Your Directors present the 27th Annual Report and the Audited FinancialStatements for the financial year ended March 31 2021.
The performance of the Company (Consolidated and Standalone) for the financial yearended March 31 2021 is summarised below:
|Particulars || |
Financial Year ended March 31 2021
Financial Year ended March 31 2020
| ||(Consolidated) ||(Standalone) ||(Consolidated) ||(Standalone) |
|Total Income ||838860 ||52212 ||820241 ||33942 |
|Profit / (Loss) Before Tax ||43903 ||5534 ||(424782) ||(38884) |
|Less: Provision for Taxation (Net) ||(1491) ||- ||2366 ||- |
|Profit / (Loss) After Tax ||45394 ||5534 ||(427148) ||(38884) |
During the year under review the Board of Directors has not recommended dividend onthe Equity Shares of the Company. The Dividend Distribution Policy as approved by theBoard may be accessed on the Company's website at the link https://www.reliancepower.co.in/documents/2181716/2364859/ Dividend_Distribution_Policy_RPower.pdf
During the year 2020-21 all the operating plants of the Company which are functioningthrough its subsidiary companies were available for generation above 90% across the yearand performed exceedingly well on efficiency parameters.
The Company's Sasan Ultra Mega Power Plant (UMPP) (Capacity 3960 MW) generated 33388Million Units (MUs) and retained its leadership position of best operating plant in Indiafor third year in a row across all thermal power plants in the country with a Plant LoadFactor (PLF) of 96.25% against an all India average of ~ 53.4%.
The Sasan UMPP is the World's largest integrated power plant with the Moher and MoherAmlohri Extension captive coal mines meeting the fuel requirements of the plant. Duringthe year Sasan Coal Mine handled 84.57 Million BCM including the Overburden at 72.2Million BCM making it the biggest mine in the country in terms of the overall volumehandled. The Rosa Thermal Power plant (1200 MW) generated 6751 MUs during the currentyear delivering the consistent Year-on-Year performance. The Rosa power plant receivedprestigious accolades and awards from prestigious Institutions for excellence in safetyCSR and best Energy Management. The Butibori Thermal plant (600 MW) remained out ofoperation during the year and the company is working on a resolution plan.
The Solar PV (40 MW) Plant generated 59.76 MUs during the year. The Solar CSP (100 MW)plant generated 77.63 MUs.
The Company's Wind farm at Vashpet in Sangli District of Maharashtra achieved annualgeneration of 63.76 MUs during the year.
718 MW (net) Gas-based Project in Bangladesh
Reliance Bangladesh LNG and Power Limited (RBLPL) is setting up the 718 MW (net) Powerplant at Meghnaghat near Dhaka in Bangladesh together with the strategic partner JERAPower International (Netherlands) - a subsidiary of JERA Co. Inc. (Japan). The projectsecured necessary financing from a group of lenders including Japan Bank for InternationalCooperation and Asian Development Bank and achieved Financial Closure in February 2021.Samalkot Power Limited concluded the arrangements for sale of one module equipment for thesaid Gas-based project in Bangladesh and received the approval from US Exim Bank. Thenecessary export approvals were secured and the physical export of equipment from Indiastarted in March 2021.
Impact of COVID-19 Pandemic
COVID-19 has impacted businesses globally and in India. The Company has continued itsassessment of likely adverse impact of COVID-19 on economic environment and business &financial risks. The Company is in the business of generation of electricity which is anessential service as emphasized by the Ministry of Power Government of India. Despitefacing challenges posed by the pandemic the Company has ensured the availability of itspower plants to generate power and honour commitments made under various power purchaseagreements. However there exists uncertainty over long-term impact of COVID19pandemic on future business performances arising from among other things any action tocontain its spread or mitigate its impact whether government-mandated or elected by theCompany and its evolving impact on its customers i.e. distribution utilities in terms ofdemand for electricity; consumption mix; resultant average tariff realization; billcollections from consumers; subsidy support from respective State Governments who arefaced with sharp fall in tax revenues and liquidity support from banks & financialinstitutions including those focused on power sector financing. This in turn impactsGeneration entities in terms of demand and challenges in ensuring timely collections. Thedemand for electricity which contracted due to lockdown measures imposed to containspread of COVID19 pandemic has nearly bounced back to normal levels in keeping withthe resumption of economic activities since easing of lockdown in various States. Giventhe experience of sustaining its operations successfully during the pandemic year theCompany is
13 confident of another year of successful operations with the support from its powerprocurers and other stakeholders.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as stipulatedunder Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (the Listing Regulations') is presented in aseparate section forming part of this Annual Report.
