GE Power India Ltd Directors Report.
Your Directors present the 27th Annual Report of the Company along with the Audited Financial Statements for the financial year ended 31 March 2019 (FY 2018-19)
|Particulars||Year ended 31 March 2019||Year ended 31 March 2018|
|Profit/(Loss) before exceptional items, tax, interest and depreciation||3,112.4||2,595.0|
|Less: Interest/Finance Costs||411.3||237.3|
|Less: Depreciation and amortisation expense||314.2||508.0|
|Profit/ (loss) before exceptional items and tax||2,386.9||1,849.7|
|Profit/ (loss) before tax||1,464.0||422.7|
|Provision for taxation|
|- Current tax||859.4||583.5|
|- Tax related to earlier years||202.5||8.9|
|- Deferred tax (credit)||(358.4)||(435.3)|
|Profit/ (loss) after tax||760.5||265.6|
|Balance brought forward from previous year in the statement of profit and loss||5,134.3||5,111.5|
|Profit available for appropriation||5,894.8||5,377.1|
|a) Transferred to General Reserve||-||-|
|b) Dividend paid||201.7||201.7|
|c) Corporate Dividend Tax (Net) paid||41.9||41.1|
|Balance carried forward to Balance Sheet||5,651.2||5,134.3|
In compliance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations), as amended from time to time, your Company has adopted a Dividend Distribution Policy. This policy specifies the parameters of distribution of dividend with objective of delivering sustainable value to its stakeholders. The Dividend Distribution Policy of the Company is annexed as Annexure A to this Report.
Your Directors are pleased to recommend a dividend of H 6/- per equity share (i.e. 60% of the face value of H 10/-each) for FY 2018-19 amounting to H 486.3 million (including Corporate Dividend Tax of H 82.9 million).
TRANSFER TO RESERVES
No amount was transferred to reserves during FY 2018-19.
STATE OF COMPANYS AFFAIRS Operations - The year in review
Electricity is one of the vital engines of growth. Access to affordable electricity improves the living standards of any economy. It also opens up avenues of further growth for the economy by improving productivity and enabling new industrial activities. To keep pace with Indias rapid economic growth, population growth & consumption growth, IEA estimates that electricity demand India is likely to almost triple between 2018 to 2040. Hence, billions of Indians need reliable, affordable and cleaner power for economic activities and growth. Your company is focused on this purpose, and is well positioned to play a vital part in Indias growth story.
Presently, as per BP Statistical Review of World Energy, India is the 3rd largest producer and consumer of electricity in the world. Per capita consumption of electricity has improved from 632 units in 2005-06 to ~1200 units in 2018-19. Still, India is ranked very low vis-a-vis other large economies such as China, where per capita consumption is >4000 units per annum and there is substantial potential for its growth. During the last few years, due to implementation of various Govt. initiatives, the condition has improved substantially and today approx. 94% of Indian household is electrified. With improved access coupled with growing consumption, population & economic activities, India is bound to witness a substantial increase in demand for electricity in the coming years.
Your company is focused in the largest portion of Indias power generation. Currently, of the total installed base (IB) of ~356GW,** coal comprises of ~56%, large hydro ~13%, Wind ~10%, Gas ~7%, Solar ~8%, other renewables ~4% and Nuclear power of ~2%. The generation mix however, is quite different with approx. 74% coming from coal power plants.
Conventional sources of electricity are being challenged by a global focus on climate change, which the Government of India (GoI) has vigorously supported through an extensive renewable energy installation program, especially Solar and Wind. This has resulted in renewables sources capturing a significant share of the growth, resources, and available funds for the power sector in the market. While the share of renewables energy in the Indian electricity mix will increase over time, conventional sources will remain vital in order to meet the energy requirements of the growing economy. In fact, their role will evolve in increasingly important ways:
1. Ordering of supercritical thermal power generation plants will continue for the foreseeable future. During FY18-19, orders were placed for ~3GW, and the recently published National Electricity Plan 2018 indicates that levels will persist. Growing electricity needs along with replacement of old thermal power plants are expected to drive the market for new capacities.
2. Following GoIs emission norms by 2022, the existing thermal power plant will reduce emissions such as SOx, NOx when outfitted with Air Quality Control technologies.
3. Efficiency enhancements are poised to happen across the country, improving overall plant efficiency, slashing fuel usage leading to reduced costs, increasing affordability, boosting megawatt output, and extending unit life. Furthermore, we see a major reduction in CO2 emissions.
4. To integrate higher renewable energy, with very limited available resources of Hydro pump storage power in India, its imperative that thermal power stations will be called upon to support renewable integration and grid balancing. This positions these stations as essential enablers for integrating increasing Renewable sources into the grid.
Your Company, with more than 100 years of experience in the Indian market, and proven technological leadership, is well-positioned to support the above demands for the power generation market in India. We believe in the people who work every day in Indias thermal sector; they are ready to make conventional generation sources a relevant & leading part contributing to power sectors cleaner future in the country.
Your Companys execution unit at Noida & manufacturing facility at Durgapur, West Bengal, is capable of manufacturing Supercritical &
Ultra Supercritical Boilers equipped with the latest manufacturing technologies. Your Company, in partnership with BHEL, accomplished the following milestones in the FY 2018-19:
Major milestone achieved for
2x660 MW Suratgarh - First Unit Full Load completed in March 2019.
2x800 MW Gadarwara - U#1 : Full load trial run completed in November 2018. U#2: Chemical cleaning completed in January 2019.
