Your Directors present the 26th Annual Report and the audited accounts for the financial year ended March 31 2020.
The performance of the Company (Consolidated and Standalone) for the financial year ended March 31 2020 is summarised below:
|Rs in lakhs|
|Particulars ||Financial Year ended March 31 2020||Financial Year ended March 31 2019|
|Profit / (Loss) Before Tax||(424782)||(38884)||(293404)||(61418)|
|Less: Provision for Taxation (Net)||2366||-||1778||(1252)|
|Profit / (Loss) After Tax||(427148)||(38884)||(295182)||(60166)|
During the year under review the Board of Directors has not recommended dividend on the Equity Shares of the Company.
During the year 2019-20 all the operating plants of the Company which are functioning through its subsidiary companies were available for generation above 90 % across the year and performed exceedingly well on efficiency parameters.
The Company's Sasan Ultra Mega Power Plant (UMPP) (Capacity 3960 MW) generated 33341 Million Units (MUs) and was ranked No. 1 for the second successive year across all thermal power plants in the country with a Plant Load Factor (PLF) of 95.85% against an all India average of 56%. The Sasan UMPP is the World's largest integrated power plant with the Moher and Moher Amlohri Extension captive coal mines meeting the fuel requirements of the plant. During the year Sasan Coal Mine handled 87.1 Million CuM including the Overburden at 74.6 Million CuM making it the biggest mine in the country in terms of the overall volume handled. Sasan mine received 13 prestigious awards across various categories including the one received for the best mining and maintenance practices.
The Rosa Thermal Power plant (1200 MW) generated 6041 MUs during the current year delivering the consistent Year on Year performance. The Rosa power plant received prestigious accolades and awards from prestigious Institutions for excellence in environment safety CSR quality and best Operation & Maintenance Practices including the prestigious International safety award from British Safety Council for the year 2020.
The Butibori Thermal plant (600 MW) remained out of operation during the year and company is working on a resolution plan to make the plant operational as soon as possible.
The Solar PV (40 MW) Plant generated 59 MUs during the year. The Solar CSP (100 MW) plant generated 81 MUs and achieved several operating milestones including achievement of peak load of 122.5 MW during the year.
The Company's Wind farm at Vashpet in Sangli District of Maharashtra achieved highest ever annual generation of 87 MUs during the year.
Proposed 718 MW (net) Gas-based Project in Bangladesh
Reliance Bangladesh LNG and Power Limited (RBLPL) the subsidiary of the Company concluded the long-term power purchase agreement (PPA) and other project agreements for 718 MW (net) Power plant at Meghnaghat near Dhaka in Bangladesh. Reliance also inducted a strategic partner JERA Power International (Netherlands) - a subsidiary of JERA Co. Inc. (Japan) to invest 49% equity in the project. Samalkot Power Ltd. has signed an Equipment Supply Contract on March 11 2020 to sell Equipments of one module for the said Gas-based project in Bangladesh.
Impact of COVID-19 Pandemic
COVID-19 Pandemic has caused unprecedented economic disruption globally and in India. The Company is sensitive about the impact of the Pandemic not only on the human life but on businesses and industrial activity across the globe which will be realised only over next few months. The Company has been monitoring the situation closely and has taken proactive measures to comply with various directions / regulations / guidelines issued by the Government and local bodies to ensure safety of workforce across all its plants and offices. The Company has made initial assessment of the likely adverse impact on economic environment in general and operational and financial risks on account of COVID-19. Vide notification dated March 24. 2020 issued by Ministry of Home Affairs a nation-wide lockdown was announced to contain COVID-19 outbreak and the same has been progressively extended later. However Power generation transmission & distribution units being essential services are allowed to continue operation during the period of lockdown. So far the Company has been able to sustain its power plant operations and honour commitments under the various Power Purchase Agreements. There has been a sharp decline in the electricity demand by 20 to 25% primarily from industrial and commercial consumer segments arising from lockdown measures announced by the Government. The Power Ministry has clarified on April 6 2020 that despite lower power offtake due to sharp reduction in demand Discoms will have to comply with the obligation to pay fixed capacity charges as per PPA. Further the Reserve Bank of India has granted relief to borrowers by way of moratorium of interest and principal installments falling due to Indian banks and financial institutions till May 31 2020. The extent to which the COVID-19 pandemic will impact the Company's results will depend on future developments which are highly uncertain including among other things evolving impact on Discoms in terms of demand for electricity; consumption mix; resultant average tariff realisation; bill collections from consumers; and support from respective State Governments and banks & financial institutions including those focused on power sector financing.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 (the `Listing Regulations') is presented in a separate section forming part of this Annual Report.