Resources and Liquidity
The Company has delayed/defaulted in repayment to its lenders. The Company has been indiscussion with its lenders for resolution. The Company is confident of meeting itsobligations by generating sufficient and timely cash flows through time bound monetisationof its assets and also realizing regulatory receivables/arbitration claims.Notwithstanding the dependence on these material uncertain events the Company isconfident that such cash flows would enable it to service its debt and discharge itsliabilities in the normal course of its business.
The Company has not accepted any deposits from the public which comes within thepurview of Section 73 of the Companies Act 2013 (hereinafter referred to as theAct') read with the relevant Rules made thereunder.
Particulars of Loans Guarantees or Investments
Pursuant to the provisions of Section 186 of the Act the details of Investments madeare provided in the standalone financial statements under Note No. 3.3(a). The Company hascomplied with provisions of Section 186 of the Act to the extent applicable with respectto Loans Guarantees or Investments during the year.
Subsidiary and Associate Companies
As on March 31 2021 the Company had 36 subsidiaries under its fold. During the yeartwo companies i.e Reliance Bangladesh LNG and Power Limited and Reliance Bangladesh LNGTerminals Limited ceased to be subsidiaries of the Company.
The Company had the following Associate Companies as on March 31 2021:
1. RPL Sun Power Private Limited
2. RPL Photon Private Limited
3. RPL Sun Technique Private Limited
The operating and financial performance of the major subsidiary companies has beencovered in the Management Discussion and Analysis Report forming part of this AnnualReport. The financial results of the subsidiary companies have been consolidated withthose of the parent company. The Company's policy for determining material subsidiariesas approved by the Board may be accessed on the Company's website at the linkhttps://www.reliancepower.co.in/ documents/2181716/2364859/Policy_for_Determining_Material_Subsidiary-new.pdf
Financial Statements - Application of the Companies (Indian Accounting Standards)Rules 2015
The audited financial statements of the Company drawn up both on standalone andconsolidated basis for the financial year ended March 31 2021 are in accordance withthe requirements of the Companies (Indian Accounting Standards) Rules 2015 ("Ind ASRules").
Consolidated Financial Statements
The Audited Consolidated Financial Statements for the financial year ended March 312021 have been prepared in accordance with the Ind AS Rules and relevant provisions ofthe Act from the duly approved Financial Statements of Subsidiaries and Associates bytheir respective Board of directors.
During the period under review Smt. Rashna Khan Shri K Ravikumar and Shri D J Kakaliahave completed their term as Independent Directors of the Company on September 25 2020.
The Board of Directors place on record their sincere appreciation for the outstandingcontribution made by Smt. Rashna Khan Shri K Ravikumar and Shri D J Kakalia during theirtenure of association with the Company.
Consequent to the above the Company proposes to appoint Smt. Chhaya Virani Shri BimalJulka and Shri Vijay Kumar Sharma as Independent Directors to hold office from September26 2020 for a term of five consecutive years. The Company has received a notice inwriting from member under Section 160 of the Act proposing the candidature of Smt. ChhayaVirani Shri Bimal Julka and Shri Vijay Kumar Sharma for the office of Director of theCompany. Based on the recommendation of Nomination and Remuneration Committee the Boardconsidered integrity expertise and experience of Smt. Chhaya Virani Shri Bimal Julka andShri Vijay Kumar Sharma and appointed them as Additional Direcor in the capacity ofIndependent Director subject to the approval of the members of the Company.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of Independence as prescribed under the Actand the Listing Regulations.
The details of programme for familiarisation of Independent Directors with the Companynature of the industry in which the Company operates and related matters are uploaded onthe website of the Company at the link: https://www.reliancepower.co.in/documents/2181716/2364859/RPower_Familiarization_Programme_2020_21.pdf
Key Managerial Personnel (KMP)
Shri K. Raja Gopal Whole-time Director and Chief Executive Officer Shri SandeepKhosla Chief Financial Officer and Shri Murli Manohar Purohit Company Secretary andCompliance Officer are the Key Managerial Personnel (KMP).
Evaluation of Directors Board and Committees
The Nomination and Remuneration Committee (NRC) of the Board of the Company has deviseda policy for performance evaluation of the individual directors Board and its Committeeswhich includes criteria for performance evaluation.