3x660 MW Nabinagar - U#1 Synchronized in January 2019 and full load achieved in March 2019.
2x660 MW Banharpali - U#1 Coal Synchronization achieved in March 2019. U#2 Coal Synchronization in progress.
1x800 MW Wanakbori - Coal Synchronization achieved in March - 2019.
2x800 MW Darlipalli - U#1 Chemical cleaning completed in November 2018 and Steam Blowing in February 2019. U#2 Hydro Test Drainable done on December 2018.
Significant erection progress at Indias first 2x500 MW Tower Boiler site at Neyveli - Commercial Operation declaration of one 500 MW unit is expected in the coming year. First Unit has already achieved Oil Firing successfully on 28 March 19.
Key manufacturing progress on ongoing projects with
BHEL-GE partnership projects:
Boiler Pressure Parts Manufacturing & Engineering
2x800 MW North Chennai - Boiler Pressure Parts supply completed
2x660 MW Ennore - Boiler Pressure Parts supply completed
2x800 MW Telangana - Boiler Pressures dispatched
2x800 MW Uppur - Boiler Pressure Parts dispatch started
2x660MW Rampal Maitree Project in Bangladesh - Pressure Part manufacturing has started
Condenser : Second Condenser from Durgapur Factory
Your Companys manufacturing facility at Durgapur, West Bengal, has once again designed & manufactured Condenser for 660 MW Ghatampur thermal power Project. Dispatch was completed by March 2019. This is a huge accomplishment for development of a new complex product for thermal power station.
Progress on CEL II 1 x 150 MW Sihanoukville, Cambodia:
Your Company is executing the first CFB Boiler fully designed and manufactured from India. The project completed all the supplies of Pressure Parts, Steel along with all key mechanical equipment. The site is in advanced stages of erection of complete Boiler The Boiler Hydro test and full load is planned in the year of 2019-2020.
New orders from BHEL-GE partnership:
1x660 MW Coal Based Panki Super Critical thermal power Project with UPRVUNL at Uttar Pradesh, India
3x800 MW Coal Based Patratu Super Critical Thermal Power Project at Jharkhand, India with PVUNL.
2x660MW Coal Based Udangudi Super Critical Thermal Power Project at Tamilnadu, India with TANGEDCO
Your Company executed the following key milestones in the FY 2018-19:
Manufacturing completed for 5 Mills for Unit-3 of Hassyan Energy PJSC - 4x660 MW Clean Coal Power Plant, Dubai Electricity & Water Authority, Dubai.
AIR QUALITY CONTROL SYSTEM
Large new market for services and supplies with new environmental norms for SOx, NOx, etc. FGD market is estimated in excess of ~150GW (includes project commissioned and under execution). Your Company is prepared to address this huge market opportunity.
Your Company received the following new orders in the FY 2018-19
Flue Gas Desulphurization (FGD) system at (2X660 MW) NTPC Solapur Thermal Power Project in Maharashtra on EPC Basis.
Flue Gas Desulphurization (FGD) system at (2X660 MW) NTPC Tanda Thermal Power Project in Uttar Pradesh on EPC Basis.
Flue Gas Desulphurization (FGD) system at (2X660 MW) MUNPL Meja Thermal Power Project in Uttar Pradesh.
Flue Gas Desulphurization (FGD) system at (1X500 MW) NTPC Unchahar Thermal Power Project in Uttar Pradesh.
Your Company achieved the following milestones in the FY 2018-19:
Successfully completed the Performance Guarantee test of the first limestone-based WFGD (wet flue gas desulphurization) at
NTPCs 500MW power plant at Vindhyachal, Madhya Pradesh. NTPC has issued the Completion of facility certificate.
First 3x660 MW ESPs from L&T Mitsubishi Boiler (LMB) for NUPPL Ghatampur project (a JV of NLC and UPRVUNL). The project includes Design & Engg, Manufacturing & Supply and Construction & Commissioning materials of 18 ESP units for 3x660 MW Coal Fired Power Plant. This year your Company delivered significant supply of material and started the erection of ESP Units for Boiler 1 & 2.
2x660 MW Power Plant - ESP - Successfully Performance Guarantee test done of ESP for both the unit. We have achieved the below 10 mg/Nm3 emission for both the units for the first time using ESP.
2x900 MW Power Plant - ESP - 4 Nos ESP (2 nos. for each Boiler) - Successfully Commissioning done of ESP for all the units.
1x660 MW Power Plant - ESP - 1 No. of ESP - Successfully Airload test & Commissioning done for the ESP
2x660 MW Power Plant - ESP - 4 Nos of ESP - Passes Successful commissioning of both Units completed in Oct 2018.
Plant Commercial Operation started from Feb 2019.
Maemoh, Thailand :
1x660 MW Power Plant - ESP - 2 Nos of ESP Performance Guarantee test successfully completed for both ESPs in January 2019.
Yanbu, Saudi Arabia:
5x660 MW Power Plant - ESP - 2 Nos of ESP per Boiler Unit 1 & 2 - commissioned and Synchronized with Grid.
Sihanoukville - 150 MW CFB Boiler - Supply of ESP of completed with all key components delivered and getting erected at site.
STEAM POWER SERVICES
Even as the country has chalked out plans to significantly move towards developing, implementing and deploying renewable technology, coal is still likely to remain the backbone of Indias energy mix. India is endowed with easily accessible and abundant coal reserves (fifth largest globally), which are adequate to meet the energy requirements of the Indian economy for the foreseeable future.