Non-Convertible Debentures (NCDs)
The Company has not carried out any fresh issue of NCDs in the current financial year. The Company has Listed Secured NCDs aggregating to ` 79500 lakhs outstanding as on March 31 2020 and as on that date there was default in the payment of interest to the extent of ` 8479 lakhs.
Resources and Liquidity
The Company has incurred losses during the year resulting in delay/default in repayment to its lenders. The Company has been in discussion with its lenders for resolution. The Company is confident of meeting its obligations by generating sufficient and timely cash flows through time bound monetisation of its assets as also realize amount from regulatory / arbitration claims. Notwithstanding the dependence on these material uncertain events the Company is confident that such cash flows would enable it to service its debt and discharge its liabilities in the normal course of its business.
The Company has not accepted any deposits from the public which comes within the purview of Section 73 of the Companies Act 2013 (hereinafter referred to as `the Act') read with the relevant Rules made thereunder.
Particulars of Loans Guarantees or Investments
Pursuant to the provisions of Section 186 of the Act the details of Investments made are provided in the standalone financial statements under Note 3.3(a). The Company has complied with provisions of Section 186 of the Act to the extent applicable with respect to Loans Guarantees or Investments during the year.
Subsidiary and Associate Companies
As on March 31 2020 the Company had 38 subsidiaries under its fold. During the year Six Companies i.e. Amulin Hydro Power Private Limited Emini Hydro Power Private Limited Mihundon Hydro Power Private Limited Sumte Kothang Hydro Power Private Limited Lara Sumta Hydro Power Private Limited and Purthi Hydro Power Private Limited ceased to be the subsidiaries of the Company in view of their amalgamation with Reliance Cleangen Limited.
The Company had the following Associate Companies as on March 31 2020: 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 been covered in the Management Discussion and Analysis Report forming part of this Annual Report. The financial results of the subsidiary companies have been consolidated with those of the parent company. The Company's policy for determining material subsidiaries as approved by the Board may be accessed on the Company's website at the link https://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 and consolidated basis for the financial year ended March 31 2020 are in accordance with the requirements of the Companies (Indian Accounting Standards) Rules 2015 (Ind AS Rules).
Consolidated Financial Statements
The Audited Consolidated Financial Statements for the financial year ended March 31 2020 have been prepared in accordance with the Ind AS Rules and relevant provisions of the Act from the duly approved Financial Statements of subsidiaries and Associates by their respective Board of directors.
During the year under review the Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence as prescribed under the Act and the Listing Regulations.
The details of programme for familiarisation of Independent Directors with the Company nature of the industry in which the Company operates and related matters are uploaded on the website of the Company at the link: https://www.reliancepower. co.in/web/reliance-power/corporate-governance.
In terms of the provision of the Act Shri Sateesh Seth (DIN: 00004631) Director of the Company retires by rotation and being eligible offers himself for re-appointment at the ensuing AGM. A brief resume of Shri Sateesh Seth along with requisite details as stipulated under regulation 36(3) of the Listing Regulations is given in the section on Corporate Governance Report forming part of this Annual Report.
Key Managerial Personnel (KMP).
Shri Shrenik Vaishnav has resigned as the Chief Financial Officer (CFO) of the Company with effect from March 31 2020 from the close of business hours.
Shri Sandeep Khosla has been appointed as the CFO with effect from April 1 2020.
Evaluation of Directors Board and Committees
The Nomination and Remuneration Committee (NRC) of the Board of the Company has devised a policy for performance evaluation of the individual directors Board and its Committees which includes criteria for performance evaluation.
Pursuant to the provisions of the Act and Regulation 17(10) of the Listing Regulations the Board has carried out an annual performance evaluation of its own performance and the directors as well as Committees of the Board. The Board's performance was evaluated based on inputs received from all the Directors Board's composition and structure effectiveness of the Board performance of the Committees processes and information provided to the Board etc. The NRC has also reviewed the performance of the individual Directors based on their knowledge level of preparation and effective participation in meetings understanding of their roles as directors etc.
