties/in transit. In this regard as stated in the note internal control is being strengthen through process automation (including for as stated in note no. 57(b) regarding of fuel procurement and consumption processes which are in process of further strengthening). The management is confident that on confirmation/ reconciliation there will not be any material impact on the state of affairs as stated in said note (this is to be read with footnote no.4 of accompanying financial results Management is in the process of obtaining confirmations/ reconciliation of balances of certain secured borrowings confirmation of release of guarantees provided by the Company to the lenders of PPGCL balances with banks including certain fixed receivables trade payables (including of micro and small) and others (including capital creditors and of CHAs and receivables/payables from/to related parties) loans & advances and inventory lying with third parties/in transit. And internal control is being strengthen through process automation regarding of fuel procurement and consumption processes which are in process of further strengthening. The management is confident that on confirmation/reconciliation there will not be any material impact on the state of affairs as stated in said note.
c) For deferred tax assets on unabsorbed depreciation & business losses and of MAT credit entitlement recognized of amounting to Rs. 29728 lacs (previous year Rs.110194 lacs) and Rs. 22403 lacs (previous year Rs. 27559 lacs) respectively the Management is confident about realisability. Accordingly these have been considered good by the management as stated in Note no. 62 of the audited consolidated financial statements for the year ended 31st March 2020. Though the company has been incurring losses in last few years it expects turnaround of the sector and accordingly Deferred tax assets in respect of unabsorbed depreciation and business losses and MAT credit entitlement have been recognized amounting to Rs. 29728 lakhs and Rs.22 403 lakhs respectively owing to reasonable certainty of availability of future taxable income to realize such assets. Accordingly these have been considered good and no provision there against at this stage is considered necessary in the financial statements.
d) (i) As stated in the Note no. 54 of the consolidated financial statements for the year ended 31st March 2020 Fair value of Jaypee Nigrie Cement grinding unit being in excess as compared to the carrying value of Rs. 25581 lacs as assessed by the management considering the expected future cash flow Also management is of the view that no impairment provision in the carrying amount of fixed assets (including capital work-in-progress) is necessary at this stage considering above stated reason. (i) As assessed by the Management carrying value is lower than fair value (based on valuation done by an expert and future cash flows)therefore the management feel that there is no need to make provision on account of impairment at the stage.
(ii) As stated in the Note no. assets of power plants (JNSTPP 53 of the audited consolidated financial statements for the year ended 31st March 2020 fair value of fixed assets of power plants (JNSTPP and JBTPP) (including Land Building Plant & Machinery capitalized or under CWIP) being in excess as compared to the carrying value as estimated by a technical valuer and for the reasons explained in the said note management is of the view that no impairment provision in the carrying amount of fixed assets (including capital work-in-progress) is necessary at this stage. (ii) In view of fair value for all fixed and JBTPP) (including Land Building Plant & Machinery capitalized or under CWIP) being excess as compared to the carrying value as estimated by a technical valuer and management does not anticipate any impairment amount which is to be provided at this stage in the financial statement for in the value of property plant and equipment(including capital work-in-progress) based on the condition of plant market demand and supply economic and regulatory environment and other factors.
e) (i) As stated in note no. 51(c) of audited consolidated financial statements for the year ended 31st March 2020 regarding accounting/charge to the Statement of Profit & Loss during the year against invocation of pledged shares during earlier year of Prayagraj Power Generation Company Limited (PPGCL an erstwhile subsidiary company shares were pledged by the Company in favour of the lenders of PPGCL). During the preceding quarter on transfer of shares by the lenders in favour of the BUYER accounted for loss as Exceptional Item of amounting to Rs. 160841 lacs (net off loss already accounted for in earlier years in the consolidated financial statements) as explained in the stated note (Footnote no. 5 of the accompanying financial results). (i) In the earlier years shares of PPGCL were pledged with Security Trustee SBI Cap Trustee Company Ltd. (SBI Cap) as collateral security for the financial assistance granted by lenders to PPGCL and same had been invoked on 18th December 2017 due to default in payment of dues to banks/ financial institutions. During the year the lenders have affected change in Management in favour of Renascent Power Ventures Private Limited. Post the stated transfer/sale of shares by the lenders nothing has been realized by the Company on this transaction. The same has been addressed in the Auditor's report and no further explanation is required.
(ii) As stated in note no. 51(b) of audited consolidated financial statements for the year ended 31st March 2020 regarding provision made against diminution in the value of investment in Trust of amounting to Rs.196 529lacs during the year (including Rs.193268 lakhs provided during quarter/period ended 31st December2019) (Footnote no. 7 of the accompanying financial results). (ii) Provision of diminution in value of Rs. 196529 lakhs (including Rs. 193268 lakhs for the quarter/period ended December 31 2019) has accounted for on account of fair valuation of Investment in Trust. The same has been addressed in the Auditor's report and no further explanation is required.
f) Note no. 56 of the audited consolidated financial statements which describes the uncertainties and the impact of Covid-19 pandemic on the Company's operations and results as assessed by the management. Further due to Covid-19 related lock down restrictions management was able to perform year end physical verification of inventory at certain locations subsequent to the year end. Also we were not able to physically observe the verification of inventory that was carried out by the management. Consequently we have performed alternative procedures to audit the existence of Inventory as per the guidance provided in SA-501 “Audit Evidence Specific Considerations for Selected Items” and have obtained sufficient audit evidence(footnote no. 11of accompanying financial results. The management does not see any medium to long term risk in regard to meeting its liabilities as and when they fall due and compliance with dent covenant as applicable. The impact of Covid-19 pandemic will continue to be closely monitored for any material changes.
Our Opinion is not modified for matters stated in para (a) to (f).
g) Uncertainty on the going concern – of Subsidiary Companies: Statutory clearance are pending to take off the projects (JAPL & JMPL) and Management is in the process to initiative the project therefore at this stage financial statements are prepared on going concern basis.
(i) Jaypee Arunachal Power Limited (JAPL) (where Company has investment of Rs.22 852lacs) is waiting for statutory clearances to commence operations and is completely dependent on its holding company for meeting its day to day obligations. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the company's ability to continue as a going concern. However the financial statements of the JAPL have been prepared by the management on a going concern basis [Note no. 64(a) of the audited consolidated financial statements for the year ended 31st March 2020].
(ii) Jaypee Meghalaya Power Limited (JMPL) (where Company has investment of Rs.841 lacs) is waiting for statutory clearances to commence operations and is completely dependent on its holding company for meeting its day to day obligations. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the company's ability to continue as a going concern. However the financialstatements of the JMPL have been prepared by the management on a going concern basis [Note no. 64(b) of the audited consolidated financial statements for the year ended 31st March 2020].
Our opinion on above [(I) to (ii)] is not modified.
h) The statutory auditors in their respective reports for the year ended 31st March 2020 of Sangam Power Generation Company Limited (SPGCL) and Jaypee Meghalaya Power Limited (JMPL) have invited attention to the matter that SPGCL and JMPL are yet to appoint Company Secretaries as required by section 203 of the Companies Act 2013. Our opinion on above is not modified. The Company is in process of appointment of Company Secretary as per the requirement of Section 203 of the Companies Act 2013.

21. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions were done on an arm's length basis and in the ordinarycourse of business. During the year the Company has not entered into any contract/arrangement/ transaction with related parties which could be considered material inaccordance with the policy of the Company on materiality of related party transaction.

The policy on Related Party Transactions as approved by the Board may be accessed onthe 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 Indian AccountingStandard-24 (Ind AS-24) are provided in the accompanying Financial Statements formingpart of this Annual Report. Form AOC-2 pursuant to Section 134 (3)(h) of the CompaniesAct 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 is set out as “Annexure-C”to this Report.

22. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the year under review no significant and material orders impacting the goingconcern status and Company's operations in future have been passed by the Regulators orCourts or Tribunals.

ICICI Bank Limited had filed an application under Section 7 of the Insolvency andBankruptcy Code 2016 for initiating Corporate Insolvency Resolution Process for theCompany with National Company Law Tribunal (NCLT) Ahmedabad Bench at Ahmedabad which waswithdrawn and the withdrawal was allowed by the Hon'ble NCLT Ahemedabad Bench vide itsOrder dated 10th January 2020.

23. EXTRACT OF ANNUAL RETURN

Pursuant to Section 134(3) (a) of the Companies Act 2013 read with notification dated31st July 2018 issued by Ministry of Corporate Affairs Government of India FormNo-MGT-9 which is Extract of the Annual Return for the Financial Year ended 31st March2020 made under provisions of Section 92(3) of the Companies Act 2013 read with Rule12(1) of the Companies (Management and Administration) Rules 2014 is attached with thisAnnual Report as Annexure D.