Importantly, coal-based generation, the cheapest and most reliable source of electricity in India, accounts for ~56% of the installed capacity (as on March 2019) and over 74% of our total electricity generation in FY18-19. The plant load factor, a measure of plant utilization (PLF) of coal-based plants, which was declining for several years in the past, has reversed the trend and has picked up marginally (by ~1.2%) to clock ~61% PLF in FY18-19. As per NEP-2018, electricity demand is likely to grow with +5% CAGR with contribution of coal remaining stable through till 2027. This implies that a significant amount of generation will come from Coal plants, which is likely to drive higher levels of spending on O&M. This is one of the growth areas identified by your Company.
As per estimates by various agencies, India was the 3 rd largest emitter of CO2 & PM and 2nd largest emitter of SOx & NOx in the world. The power sector is one of the biggest contributors to these emissions. The efficiency of coal-fired power plants in India is very low, and there is an opportunity and need to retrofit existing coal-fired power plants to increase their efficiency and reduce their carbon emission levels. Majority of the power continues to be generated by subcritical units, where there is an immense need & substantial potential to improve performance. There are various retrofit options available for these units. For instance, after a successful retrofit execution of steam turbine shaftline in India demonstrated over 14% heat rate improvement at the Gujarat State Electricity Corporations (GSEC) Ukai & Wanakbori units , your Company also executed steam turbine shaftline retrofit for an industrial captive unit of Hindalco, where we improved the heat rate of the unit by 3% and power output by over 10% over original design. Reconfirming the need of such retrofits in the industry your Company bagged order for similar Steam turbine shaftline retrofit upgrade from Hindalco for additional 2 units at its same site of Renusagar Power Division in FY18-19. Such efficiency improvement projects can help India in achieving a 33% to 35% reduction in the emissions intensity of the countrys GDP by 2030, as per the commitment made per the global treaty and also make electricity more affordable by conserving.
With Indias new coal plant emission regulations in place, which require all utility boilers as well as industrial and captive plant boilers need to modify their firing systems to improve NOx emissions. In September 2018, your Company was selected by NTPC and Tata Chemicals to upgrade two coal-fired boilers in India with low NOx firing system, namely NTPCs 2x490 thermal plant in Dadri, Uttar Pradesh and the 2x136 TPH Boiler Tata Chemicals Ltd in Mithapur, Gujarat, which was the first standalone order for low NOx firing system upgrade in any coal-fired utility and industrial boilers respectively in India.
Your Companys Powers technology will help customers reduce NOx generation by up to 40% from current levels in these units, helping customers meet new MoEF norms.
This was followed by bagging of the first bulk order from NTPC for supply and installation of low NOx combustion systems for its 10 GW of thermal power plant units. This was the first project awarded on such a large scale by NTPC to install this technology at its thermal power plants. The project would be implemented at NTPCs various selected sites. With more than 150 GW of Indias coal-fired fleet operating on sub-critical levels, needing such upgrade for the implementation of this low NOx boiler technology can help the country reduce its NOx by up to 50 per cent from the current level and help these units meet the new MoEF norms for NOx emissions. By getting these first orders in the NOx upgrade market segment in industrial & utility segment, your company is poised for growth in this market in next 2/3 years.
India is also committed to promote Renewable Energy sources for power generation, and it plans to achieve about 40% cumulative electric power installed capacity from non-fossil fuel energy sources by 2030. As a step in this direction, the Gol has taken several initiatives such as setting up the renewable energy capacity addition target to 175GW by 2022. With the increasing share of renewables in the electricity generation-mix, Indias daily ramp up requirement is likely to be 60-80 GW. Some Coal-based units would be required to address flexibility needs arising from day-of-time and weather-based gaps in daily demand / load generation curve. We expect this need for flexibility upgrade of coal units would increase in the future as the renewable penetration grows. With specific flexibility solutions available in the broad basket of service offerings, your company is well prepared to take lead role & support these upcoming needs of the future.
Overall, your Company is well placed to address customers specific O&M needs, improve power plant efficiency, reduce CO2/NOx/PM emissions levels & also support with solutions for making existing coal plants more flexible for integrating higher GW of renewable in the future.
Following are some of the order wins & milestones achieved by your Company in FY 2018-19:
Implementing NOx upgrade solution in 10GW units of NTPC.
Retrofitting of Steam turbine shaftline with GEs ASP technology for improving efficiency in 2 units of other OEM of HINDALCO.
Started supplies for retrofit project of 3X200 MW Ansaldo Steam Turbines for NTPC Ramagundam to improve efficiency and output.
Successfully won and executed a number of turbine and generator overhauls and repairs for other OEM and OEM machines in the country
Successfully executed Digital solution for Tata Power fleet
GAS POWER SYSTEMS
The Gas Power Systems in your Company is part of the MENESA (Middle East, North Africa and South Asia) region and is engaged in providing project management services for gas power projects in South Asia, while also supporting gas projects globally for the FY 2018-19 from Noida Execution center of your Company:
Bhola 2, is a 225 MW Gas based EEP project in Bangladesh, where GE is supplying two 6F.03 gas turbines, two HRSGs and One Steam Turbine and AUX equipment. All the major equipment deliveries are completed, and the project is now under advanced stage of execution.
Shajibazar, 100 MW Gas based Equipment only project in Bangladesh, where GE is supplying one gas turbine LMS 100 and allied MSDs. The equipment deliveries from GE are done and now project is in Installation and Commissioning phase
HPCL Vizag, 75 MW Gas based EO project, where GE is supplying one 6F.03 gas turbine and allied MSDs to BHEL. The project equipment is under manufacturing and deliveries to customer expected by 3Q 19.
