Orient Green Power Company Ltd Directors Report.
Your Directors take pleasure in presenting the Twelfth Annual Report on the business and operations of the Company along with the audited financial statements, for the financial year ended March 31, 2019.
The Financial Year 2018-19 was a year of consolidation for the business, a year wherein the Company saw marginal dip in revenues due to delayed onset of wind season and impact of cyclone which resulted in drop in wind availability. The moderate decline in the top-line understates the progress made by the Company in the past few years. The reduced units generated and decline in revenues resulted in operating de-leverage and impacted EBITDA and resultant profit generating ability of the business. However, efforts have been undertaken to improve efficiencies and a rebound in wind availability and REC mechanism will enable the company to deliver a steady performance in the future.
Revenues for the year stood at Rs. 37,127.62 lakhs as against Rs. 43,313.29 lakhs reported for the corresponding period last year.
EBITDA for the year stood at Rs. 24,648.97 lakhs as against Rs. 29,975.96 lakhs during previous year. EBITDA margins for the year stood at 73% as against previous year margin of 75%.
Depreciation for the year stood at Rs. 11,373.84 lakhs as against Rs. 13,662.68 lakhs registered during last year.
Interest expense for the year stood at Rs.20,456.62 lakhs as against the previous outgo of Rs. 23,504.79 lakhs.
Loss after tax for the year stood at Rs. 4,961.02 lakhs as against a loss of Rs. 6,322.39 lakhs reported for last year.
Winding up of Orient Green Power Pte. Ltd., Singapore the Promoter Company
Orient Green Power Pte Ltd Singapore ("OGPPL"), a company belonging to the Promoter Group has entered into Scheme of Compromise and Arrangement, with Shriram EPC (Singapore) PTE Ltd, Singapore ("hereinafter SEPC PTE") and Shriram Ventures Pte Ltd, Singapore, whereby the shares held by OGPPL in the equity share capital of our Company shall stand proportionately distributed to the shareholders of OGPPL.
The Scheme of Arrangement has been approved by the Honorable High Court of the Republic of Singapore. OGPPL has been a promoter of our Company since 2010, and holds 34.91% stake in the Company.
Shriram EPC (Singapore) PTE Ltd, Singapore ("SEPC PTE") holds 37.7% in the equity share capital of OGPPL. The entire equity share capital of SEPC PTE is held by SVL Limited, the Indian Promoter Group company. The other equity shareholders of OGPPL, who are financial investors are Bessemer India Capital OGPL Ltd ("BVP") with 37.7% and AEP Green Power Limited ("AEP") with 24.6%.
Pursuant to the Scheme of Compromise and Arrangement, the shares of the Company held by OGPPL has been distributed to their shareholders of the Company viz. SVL Limited, BVP and AEP SVL Limited, BVP and AEP will hold 34.95%, 13.16% and 8.59% respectively. The promoter shareholding in the equity share capital of our Company stands at 48.73%. OGPPL has been ceased to be the Promoter of the Company.
Consolidated Financial Statements
The Consolidated Financial Statements of the Company and its subsidiaries, prepared in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under Section 133 of the Companies Act, 2013 (the Act) read with relevant rules issued thereunder form part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company.
The annual financial statements of the subsidiaries and related detailed information will be kept at the Registered Office of the Company and will be available to investors seeking information at any time.
The Company has adopted a Policy for determining Material Subsidiaries in terms of Regulation 16 (1) (c) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). The Policy, as approved by the Board, are available on our website, at HREF="http://orientgreenpower.com/">http://orientgreenpower.com/ Companies-Act-and-SEBI- Compliance.asp.
The Company has not declared any dividend in view of the losses incurred by the Company during the year.
During the year under review, there is no change in the Share Capital of the Company.
Particulars of Loans, Guarantees or Investments
Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in this Annual Report.
Material changes and commitments affecting financial position between the end of the financial year and date of the report
There were no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of the report.
Management Discussion and Analysis Report
Management Discussion and Analysis Report for the year under review, in terms of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report.
As at 31st March, 2019, your Company had a total of 9 subsidiaries and 4 step down subsidiaries, the details of which are given elsewhere in the Annual Report under the relevant Sections.
Orient Eco Energy Limited (OEEL), a subsidiary of Orient Green Power Company Limited, has been liquidated during the financial year and accordingly ceased to be a subsidiary of the Company.
The information as required under the first proviso to sub-section (3) of Section 129 is given in Form AOC-1, is appended as Annexure 1 to the Boards Report.