24. PARTICULARS OF LOANS INVESTMENTS GUARANTEES AND SECURITY

The provisions of Section 186 of the Companies Act 2013 is not applicable to theCompany for being engaged in providing infrastructural facilities. However particulars ofloans given guarantees given and securities provided and investments made under theprovisions of Section 186 of the Companies Act 2013 are given in the Notes to theFinancial Statements.

25. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company is in compliance with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India and approved by the Central Government underSection 118(10) of the Act.

26. RISK MANAGEMENT

Since the company does not fall within top 100 listed entities as per marketcapitalization the provision of SEBI (LODR) Regulations 2015 regarding constitution ofRisk Management Committee are not applicable to the company. However the Company hasdeveloped 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 exposures are identifiedassessed quantified appropriately mitigated minimized managed and critical risks whichimpact the achievement of Company's objective or threatens its existence are periodicallyreviewed.

c) ensures systematic and uniform assessment of risks related with construction andoperations of power projects.

d) assures business growth with financial stability.

27. BUSINESS RESPONSIBILITY REPORT

In terms of Regulation 34 of SEBI (LODR) Regulations 2015 the Company falls within topone thousand listed entities based on market capitalization as on 31st March 2020 assuch a Business Responsibility Report (BRR) is annexed with this Annual Report.

28. CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted Corporate Social Responsibility (CSR) Committee and hasframed a CSR Policy. The brief details of CSR Committee are provided in the Report onCorporate Governance.

The Annual Report on CSR activities as required to be given under Section 135 of theCompanies Act 2013 and Rule 8 of the Companies (Corporate Social Responsibility Policy)Rules 2014 is annexed herewith as “Annexure-E”.

29. PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Second Amendment Rules 2015 (As per notification dated4th September 2015) is annexed to this Report as “Annexure-F”.

30. MATERIAL CHANGES AND COMMITMENTS

In terms of Section 134(3)(l) of the Companies Act 2013 except as disclosed elsewherein this report no material changes and commitments which could affect the Company'sfinancial position which have occurred between the end of the financial year of theCompany to which the financial statements relate and date of the report and there has beenno change in the nature of business

31. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A report on Corporate Governance as stipulated by Regulation 34(3) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 forms part of this AnnualReport along with the required Certificate from the Auditors confirming compliance withthe conditions of Corporate Governance.

As required under Regulation 34(2)(e) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Management Discussion and Analysis Report on theoperations and financial position of the Company has been provided in a separate sectionwhich forms part of this Annual Report.

32. WHISTLE BLOWER POLICY AND VIGIL MECHANISM

As already reported the Board has pursuant to the provisions of Company has in termsof the provisions of Section 177(9) & (10) of the Companies Act 2013 read with Rule 7of the Companies (Meetings of Board and its Powers) Rules 2014 and Regulation 22 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 formulatedWhistle Blower Policy and Vigil Mechanism for Directors and employees under whichprotected disclosures can be made by a whistle blower and provide for adequate safeguardsagainst victimization of Director(s) or employees(s) or any other person who avail themechanism.

The Company believes in the conduct of the affairs of its constituents in a fair andtransparent manner by adopting highest standards of professionalism integrity and ethicalbehavior.

The Vigil Mechanism - cum - Whistle Blower Policy may be accessed on the Company'swebsite at the link: http:// jppowerventures.com/wp-content/uploads/2016/03/Vigil-Mechanism-cum-Whistle-Blower-Policy.pdf

33. INTERNAL FINANCIAL CONTROLS

The Internal Financial Controls with reference to financial statements as designedand implemented by the Company are adequate. During the year under review no material orserious observation has been received from the Internal Auditors of the Company forinsufficiency or inadequacy of such controls.

The details pertaining to internal financial controls and their adequacy have beendisclosed in the Management Discussion & Analysis Report forming part of this Report.

34. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

a) Statement showing details of employees as required under Section 197(12) of theCompanies Act 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 has been provided in Annexure-G(I) whichforms part of this Report.

b) Information pertaining to remuneration to be disclosed by listed companies in termsof Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 have been provided in Annexure-G(II)which forms part of this Report.

35. ACKNOWLEDGEMENTS

The Board places on record its sincere appreciation and gratitude to variousDepartments and Undertakings of the Central Government various State Governments UPPCLMPPMCL APTEL CERC UPERC MPERC Financial Institutions Banks Rating Agencies fortheir continued co-operation and support to the Company. The Board sincerely acknowledgesthe hard work dedication and commitment of the employees and the faith & confidencereposed by the shareholders in the Company.

For and on behalf of the Board
MANOJ GAUR
Place : New Delhi Chairman
Date : 26th May 2020 [DIN: 00008480]

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