Pursuant to the provisions of the Act and Regulation 17(10) of the Listing Regulationsthe Board has carried out an annual performance evaluation of its own performance and thedirectors as well as Committees of the Board. The Board's performance was evaluated basedon inputs received from all the Directors after considering criteria such as Board'scomposition and structure effectiveness of the Board performance of the Committeesprocesses and information provided to the Board etc.
The performance of the committees was evaluated by the Board of Directors based oninputs received from all the committee members after considering criteria such ascomposition and structure of committees effectiveness of committee meetings etc.
Pursuant to the Listing Regulations performance evaluation of independent directorswas done by the entire board excluding the independent director being evaluated The NRChas also reviewed the performance of the individual Directors based on their knowledgelevel of preparation and effective participation in meetings understanding of their rolesas directors etc.
Policy on Appointment and Remuneration for Directors Key Managerial Personnel andSenior Management Employees
The NRC of the Board has devised a policy for selection appointment and remunerationof Directors Key Managerial Personnel and Senior Management Employees. The Committee hasalso formulated the criteria for determining qualifications positive attributes andindependence of Directors. The Policy can be accessed on the Company's website athttps://www. reliancepower.co.in/documents/2181716/2364859/Policy_on_appointment_remuneration_for_Directors_KMP_and_ Senior_Management_Employees.pdf
Directors' Responsibility Statement
Pursuant to the requirements under Section 134(5) of the Act with respect to Directors'Responsibility Statement it is hereby confirmed that:
i. In the preparation of the annual financial statement for the financial year endedMarch 31 2021 the applicable Accounting Standards had been followed along with properexplanation relating to material departures if any;
ii. The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2021 and of the Profit ofthe Company for the year ended on that date;
iii. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
iv. The Directors had prepared the annual financial statements for the financial yearended March 31 2021 on a going concern' basis;
v. The Directors had laid down internal financial controls to be followed by theCompany and such internal financial controls are adequate and are operating effectively;and
vi. The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Contracts and Arrangements with Related Parties
All contracts arrangements transactions entered into by the Company during thefinancial year under review with related parties were at an arm's length basis and in theordinary course of business. There were no materially significant related partytransactions made by the Company with Promoters Directors Key Managerial Personnel orother designated persons which could have potential conflict with the interest of theCompany at large.
During the year the Company has not entered into any contract/ arrangement/transactionwith related parties which could be considered material in accordance with the policy ofCompany on materiality of related party transactions (transactions where the valueinvolved exceeds 10% of the Company's consolidated gross income or 10% of the Company'sconsolidated net worth whichever is higher) or which is required to be reported in FormAOC 2 in terms of section 134 (3)(h) read with Section 188 of the Act and Rule 8(2)of the Companies (Accounts) Rules 2014.
All Related Party Transactions were placed before the Audit Committee for approval.Prior omnibus approval of the Audit Committee was obtained for the transactions whichwere of a repetitive nature. The transactions entered into pursuant to the omnibusapproval so granted were reviewed and statements giving details of all related partytransactions were placed before the Audit Committee on a quarterly basis. The policy onRelated Party Transactions as approved by the Board can be accessed on the Company'swebsite at the link https:// www.reliancepower.co.in/documents/2181716/2364859/Policy_for_Related_Party_Transaction-new.pdf Your Directors draw attention of the membersto Note no. 11 to the financial statement which sets out related party disclosurespursuant to Ind-AS and Schedule V of Listing Regulations.
Material Changes and Commitments if any affecting the financial position of theCompany
There were no material changes and commitments affecting the financial position of theCompany which have occurred between the close of the financial year till the date of thisReport.
Meetings of the Board
A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe year four Board Meetings were held details of meetings held and attended by eachDirector are given in the Corporate Governance Report.
Audit Committee of the Board consists of Independent Directors namely Smt. ChhayaVirani Shri Bimal Julka and Shri Vijay Kumar Sharma. During the year all therecommendations made by the Audit Committee were accepted by the Board.
Auditors and Auditors' Report
M/s. Pathak H.D. & Associates LLP Chartered Accountants who were appointed asstatutory auditors of the Company to hold office for a term of 5 (five) consecutive yearsat the 22nd Annual General Meeting (AGM) of the Company held on September 272016 would be completing their first term of appointment upon conclusion of the 27thAGM of the Company.
The Board on recommendation of the Audit Committee has proposed the re-appointment ofM/s. Pathak H.D. & Associates LLP Chartered Accountants as the Statutory auditors ofthe Company for another consecutive term of 5 (five) years until the conclusion of 32ndAGM of the Company subject to approval of Members in ensuing AGM.