Your Company has started two new projects; Khulna 300 MW where GE is supplying Gas turbine and Steam turbine and auxiliaries and Meghnaghat 2, 600 MW Combined cycle project Turnkey project with a partner. GE shall be suppling main power equipment while IEC scope will be done by the partner. Both these projects are in Bangladesh.
In addition to the above projects, your Company is also involved in providing detailed engineering services; procurement and construction support for several other projects in the region.
Your Companys engineering is providing support on the basic as well as the detailed engineering work for GPS global projects. Some of the EPC combined cycle projects where GPS Noida engineering team is involved are Sergipe in Brazil, EVM II in Mexico and Tucuman steam in Argentina. Besides these, there are various Gas Power partner projects such as ALBA and Waad AL Shamal in Middle East, Ghorasal -3 and Bhola 2 in Bangladesh, Track 4A and Track 4B in Malaysia, Bangkok in Thailand which are currently underway. The Noida team is also involved in NPI support for Fast Power and System engineering in equipment only projects. Additionally, the team is also contributing towards mechanical system and equipment engineering for EEP projects (> 15 projects in engineering and advance release phase for US, Latin America, Africa and South East Asia)
Procurement services for Balance of Plant equipment to global Gas projects like Alba in Bahrain, Wad Al Shamal in Saudi Arabia, Sabiya in Kuwait, Zubair, Samawa and Dhiqar in Iraq and Bhola 2 in Bangladesh.
Supporting and managing construction sites for projects in MENESA region - Wad Al Shamal in Saudi Arabia, Zubair, Dhiqar , Samawa Projects in Iraq.
Your Company is providing a multi-disciplinary support to the projects in GE portfolio across the globe. Services being provided by Noida center are project execution through project fulfilment management and project engineering. Further, engineering support is provided across all Centre of Excellence disciplines including structure, pressure parts, piping & equipment etc. HRSG Projects being managed by FM from Noida center are Indeck Niles and Guernsey (US), EVM II (Mexico), Lernut (Romania), SEWA (UAE), Sabiya (Kuwait), Ghorasal 3 & Meghnaghat II (Bangladesh), Alba(Bahrain), Waad Al Shamal (KSA), TJK I & II (Malaysia) and Kirikkale (Turkey) etc.
AUTOMATION & CONTROL
Your Company accomplished the following milestones on FY 2018-19:
NTPC Solapur (2X660MW) Unit 2 thermal power station Successfully achieved COD (Commercial Operation Date) with Steam Powers Power Automation & Controls "Plant Distributed Control System".
The Unit is focused on delivering operational excellence in Automation & Controls Solutions, partnering with customers and being one of the "Centre Of Excellence" for Global Engineering in the world of Automation & Industrial Internet.
Following are we some of the key achievements of your Company in FY 2018-19:
Baleh : $117million contract with SEB Power Sdn. Bhd. to supply 5x257 MW Francis turbines for the Baleh hydropower plant in Sarawak, Malaysia.
Da Nhim : Succesfully synchronized Pelton Turbine for Da Nhim hydropower plant in Vietnam and the testing works are underway. This milestone follows the successful completion of the spinning of this turbine some time ago in a record time of 28 months.
Idukki : Renovation and Modernization order for 1st Stage (3x130 MW) of Idukki Hydro Electric power station received in 2016, your Company successfully synchronized the 1st Unit after renovations on March 16, 2019 on full load of 130 MW. Next two machines shall be handed over for renovation in June 2019 and August 2019.
As coal is likely to remain the mainstay of Indias energy mix for foreseeable future, even as the country moves towards mainstreaming renewables, its imperative that making coal power more efficient, cheaper, cleaner and more flexible to support renewable integration are going to be key future demands from the Indian coal power plants.
Several steps in this direction have already been taken by GOI e.g. adopting supercritical technology, deploying higher renewables, coming out with new stricter SOx, NOx, SPM pollution, water consumption norms for thermal & deploying Perform, Achieve and Trade (PAT) scheme for energy efficiency improvements across key energy intensive sectors. It is expected that these would go through a full implementation phase in the coming years creating substantial opportunities in the power sector. Given the need to balance the growing environment concerns with the objective of providing affordable power to its citizens, it is important for India to manage coal plants with a holistic approach. There are cases where plants are strong candidates for an efficiency improvement or for flexible operations, and for these cases, an integrated approach to address emissions with flexibility/ efficiency retrofit is needed.
Such specific solutions along with leveraging latest digital technologies will ensure coal-based power plants will continue to be the mainstay of Indias power system for a sustainable long run, supplying affordable and reliable power to all Indian citizens, meeting the current as well as future growth aspirations of India.
The Board of Directors, in compliance with Section 161 of the Companies Act, 2013 and the rules made thereunder (the Act) read with the Articles of Association of the Company and upon recommendation of Nomination and Remuneration Committee, appointed Mr. Prashant Chiranjive Jain as an Additional Director and Managing Director of the Company w.e.f. 17 April 2019.
Further in compliance with Sections 196 and 203 of the Act read with Schedule V and other applicable provisions of the Act and the Articles of Association of the Company, the Board of Directors in its meeting held on 05 April 2019 appointed Mr. Prashant Chiranjive Jain as Managing Director of your Company for a period of 3 years from 17 April 2019 to 16 April 2022 subject to the approval of members and such other approvals as may be required.