Further, pursuant to the provisions of Section 136 of the Companies Act, 2013 ("Act") financial statements of the Company, Consolidated financial statements along with the relevant documents and separate audited accounts in respect of the subsidiaries of the Companies are available in the website of the Company HREF="http://www.orientgreenpower.com/">www.orientgreenpower.com/ Investor/Subsidiaries Balance Sheet
The Company has not accepted any deposits either from the shareholders or public and as such, no amount of principal or interest was outstanding as on the date of Balance Sheet.
The Company has been complying with the provisions of Corporate Governance as stipulated in Regulations 24, 27 and other relevant provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. A separate report on Corporate Governance along with Auditors Certificate on compliance of the Corporate Governance norms as stipulated in Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 forming part of this report are provided elsewhere in this Annual Report.
Internal Control System
The Company has in place, an adequate system of internal controls commensurate with its size, requirements and the nature of operations. These systems are designed, keeping in view the nature of activities carried out at each location and the various business operations. The company has documented a robust and comprehensive internal control system for all the major processes to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and efficient use of resources.
The Internal Auditor monitors and evaluates the efficacy and adequacy of internal controls system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit, process owners undertake corrective action in their respective areas and thereby strengthen the controls. During the year, the Audit Committee met regularly to review reports submitted by the Internal Audit. All significant audit observations and follow-up actions thereon were reported to the Audit Committee. The Audit Committee also met the Companys Statutory Auditors to ascertain their views on the financial statements, including the financial reporting system, compliance to accounting policies and procedures, the adequacy and effectiveness of the internal controls and systems followed by the Company.
Your Company also has a Risk Management Framework in place covering all critical areas of operation. This framework is reviewed periodically keeping in mind the business dynamics and external environment and provides the guidelines for managing the various risks across the business.
Directors Responsibility Statement
The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) Rules, 2016, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Companies Act, 2013 (the Act), read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. The Company has adopted all the Ind AS standards and the adoption was carried out in accordance with applicable transition guidance. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
The directors confirm that:
(i) In the preparation of the annual accounts for the year ended 31st March 2019, the applicable accounting standards have 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 31st March 2019 and Profit and Loss and cash flow 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, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the Directors had prepared the annual accounts of the Company on a going concern basis.
(v) the Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are reasonably adequate and operating effectively; and
(vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are reasonably adequate and operating effectively.
Number of Board Meetings
The Board of Directors met 4 (four) times in the year 201819. The details of the board meetings and the attendance of the Directors are provided in the Corporate Governance Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013.
Familiarization Program for Independent Directors
The Company will impart Familiarization Programme for new Independent Directors inducted on the Board of the Company. The Familiarization Programme of the Company will provide information relating to the Company, wind energy / renewable energy industry, business model of the Company, geographies in which Company operates, etc. The programme also intends to improve awareness of the Independent Directors on their roles, rights, responsibilities towards the Company. Further, the Familiarization Programme should also provide information relating to the financial performance of the Company and budget and control process of the Company. The format of the letter of appointment is available on our website, http://orientgreenpower.com/Companies-Act-and-SEBICompliance.
Directors and Key Managerial Personnel
a) Resignation/Retirement/Demise: -
Mr. S. Srinivasan (DIN: 00014652) Non-Executive Director of the company resigned from his position as Director with effect from 30th July 2018.
Ms. Savitha Mahajan (DIN: 06492679) Independent Director of the Company resigned from her position as Director with effect from 1st December 2018.
The Board placed on record its appreciation for the valuable services rendered by them.
b) Appointment: -
Ms. Chandra Ramesh (DIN 00938694) has been appointed as Additional Director (Independent) of the Company under Section 161 of the Companies Act, 2013 with effect from 27th February 2019, to hold office up to the date of the forthcoming Annual General Meeting. Ms. Chandra Ramesh has offered herself to be appointed as the Independent Director of your Company.
c) Re-appointment: -
Mr. P Krishna Kumar (DIN: 01717373) retires by rotation and being eligible, offers himself for reappointment in accordance with the provisions of Section 152(6) and Articles of Association of the Company. A resolution seeking shareholders approval for his re-appointment forms part of the Notice.
Mr. R. Ganapathi (DIN: 00103623) was appointed as an Independent Director at the 7th Annual General Meeting (AGM) held on 12th August 2014 for a period of five years. Based on the recommendation of the Nomination and Remuneration Committee the shareholders of the Company through postal ballot approved on 27.03.2019 his re-appointment for a second term of five years i.e from 01.04.2019 to 31.03.2024.