Policy on Appointment and Remuneration for Directors Key Managerial Personnel and Senior Management Employees
The NRC of the Board has devised a policy for selection appointment and remuneration of Directors Key Managerial Personnel and Senior Management Employees. The Committee has formulated the criteria for determining the qualifications positive attributes and independence of Directors which has been put up on the Company's website http://www. reliancepower.co.in. and the same is also attached as Annexure - A.
Directors' Responsibility Statement
Pursuant to the requirements under Section 134(5) of the Act with respect to Directors' Responsibility Statement it is hereby confirmed that:
i. In the preparation of the annual financial statement for the financial year ended March 31 2020 the applicable Accounting Standards had been followed along with proper explanation relating to material departures if any;
ii. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31 2020 and of the loss of the Company for the year ended on that date;
iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. The Directors had prepared the annual financial statements for the financial year ended March 31 2020 on a `going concern' basis;
v. The Directors had laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and are operating effectively; and
vi. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Contracts and Arrangements with Related Parties
All contracts / arrangements / transactions entered into/ by the Company during the financial year under review with related parties were at an arm's length basis and in the ordinary course of business. There were no materially significant related party transactions which could have potential conflict with the interest of the Company at large.
All Related Party Transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee on a quarterly basis. The policy on Related Party Transactions as approved by the Board has been uploaded on the Company's website at the link https:// www.reliancepower.co.in/documents/2181716/2364859/ Policy_for_Related_Party_Transaction-new.pdf.
Your Directors draw attention of the members to Note no. 11 to the financial statement which sets out related party disclosures.
Material Changes and Commitments if any affecting the financial position of the Company
There were no material changes and commitments affecting the financial position of the Company which have occurred between the close of the financial year till the date of this Report.
Meetings of the Board
The Company held four board meetings during the year the details of meetings and their respective attending Directors are given in the Corporate Governance Report.
Audit Committee of the Board consists of Independent Directors namely Shri K Ravikumar (Chairman) Shri D.J. Kakalia and Smt. Rashna Khan. During the year all the recommendations made by the Audit Committee were accepted by the Board.
Auditors and Auditors' Report
M/s. Pathak H.D. & Associates LLP Chartered Accountants was appointed as the Auditors of the Company for a term of 5 (five) consecutive years at the AGM of the Company held on September 27 2016. The Company has received letter from M/s. Pathak H.D. & Associates LLP Chartered Accountants that they are not disqualified from continuing as the Auditors of the Company.
The Auditors in their report of Consolidated Financial Statements have given a qualified opinion in response to which the Company stated that it has been legally advised that the clarification issued and observation inter-alia made regarding method of estimating depreciation adopted for preparing standalone financial statements of the subsidiaries and for preparing consolidated financial statements by Ind AS Transition Facilitation Group (ITFG) of Ind AS Implementation Committee of the Institute of the Chartered Accountants of India (the ICAI) will not be applicable to it as the Company has been following different methods of depreciation in subsidiaries and in Consolidated Financial Statements since inception and as required by Ind AS 101 read with Ind AS 16 has continued the methods of providing depreciation even under Ind AS regime. The Parent Company accordingly continued to provide depreciation in its Consolidated Financial Statements by straight line method which is different as compared to the written down value method considered appropriate by two of its subsidiaries.
The other observations and comments given by the Auditors in their report read together with notes on financial statements are self explanatory and hence do not call for any further comments under section 134 of the Act.
Pursuant to the provisions of the Act and the Companies (Audit and Auditors) Rules 2014 the Board of Directors have appointed M/s. V. J. Talati & Co. Cost Accountants as 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 2021 subject to the remuneration 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 and accordingly the Company has maintained cost accounts and records in respect of the applicable products for the year ended March 31 2020.
During the year under review the Company has complied with the applicable Secretarial Standards 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 has appointed M/s. Ajay Kumar & Co. the Company Secretaries in Practice to undertake the Secretarial Audit of the Company.
There is no qualification reservation or adverse remark made by the Secretarial Auditor in the Secretarial Audit Report except for delay in filing of the financial results for the quarter and financial year ended March 31 2019 within specified date due to unavailability of some directors because of indisposition / other unavoidable reasons.