In compliance with the provisions of the Act and the Articles of Association of the Company, Mr. Vishal Keerti Wanchoo, NonExecutive Chairman shall retire by rotation at the ensuing Annual General Meeting. Mr. Vishal Keerti Wanchoo, being eligible, offers himself for re-appointment.
Pursuant to Section 149 of the Act and Regulation 25 of the Listing Regulations Independent Directors Dr. Uddesh Kumar Kohli, aged about 78 years and Mr. Arun Kannan Thiagarajan, aged about 74 years were appointed at the 22nd Annual General Meeting held on 25 July 2014 for a period of 5 consecutive years up to 24 July 2019. Accordingly, the tenure of Dr. Uddesh Kumar Kohli and Mr. Arun Kannan Thiagarajan shall to expire on 24 July 2019 and being eligible offers themselves for re-appointment.
In terms of Regulation 17(1A) of the Listing Regulations, approval of the members of the Company is required for the continuation of directorship of Dr. Uddesh Kumar Kohli and Mr. Arun Kannan Thiagarajan as Non-Executive & Independent Director, who have exceeded/about to attain the age of 75 years.
All the three Independent Directors have declared that they meet the criteria of independence as laid down under the Act, Listing Regulations and any other applicable law. The Independent Directors are not liable to retire by rotation. Further the Company has in place the Code of Conduct for Directors and senior management personnel. During the year under review, amendment in the aforesaid code was approved by the Board of Directors of the Company. The Company is in receipt of disclosures from Directors and senior management personnel with respect to adherence of the aforesaid code during FY 2018-19.
The particulars in respect of directors seeking appointment/ re- appointment/continuation of directorship as required under regulation 36(3) of Listing Regulations and Secretarial Standard on General Meetings (SS-2) issued by the Institute of Company Secretaries of India forms part of the Corporate Governance Report. Pursuant to the provisions of Sections 149, 150, 152, 160, Schedule IV and any other applicable provisions of the Act and the Listing Regulations, inter-alia basis the performance evaluation, their expertise in specific functional areas, background, contribution towards Companys performance etc. and as per the recommendation of the Nomination and Remuneration Committee the Board recommends their appointment/ re-appointment/continuation of directorship.
Due to personal and unavoidable circumstances, Mr. Andrew H DeLeone resigned from the position of Director and Managing Director of the Company w.e.f. close of business hours on 05 April 2019. The Board places on record its appreciation for the valuable contributions made by him during his tenure.
Employee Stock Options
The Company intends to offer Share Purchase Plan (hereinafter referred to as GE Share Purchase plan) of its ultimate holding Company i.e. General Electric Company to the employees of the Company. GE Share Purchase Plan is an international program offered to employees part of GE Group in various countries. Eligible employees have the option to purchase shares (up to 10% of the basic salary or as may be specified in the extant GE Share Purchase plan) of General Electric Company, USA (GE Shares) by electing a monthly amount to be taken out of their pay. GE Shares participants also receive a 15% company match on their elected contributions. There is no holding or lock-in period on the shares received and they may be sold or transferred at any time.
The GE Share Purchase plan has been approved by the Board of Directors of the Company in its meeting held on 27 May 2019, subject to the approval of the members of the Company and such other approvals as may be required. For more details, please refer to the Notice of the ensuing Annual General Meeting.
MEETINGS OF BOARD AND ITS COMMITTEES
The Board meets at regular intervals to discuss on Company/ businesss policy, strategy and financial results apart from other Board business. The Board/ Committee Meetings are pre-scheduled and a tentative quarterly / half yearly calendar of the Board and Committee Meetings is discussed and finalised by the Directors in advance to facilitate them to plan their schedule and to ensure meaningful participation in the meetings. The maximum interval between any two Board Meetings did not exceed 120 (one hundred and twenty) days.
Your Company has the following Committees:
Audit Committee (AC)
Nomination and Remuneration Committee (NRC)
Corporate Social Responsibility Committee (CSR)
Stakeholders Relationship Committee (SRC)
Risk Management Committee (RMC) (w.e.f. 01 April 2019)
The details of composition/change in composition, meetings and attendance at the meetings of the Board and its committees namely AC, NRC, SRC and CSR held during the FY 2018-19 and its terms of reference are provided in Corporate Governance Report which forms part of this Report.
The Secretarial Standard on Meetings of the Board of Directors (SS-1) and the Secretarial Standard on General Meetings (SS-2) issued by the Institute of Company Secretaries of India have been duly complied.
Your Company has an Audit Committee of the Board of Directors in place. The terms of reference of the Audit Committee are in line with Section 177 of the Act and the Listing Regulations, as amended. There were no recommendations made by the Audit Committee which were not accepted by the Board. There were no frauds reported by Auditors of your Company under sub-section 12 of section 143 of the Act for the FY 2018-19.
NOMINATION AND REMUNERATION POLICY
Your Company has in place a Nomination and Remuneration Policy to ensure that the Board and top Management is appropriately constituted to meet its fiduciary obligation to stakeholders, to identify and determine the integrity, qualification, expertise and experience of persons who are qualified to become Directors or who may be appointed in senior management and/or as Key Managerial Personnel of the Company. This policy lays down the guidelines relating to appointment and remuneration for Executive Directors, Non-Executive Directors/ Independent Directors, Key Managerial Personnel and Senior Management.