Maj.Gen. A.L. Suri (Retd.) (DIN: 00009532) was appointed as an Independent Director at the 7th Annual General Meeting (AGM) held on 12th August 2014 for a period of five years. Based on the recommendation of the Nomination and Remuneration Committee the shareholders of the Company through postal ballot approved on 27.03.2019 his re-appointment for a second term of five years i.e from 01.04.2019 to 31.03.2024.
In compliance with the Regulation 17(1 A) of LODR, approval of the shareholders was obtained via special resolution through the Postal Ballot process on 27th March 2019 for continuation of Mr. N Rangachary (DIN: 00054437) (81 years) as an Independent Director of the Company till the expiry of his existing term ie. upto 13th August, 2020.
d) Key Managerial Personnel
There has been no change in the Key Managerial Personnel during the year.
e) Independent Directors:
The Company has received the declarations from each Independent Directors of the Company under Section 149(7) of the Companies Act, 2013, that they meet the criteria of independence as laid down in Section 149(6) of the Act.
Committees of the Board
The Company has following committees of the Board:
1. Audit Committee
2. Nomination & Remuneration Committee
3. Stakeholders Relationship Committee
4. Risk Management Committee
5. Investment/Borrowing Committee
6. Corporate Social Responsibility Committee
A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report a part of this Annual Report.
Related Party Transactions & Particulars of Contracts or Arrangements made with related parties
All the related party transactions that were entered into during the Financial Year 2018-19 were on an arms length basis and in the ordinary course of business. There are no materially significant Related Party transactions made by the Company with Promoters, Directors or Key Management Personnel etc. which may have potential conflict with the interest of the company at large.
All Related Party Transactions are presented to the Audit Committee and the Board. A statement of all related party transactions was presented before the Audit Committee specifying the nature, value and terms and conditions of the transactions.
The Related Party Transactions Policy as approved by the Board is uploaded on the Companys website at http://orientgreenpower.com/Companies-Act-and- SEBICompliance.asp.
The details of the transactions with Related Parties during the year, are provided in the accompanying financial statements and also in form AOC-2 is appended as Annexure 2 to the Boards Report.
Evaluation of the Boards Performance
In compliance with the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the performance evaluation of the Board was carried out during the year under review. More details on the same are given in the Corporate Governance Report.
Prevention of Sexual Harassment at workplace
The Company has always provided a congenial atmosphere for work to all the employees that is free from discrimination and harassment including sexual harassment. It has provided equal opportunities of employment to all without regard to their caste, religion, colour, marital status and gender. There were no cases reported during the financial year under the said policy.
Audit reports and Auditors Audit reports
1. The Auditors Report for the year 2018- 2019 does not contain any qualification, reservation or adverse remark. The Auditors Report is enclosed with the financial statements in this Annual Report.
2. The Secretarial Auditors Report for the year 20182019 does not contain any qualification, reservation or adverse remark. The Secretarial Auditors Report is enclosed as Annexure 3 to the Boards Report.
3. As required by the Listing Regulations, the auditors certificate on corporate governance is enclosed. The auditors certificate for Year 2018-2019 does not contain any qualification, reservation or adverse remark.
M/s. G.D.Apte & Co, (Registration No.100515W) Chartered Accountants, Pune had been appointed as Statutory Auditors of the Company as per Section 139 of the Companies Act, 2013 for a period of 5 years from the conclusion of Tenth Annual General Meeting till the conclusion of Fifteenth Annual General Meeting, by the members at the Annual General Meeting held on August 09, 2017.
Internal Audit of the company is handled by M/s. Sundar Srini & Sridhar, an independent Chartered Accountant firm, for evaluating the adequacy of internal controls and concurrently reviews majority of the transactions in value terms.
Independence of the firm and compliance is ensured by the direct reporting of the firm to the Audit Committee of the Board.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. M Alagar & Associates, Practicing Company Secretary, were appointed as Secretarial Auditors for the financial year 2018-19, to audit the secretarial and related documents of the Company.
In compliance with the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended, your Company has instituted a comprehensive Code titled as "Orient Green Power Company Limited Code of Conduct" which lays down guidelines and advises the Directors and Employees of the Company on procedures to be followed and disclosures to be made while dealing in securities of the Company.
Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rule 2014, is appended as Annexure- 4 to the Boards Report.
Particulars of Employees
The Information as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure- 5 to the Boards Report.
Pursuant to Section 197 (14) of the Act, Mr. Venkatachalam Sesha Ayyar, Managing Director of the Company received remuneration from one of its step down-subsidary ie. Clarion Wind Farm Private Limited during the period 01st September 2018 to 31st March 2019.