The Company has received letter from M/s. Pathak H.D.
& Associates LLP Chartered Accountants that they are not disqualified fromcontinuing as the Auditors of the Company. The Auditors in their report of ConsolidatedFinancial Statements have given a qualified opinion vide para 1 2 and 3 of their report.In this connection it is stated that Vidarbha Industries Power Limited (VIPL) hassubmitted debt resolution plans on various occasions to its lenders and same is beingpursued with the lenders. VIPL is confident of an early resolution including proposedwaiver of outstanding interest to its lenders. In view of this interest has not beenprovided and same shall be considered basis the outcome of debt resolution with itslenders. VIPL is hopeful of resolution of material uncertain events including thesecuritization of its regulatory receivables which would provide the necessary liquidityto make the debt service current and support sustainable plant operations going forward.VIPL is also hopeful of resolving NCLT application filed by one of the lender as VIPL isin discussion with its lenders for a resolution outside the Corporate InsolvencyResolution Process. Further Sasan Power Limited and Dhursar Solar Power Private Limitedhave been legally advised that the clarification issued and observation inter-alia maderegarding method of estimating depreciation adopted for preparing standalone financialstatements of the subsidiaries and for preparing consolidated financial statements by IndAS Transition Facilitation Group of Ind AS Implementation Committee of the Institute ofChartered Accountants of India will not be applicable to it as the Company has beenfollowing different methods of depreciation in subsidiaries and in Consolidated FinancialStatements since inception and as required by Ind AS 101 read with Ind AS 16 has continuedthe methods of providing depreciation even under Ind AS regime. The Parent Companyaccordingly continued to provide depreciation in its Consolidated Financial Statements bystraight line method which is different as compared to the written down value methodconsidered appropriate by two of its subsidiaries.
The other observations and comments given by the Auditors in their report readtogether with notes on financial statements are self explanatory and hence do not call forany further comments under section 134 of the Act.
No fraud has been reported by the Auditor to the Audit Committee or the Board.
Pursuant to the provisions of the Act and the Companies (Audit and Auditors) Rules2014 the Board of Directors have appointed M/s. V.J. Talati & Co. Cost Accountantsas the Cost Auditors in respect of its 45 MW Wind Farm Power Project at Vashpet Dist.Sangli Maharashtra for the financial year ending March 31 2022 subject to theremuneration being ratified by the shareholders at the ensuing AGM of the Company.
The Provisions of Section 148(1) of the Act are applicable to the Company andaccordingly the Company has maintained cost accounts and records in respect of theapplicable products for the year ended March 31 2021.
During the year under review the Company has complied with the applicable SecretarialStandards issued by The Institute of Company Secretaries of India (ICSI).
Secretarial Audit & Secretarial Compliance Report
Pursuant to the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorshad appointed M/s. Ajay Kumar & Co. Company Secretaries in Practice to undertake theSecretarial Audit of the Company. There is no qualification reservation or adverse remarkmade by the Secretarial Auditor in the Secretarial Audit Report for the financial yearended March 31 2021. The Audit Report of the Secretarial Auditors of the Company and itsmaterial subsidiaries for the financial year ended March 31 2021 are attached hereto asAnnexure A A1and A2.
Pursuant to Regulation 24A of the Listing Regulations the Company has obtained AnnualSecretarial Compliance Report from a Practicing Company Secretary on compliance of allapplicable SEBI Regulations and circulars/ guidelines issued there under and copy of thesame were submitted to the Stock Exchanges within the prescribed due date.
As required under Section 134(3)(a) of the Act the Annual Return for the financialyear 2020-21 is uploaded on the Company's website and can be accessed at http:// www.reliancepower.co.in.
Particulars of Employees and Related Disclosures
In terms of the provisions of Section 197(12) of the Act read with Rule 5(2) & 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended a statement showing the names and other particulars of the employees drawingremuneration in excess of the limits set out in the said Rules are provided in the AnnualReport which forms part of this report.
Disclosures relating to the remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 as amended also form part of this Annual Report.
However having regard to the provisions of second proviso to Section 136(1) of theAct the Annual Report excluding the aforesaid information is being sent to all themembers of the Company and others entitled thereto. The said information is open forinspection and any member interested in obtaining the same may write to the CompanySecretary and will be furnished on request.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars as required to be disclosed in terms of Section 134(3)(m) of the Actread with Rule 8 of the Companies (Accounts) Rules 2014 are given in Annexure Bforming part of this Report.