In compliance with the provisions of Listing Regulations, the Board of Directors of the Company on 29 March 2019, amended the aforesaid policy to inter-alia include provisions with respect to quorum, age criteria for Independent directors and Directors and Officers Insurance. The same can be accessed at www.ge.com/in/ge-power-india-limited
Pursuant to the provisions of the Act and the Listing Regulations, the Non-Executive, Non-Independent Directors and the Executive Directors of the Company were evaluated by the Independent Directors of the Company in a separate meeting of Independent Directors held during the year. The formal annual evaluation of the Board as a whole, Chairman of the Company, Committees of the Board namely Audit Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and Nomination and Remuneration Committee and all the Directors were undertaken in the Board meeting. More details on the same including the evaluation mechanism are provided in the Corporate Governance Report which forms part of this Annual Report.
AUDITORS AND AUDIT REPORT
The Statutory Auditors of the Company, M/s. B S R & Co. LLP, Chartered Accountants (Firm Registration Number - 101248W/W- 100022) were appointed at the 24th Annual General Meeting of the
Company to hold office for a term of 5 (five) consecutive years until the conclusion of the 29th Annual General Meeting of the Company.
Pursuant to Section 148 of the Act, your Directors, on the recommendation of the Audit Committee, appointed M/s. Shome & Banerjee, Cost Accountants as Cost Auditors of your Company for the FY 2019-20 to carry out the cost audit for the applicable business at a remuneration of H 3,00,000/- (Rupees Three Lacs only) plus applicable taxes and reimbursement of out of pocket expenses. A Certificate from M/s. Shome & Banerjee, Cost Accountants has been received to the effect that their appointment as Cost Auditors of the Company, would be in accordance with the limits specified under Section 141 of the Act.
As required under the Act, the remuneration payable to the Cost Auditor is required to be placed before the members of the Company in the general meeting for ratification. Accordingly, the Board of Directors of the Company seek members ratification for the remuneration payable to M/s Shome & Banerjee, Cost Accountants for the FY 2019-20 at the ensuing Annual General Meeting.
The Cost records as specified by the Central Government in compliance with sub-section (1) of section 148 of the Companies Act, 2013 is being duly maintained by the Company.
Pursuant to the provisions of Section 204 of the Act your Directors appointed M/s. Hemant Singh & Associates, Company Secretaries to undertake the Secretarial Audit of your Company for FY 2018-19. The Secretarial Audit Report in Form MR-3 for FY 2018-19 is annexed as Annexure B to this Report.
Further in compliance with Regulation 24A of Listing Regulations, Secretarial Compliance Report for the year ended 31 March 2019, issued by M/s. Hemant Singh & Associates, Company Secretaries is annexed as Annexure C to this Report. The same was filed with stock exchanges (BSE & NSE) on 29 May 2019.
There were no qualifications, reservations, observations or adverse remarks made by the Auditors in their report.
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors state that:
I. in the preparation of the annual financial statements for the year ended 31 March 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
II. such accounting policies have been selected and applied consistently and made such judgements 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 the end of the financial year 31 March 2019 and of the profit of the Company for that period;
III. proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
IV. the annual financial statements have been prepared on a going concern basis;
V. internal financial controls have been laid down and followed by the Company and that such internal financial controls are adequate and are operating effectively; and
VI. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
SUBSIDIARIES/JOINT VENTURE COMPANY
GE Power Boilers Services Limited (GEPBSL) is a wholly owned subsidiary of the Company. It is a non-material non-listed Indian subsidiary. It was initially engaged in the business services related to boilers. From the year 2005 it has primarily earned only other income. The aforesaid subsidiary did not have any business operations during the year. During FY 2018-19, GEPBSL had a total income of H 1.4 million (Previous Year - H 3.1 million) along with loss after tax of (H 6.6 million) (Previous Year - H 0.5 million). As at 31 March 2019, GEPBSLs accumulated losses of (H 40.1 million) have eroded its paid up equity capital of H 3.4 million.
Your Company has a Joint Venture (JV) with ALSTOM Transport S.A. (ATSA) in the name of Alstom Systems India Private Limited. The role of your Company in the JV is limited only to equity participation not exceeding 5% (not exceeding H 80 million) and that of ATSA is 95% or more. Your Company is not responsible for the execution and day-today management of the transport operations specific to this Project.
In compliance with the first proviso to sub-section 3 of section 129 of the Act a statement containing salient features of the financial statement of Companys subsidiary for FY 2018-19 in the prescribed format Form AOC-1 is as under :-
The Promoter of the Company Alstom India Tracking BV. (formerly Alstom Finance B.V.) holds 46,102,083 equity shares constituting 68.58 % of the paid-up capital of the Company.
CONSOLIDATED FINANCIAL STATEMENTS
In compliance with provisions of Section 129 of the Act and Listing Regulations, as amended, your Company has prepared Consolidated Financial Statements in accordance with the requirements of Ind-AS Rules. The Audited Consolidated Financial Statements along with the Auditors Report thereon forms part of this Annual Report.
Further, as per the fourth proviso of Section 136(1) of the Act, Audited Financial Statements of the subsidiary company have been displayed on the website of the Company viz. www.ge.com/in/ge-power-india-limited
Members interested in obtaining a copy of audited financial statements of the subsidiary company may write to the Company Secretary of the Company.
Your Company is committed to best Corporate Practices based on the principle of transparency, accountability, fairness and integrity to create long term sustainable value for its stakeholders. Your Company has in place Vigil Mechanism (Ombuds and Open Reporting Procedure) to provide an avenue to all Stakeholders to report Concerns, whether actual or potential, about integrity violation or violation of law. The Company provides adequate safeguard to the concern raiser. If a Concern Raiser faces any retaliation as a result of reporting a Concern or supporting an investigation, the aforesaid Procedure provides adequate provision to report the incident to the Chairman of the Audit Committee. In addition, your Company has adopted an internal Code of Conduct namely The Spirit & The Letter (S&L) which is followed by anyone who works for or represents GE, which includes your Company. During the year, 42 stakeholders complaints were received out of which 42 complaints have been resolved to the satisfaction of the complainants. Out of the total resolved complaints 29% of the complaints were confirmed.