The Information as required under Rule 5(1) & Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in an annexure forming part of this Annual report. In terms of the first provision to Section 136 of the Act, the report and accounts are being sent to members excluding the aforesaid Annexure. Any member interested in obtaining the same may write to the Company Secretary at the Registered office of the Company. None of the employees listed in the said annexure are related to any directors of the Company.
Significant and Material orders
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.
Extract of Annual Return
As per the requirements of Section 92(3) of the Act and Rules framed thereunder, the extract of the annual return for FY 2019 is given in Annexure 6 in the prescribed Form No. MGT-9, which is a part of Boards Report.
The details of the policies approved and adopted by the Board are as follows:
Whistle Blower Policy (Policy on Vigil Mechanism)
The company has adopted a whistle blower mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the companys code of conduct and ethics. Details of the policy are available on our website, at https://www. orientgreenpower.com/ Investor/Companies Act & SEBI Compliance/Policy/ Whistle Blower Policy.
Insider Trading Policy
The policy provides the framework in dealing with securities of the Company. Details of the policy are available on our website, at https://www.orientgreenpower.com/Investor/ Companies Act & SEBI Compliance/Policy/ Code of conduct to regulate, Monitor and Report trading by Insiders.
Policy for Determining Materiality for Disclosures
The policy applies to disclosures of material events affecting the Company and its subsidiaries. Details of the policy are available on our website, at https://www.orientgreenpower. com/ Investor/Companies Act & SEBI Compliance/Policy/ Policy on Criteria for Determining Materiality of Events.
Nomination and Remuneration Policy
This policy formulates the criteria for determining qualifications, competencies, positive attributes and independence for the appointment of the Director (Executive/ non-executive) and also the criteria for determining the remunerations of the Directors, Key Managerial Personnel, Senior Management. Details of the policy are available on our website, at https://www.orientgreenpower.com/Investor/ Companies Act & SEBI Compliance/Policy/ Nomination Remuneration Policy.
Corporate Social Responsibility Policy
The policy outlines the companys strategy to bring about a positive impact on society through programs relating to hunger, poverty, education, healthcare, environment and lower its resource footprint. Details of the CSR policy are available on our website, at https://www.orientgreenpower. com/Investor/Companies Act & SEBI Compliance/Policy/ Policy on CSR.
Policy on Material Subsidiaries
The policy is used to determine the material subsidiaries of the company. Details of the policy are available on our website, at https://www.orientgreenpower.com/Investor/ Companies Act & SEBI Compliance/Policy/ Policy on Material Unlisted Subsidiary Company
Related Party Transactions Policy
The policy regulated all transactions between the company and its related parties. Details of the policy are available on our website, at https://www.orientgreenpower.com/ Investor/Companies Act & SEBI Compliance/Policy/ Policy on Related Party Transactions
Documents Retention and Archival Policy
The policy deals with the retentions and archival of corporate records of the Company and all its subsidiaries. Details of the policy are available on our website, at https://www.orientgreenpower.com/Investor/Companies Act & SEBI Compliance/Policy/ Preservation of Documents & Archival Policy
Investor Education and Protection Fund (IEPF)
Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (the Rules), any Application money received by the company for allotment of securities and due for refund shall be transferred to the IEPF established by the Central Government, after the completion of seven years. Further, according to the Rules, the amounts which have not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the IEPF account created by the IEPF Authority. Accordingly, on 5th October 2017 unclaimed Share Application money amounting to Rs. 16,750 has been transferred to IEPF account as per the requirements of the IEPF rules
The Company complies with all applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.
None of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143 (12) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force);
The Company does not have any scheme or provision of money for the purchase of its own shares by employees/ Directors or by trustees for the benefit of employees/ Directors; and
The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.
Electronic copies of the Annual Report 2018-19 and the Notice of the 12th Annual General Meeting are sent to all members whose email addresses are registered with the Company / depository participant(s). For members who have not registered their email addresses, physical copies are sent in the permitted mode.
Your Directors wish to convey their deep appreciation to all the employees, customers, vendors, investors, Bankers, Financial Institutions for their sincere and dedicated services as well as their collective contribution to the Companys performance.
Your Directors also thank the Government of India, Government of various States in India and concerned Government Departments for their co-operation.
|For and on behalf of the Board of Directors|
|Venkatachalam Sesha Ayyar||T.Shivaraman|
|April 29, 2019||DIN:06698233||DIN: 01312018|