The Report of the Secretarial Auditor is attached herewith as Annexure - B.
As required under Section 134(3)(a)of the Act the Annual Returns for the financial years 2018-19 and 2019-20 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 as amended a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annual Report which forms part of this report.
Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended also form part of this Annual Report.
However having regard to the provisions of first proviso to Section 136(1) of the Act the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The said information is open for inspection and any member interested in obtaining the same may write to the Company Secretary 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 Act read with Rule 8 of the Companies (Accounts) Rules 2014 are given in Annexure - C forming part of this Report.
The Company has adopted `Reliance Group-Corporate Governance Policies and Code of Conduct' which sets out the systems processes and policies conforming to the international standards. The report on Corporate Governance as stipulated under Regulation 34(3) read with para C of Schedule V of the Listing Regulations is presented in a separate section forming part of this Annual Report.
A certificate from the Practicing Company Secretaries M/s. Ajay Kumar & Co. conforming compliance to the conditions of Corporate Governance as stipulated under Para E of 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 has formulated a Vigil Mechanism to address the genuine concerns if any of the Directors and employees the policy has been overseen by Audit Committee. The details of the same have been stated in the Report on Corporate Governance and the policy can also be accessed on the Company's website http://www.reliancepower.co.in.
The Company continues to have a robust Business Risk Management framework to identify evaluate business risks and opportunities. The Risk Management Committee comprises of Directors and senior managerial personnel. This framework aims at transparency to minimize the adverse impact if any on the business objectives and enhances the Company's competitive advantage. The business risk framework defines the risk management approach including documentation and reporting at various levels across the enterprise. The framework has different risk models which help in identifying risk trends exposure and potential impact analysis at each business segment as well as Company level. The risks are assessed for each project and mitigation measures are initiated both at the project as well as the corporate level. More details on Risk Management indicating development and implementation of Risk Management policy including identification of elements of risk and their mitigation are covered in Management Discussion and Analysis section which forms part of this Report.
The details of the Risk Management Committee and its terms of reference etc. are set out in the Corporate Governance Report forming part of this Report.
Compliance with provisions of Sexual Harassment of Women at workplace (Prevention Prohibition and Redressal) Act 2013
The Company is committed to protect and maintain the dignity of women employees and it has in place a policy for the prevention and redressal of such complaints to ensure the protection against sexual harassment of women at workplace. During the year under review no such complaint was received. The Company has also constituted an Internal Compliance Committee under the Sexual Harassment of Women at workplace (Prevention Prohibition and Redressal) Act 2013.
Corporate Social Responsibility
The Company has constituted Corporate Social Responsibility (CSR) Committee in compliance with the Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules 2014. The CSR Committee has formulated a Corporate Social Responsibility Policy (CSR policy) indicating the activities to be undertaken by the Company.
The CSR policy may be accessed on the Company's website at the link https://www.reliancepower.co.in/ documents/2181716/2359750/CSR_Policy.pdf/8bdf02cb-4f44-5ff6-aab9-f70cce3f92b7.
As on March 31 2020 the CSR Committee of the Board consist of Smt. Rashna Khan as Chairperson Shri K Ravikumar Shri D. J. Kakalia and Shri K Raja Gopal Directors as members. The disclosures with respect to CSR activities forming part of this report is given as Annexure - D.
Orders if any passed by Regulators or Courts or Tribunals
No orders have been passed by the Regulators or Courts or Tribunals which impact the going concern status of the Company and its operations.
Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls with reference to financial statement across the organisation. The same is subject to review periodically by the internal audit cell for its effectiveness. During the financial year such controls were tested and no reportable material weaknesses in the design or operations were observed. The Statutory Auditors of the Company also test the effectiveness of Internal Financial Controls in accordance with the requisite standards prescribed by ICAI. Their expressed opinion forms part of the Independent Auditor's report.
Business Responsibility Report
Business Responsibility Report for the year under review as stipulated under Listing Regulations is presented in a separate section forming part of this Annual Report.
Your Directors would like to express their sincere appreciation for the cooperation and assistance received from shareholders debenture holders debenture trustee bankers financial institutions regulatory bodies and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives officers and staff resulting in the Company achieving a number of milestones during the year.
For and on behalf of the Board of Directors
|Anil Dhirubhai Ambani|
|May 09 2020|