The aforesaid policies are available on the Companys website viz. www.ge.com/in/ge-power-india-limited
The Company has not accepted any deposits and as such no amount of principal or interest was outstanding as at the end of FY 2018-19.
During the FY 2018-19, your Company obtained rating from ICRA Limited. Summary of the same is provided below:-
|Name of the credit rating agency||ICRA Limited|
|Date on which the credit rating was obtained||20 November 2018|
|Details of revision in the credit rating|
|Long Term rating||Revised from AA to AA-. The outlook on the long term rating is Stable|
|Short- Term rating||Reaffirmed as A1+|
|Reasons provided by the rating agency for a downward revision||The reason behind downward rating interdict includes deterioration of credit profit of General Electric (GE), ultimate holding Company, reduction in order inflow for power equipment manufacturer because of subdued thermal and hydro power industry marked by modest fresh capacity addition plans and decline in Companys net profitability in H1 FY 2018-19 on the back of exceptional costs related to internal restructuring.|
|Note: The aforesaid assessment was done taking into account inter-clic the facts and figures related to the half year ended 30 September 2018. However, the orderbook and profitability position had noticeably gone up by end of FY 2018-19.|
ENVIRONMENT, HEALTH AND SAFETY (EHS)
For your Company safety, health and well-being of employees, contractors and customers are of prime importance. Your Company is governed by its EHS directives and instructions to protect itself and its stakeholders. EHS process is managed in accordance with the highest standards and from time to time, these standards are evaluated. Your Company follows Zero Tolerance Policy. In addition to this, every stakeholder is authorised to Stop Work when there is a potential threat of individual injury / illness or having chances of property damages. All locations have well-equipped healthcare facilities and arrangement for emergencies. Employees at all levels are given trainings so that they have an understanding of EHS requirements and build a culture of safety and well-being.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis is presented in a separate section, which forms part of this Annual Report.
CORPORATE GOVERNANCE REPORT
The Corporate Governance Report is presented in a separate section, which forms part of this Annual Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
During the year, your Company placed Inter-Corporate Deposits (ICDs) of H 1,550 million (closing balance) with GE Power Systems India Private Limited and H 33.9 million (closing balance) with GE Power Boilers Services Limited. Particulars of the ICDs given are provided in Note no. 15 and Note no. 37 of the Notes to Standalone Financial Statements which forms part of this Annual Report. The rate of interest for aforesaid ICDs were in the range of 7.275% p.a. to 8.7% p.a. All the ICDs were granted in compliance with Section 186 of the Act. The aforesaid ICDs were granted for business purposes only.
Particulars of investments made by your Company have been provided in Note 6 of the Notes to Standalone Financial Statements which forms part of this Annual Report. Your Company has not given any Guarantee during the FY 2018-19, except as specified in the notice of ensuing Annual General Meeting.
RELATED PARTY TRANSACTIONS
During the FY 2018-19, Related Party Transactions as defined under Section 188 of the Act and the Listing Regulations, as amended, were at arms length and in ordinary course of business. Your Company has in place a Related Party Transactions Policy. During the FY 201819, your Company entered into material related party transactions, as defined under the Listing Regulations and the Related Party Transaction Policy of the Company, which have been detailed in the notice of the ensuing Annual General Meeting of the Company.
Omnibus approval for related party transactions (at arms length and in ordinary course of business) which were foreseen and repetitive in nature was obtained from the Audit Committee. During the period under review, your Company did not enter into any Related Party Transaction which may be considered material in terms of Section 188 of the Act and thus disclosure in Form AOC-2 is not applicable to the Company. The disclosures pertaining to transactions with Related Parties in compliance with applicable accounting standards have been provided in Note 37 of the Notes to Standalone Financial Statements.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings & outgo as stipulated under Section 134(3)(m) of the Act is annexed as Annexure D to this Report.
DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY
The Board of Directors of your Company has laid down a Risk Management Policy for the Company. It identifies elements of risks inherent to the business pertaining to tender and contract execution, operational and financial, environment, health and safety, reputation and image, currency fluctuation, compliance etc. The framework of Internal Financials Controls (IFC) complements the Policy by scientifically identifying, scoping and mapping risks to significant divisions. Risk matrices that map controls against risks in each area, are evaluated periodically. There exists an objective rating criteria for observations and time bound mitigations that are monitored. Every unit and function is required to deploy the control measures and ensure timely reporting. In the opinion of the Board, none of the above mentioned risks threaten the existence of your Company.
REPORTING UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
GE is an equal opportunity provider organization that consciously strives to build a work culture that promotes the dignity of all employees. In compliance with the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013 and the rules made thereunder the Company has in place a policy on Sexual Harassment at workplace. The Company has complied with the provision relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules made thereunder. During FY 201819, the Company conducted awareness programmes at its various locations in respect to sexual harassment at work place. No case was reported relating to sexual harassment during the FY 2018-19.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Board of Directors of your Company is satisfied with the internal financial control process with reference to the financial statements. Internal control environment of the Company is reliable with well documented framework to mitigate risks. A detailed analysis is provided in the Management Discussion and Analysis.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 is annexed as Annexure E to this Report and is also available on the Companys website viz. www.ge.com/in/ge-power-india-limited
PARTICULARS OF EMPLOYEES
The information as required under Section 197 of the Act in respect of employees of the Company is annexed as Annexure F to this Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no significant and material orders passed against your Company by the regulators or courts or tribunals during the FY 2018-19 impacting the going concern status and your Companys operations in future.