The Company has adopted Reliance Group-Corporate Governance Policies and Code ofConduct' which sets out the systems processes and policies conforming to theinternational standards. The report on Corporate Governance as stipulated under Regulation34(3) read with para C of Schedule V of the Listing Regulations is presented in a separatesection forming part of this Annual Report.
A certificate from the Practicing Company Secretaries M/s. Ajay Kumar & Co.conforming compliance to the conditions of Corporate Governance as stipulated under Para Eof Schedule V to the Listing Regulations is enclosed to this Report.
Whistle Blower (Vigil Mechanism)
In accordance with Section 177 of the Act and the Listing Regulations the Company hasformulated a Vigil Mechanism to address the genuine concerns if any of the Directors andemployees the policy has been overseen by the Audit Committee. The details of the samehave been stated in the Report on Corporate Governance and the policy can also be accessedon the Company's website http://www. reliancepower.co.in.
The Company continues to have a robust Business Risk Management framework to identifyevaluate business risks and opportunities. The Risk Management Committee (RMC) comprisesof Directors and senior managerial personnel. This framework aims at transparency tominimize the adverse impact if any on the business objectives and enhances the Company'scompetitive advantage. The business risk framework defines the risk management approachincluding documentation and reporting at various levels across the enterprise. Theframework has different risk models which help in identifying risk trends exposure andpotential impact analysis at each business segment as well as Company level. The risks areassessed for each project and mitigation measures are initiated both at the project aswell as the corporate level. More details on Risk Management indicating development andimplementation of Risk Management policy including identification of elements of risk andtheir mitigation are covered in Management Discussion and Analysis section which formspart of this Report.
The details of the RMC and its terms of reference etc. are set out in the CorporateGovernance Report forming part of this Report.
Compliance with provisions of Sexual Harassment of Women at workplace (PreventionProhibition and Redressal) Act 2013
The Company is committed to protect and maintain the dignity of women employees and ithas in place a policy for the prevention and redressal of such complaints to ensure theprotection against Sexual Harassment of Women at workplace. During the year under reviewno such complaint was received. The Company has also constituted an Internal ComplianceCommittee under the Sexual Harassment of Women at workplace (Prevention Prohibition andRedressal) Act 2013.
Corporate Social Responsibility
The Company has constituted Corporate Social Responsibility (CSR) Committee incompliance with the Section 135 of the Act read with the Companies (Corporate SocialResponsibility Policy) Rules 2014. The CSR Committee has formulated a Corporate SocialResponsibility Policy (CSR policy) indicating the activities to be undertaken by theCompany.
The CSR policy may be accessed on the Company's website at the linkhttps://www.reliancepower.co.in/ documents/2181716/2359750/CSR_Policy.pdf As on March 312021 the CSR Committee of the Board consist of Shri Bimal Julka as Chairperson SmtChhaya Virani Shri Vijay Kumar Sharma and Shri K Raja Gopal Directors as members.
The disclosures with respect to CSR activities forming part of this report is given asAnnexure - C.
Orders if any passed by Regulators or Courts or Tribunals
No orders have been passed by the Regulators or Courts or Tribunals which impact thegoing concern status of the Company and its operations.
Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls with reference tofinancial statement across the organisation. The same is subject to review periodically bythe internal audit cell for its effectiveness. During the financial year such controlswere tested and no reportable material weaknesses in the design or operations wereobserved. The Statutory Auditors of the Company also test the effectiveness of InternalFinancial Controls in accordance with the requisite standards prescribed by ICAI. Theirexpressed opinion forms part of the Independent Auditor's report.
Business Responsibility Report
Business Responsibility Report for the year under review as stipulated under ListingRegulations is presented in a separate section forming part of this Annual Report.
During the year under review there were no reportable events in relation to issue ofequity shares with differential rights as to dividend voting or otherwise issue of sweatequity shares to its Directors or Employees proceedings pending under the Insolvency andBankruptcy Code 2016 and one-time settlement with any Bank or Financial Institution.
Your Directors would like to express their sincere appreciation for the cooperation andassistance received from shareholders debenture holders debenture trustee bankersfinancial institutions regulatory bodies and other business constituents during the yearunder review. Your Directors also wish to place on record their deep sense of appreciationfor the commitment displayed by all executives officers and staff.
| ||For and on behalf of the Board of Directors |
| ||Anil Dhirubhai Ambani |
| ||Chairman |
|Mumbai || |
|May 07 2021 || |