DISCONTINUED OPERATIONS IN FACTORIES LOCATED AT VADODARA AND SHAHABAD
In view of a slowdown in parts of the power sector, which has led to a rationalization of the workforce of the Company at various stages, to keep costs in line with the existing backlog and operating levels, the Company had opened Voluntary Retirement Schemes (Schemes) at various locations for its workmen. Majority of the workmen participated in such schemes at Vadodara and Shahabad; and as a consequence, including the current market situation, it was not viable for the management to operate the factories located at Vadodara and Shahabad, and the said factories were closed with effect from 27 August 2018 and 11 October 2018 respecively.
In view of closure of two factories situated at Maneja (Vadodara) and Shahabad, the management is exploring and evaluating various options to dispose of the land and building, including machinery and equipment related to these factories, subject to necessary approvals.
MATERIAL CHANGES AND COMMITMENTS, IF ANY
There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of FY 2018-19 and the date of the report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Corporate social responsibility and inclusiveness are part of GEs sustainability strategy. Diversity, efficient resources management, climate change and engaging our partners in the process of sustainability are part of the overall agenda. Through employee volunteering, sustainability goals, contribution by our global Foundation and country CSR efforts, GE as a group has endeavored to prioritise commitment towards sustainable and inclusive development.
Your Companys CSR efforts with local communities during the year were focused on the projects on village development, sanitation & hygiene, livelihoods, skills development and farm productivity, access to basic healthcare and support to socio-economically vulnerable population were given continued support.
Key initiatives which your Company has been engaged in FY 2018-19 are as follows:
Villages and Community Development
In Durgapur and Shahabad your Company deployed two mobile medical health units (MHU) to provide basic healthcare to the people and cater to the essential health care needs, enhance the health status and creates awareness amongst the underprivileged and needy senior citizen. MHU provides for essential diagnostic tests, free medication, preventive health care checks and health awareness activities. During FY 2018-19, the project served more than 12,000 patients in Durgapur and 18,000 patients in Shahabad.
In Durgapur, your Company has worked to develop livelihood, electricity and healthcare facilities for the people suffering from leprosy in the leprosy colony. The support provided by your Company had made huge impact on the lives of the underprivileged people.
Your Company has partnered with Sulabh International to construct a community sanitation structure at Ghaziabad that would benefit both men and women.
Livelihoods and Income-Generation Programmes
Your Company continued its ongoing programmes on sustainable income-generation and livelihood support.
A vocational skills programme was completed in partnership with National Skill Development Fund and National Skill Development Corporation at Vadodara and Shahabad. The project was focused on training women in sewing machine operation, general duty assistant in hospitals and vermicomposting, benefitting 500 women to improve their economic prospects as a result of the training.
In compliance with the provisions of Section 135 of the Act, your Company has constituted a CSR Committee and has made spendings towards CSR activities during FY 2018-19. The Annual Report on CSR activities is annexed as Annexure -G to this Report.
INVESTOR EDUCATION & PROTECTION FUND (IEPF)
Pursuant to Section 124(5) of the Act read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (the Rules), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years. In accordance with the aforesaid provisions, H 2,803,580 /- was transferred to IEPF Authority in respect of dividend for FY 2010-11.
Pursuant to Section 124(6) of the Act, such shares in respect of which dividend has remained unpaid or unclaimed for seven consecutive years shall be transferred to Demat account maintained by IEPF Authority. In accordance with the aforesaid provisions 8,869 equity shares of the Company were transferred to the Demat account maintained by IEPF Authority.
The dividend accruing on 116,324 equity shares (already transferred to IEPF as on 31 March 2018) was credited to the account of IEPF Authority.
Details of year wise amount of unpaid/unclaimed dividend lying in the unpaid account which are liable to be transferred to the IEPF Authority and the due dates for such transfer form part of the notes to notice of ensuing Annual General Meeting of the Company.
As on 31 March 2019, 19,217 equity shares were eligible to be transferred to IEPF Authority after 1 September 2019. Accordingly, the Company vide letter dated 14 May 2019 has already written to such shareholders to claim dividends which stand unpaid/unclaimed for the last seven consecutive years i.e. since FY 2011-12, to claim dividend on or before 01 September 2019. Thereafter the dividend for the year mentioned above shall be transferred to the IEPF and the corresponding eligible shares shall also be transferred to demat account maintained by IEPF.
BUSINESS RESPONSIBILITY REPORT
As per the Listing Regulations top five hundred listed entities based on market capitalization are required to provide Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective, Stakeholder relationship and Customer relationship. In compliance with the aforesaid Regulations, the Business Responsibility Report of the Company is annexed as Annexure H to this Report.
The Board of Directors take this opportunity to thank all its shareholders, valued customers, banks, Government and statutory authorities, investors and stock exchanges for their continued support to the Company. Your Directors wish to place on record their deep sense of appreciation for the committed services by employees. Your Directors acknowledge with gratitude the encouragement and support extended by the valued shareholders and the Promoters of the Company.
|For and on behalf of the Board of Directors|
|Vishal Keerti Wanchoo|
|Place: Noida||Chairman & Non-Executive Director|
|Date: 27 May 2019||(DIN 02776467)|