Reliance Power Director Discussions


Dear Shareowners,

Your Directors present the 29th Annual Report and the Audited Financial Statements for the financial year ended March 31, 2023.

Financial performance and the state of the Companys affairs

The performance of the Company for the financial year ended March 31, 2023, is summarised below:

(Rs in lakhs)

Particulars

Financial Year ended March 31, 2023 Financial Year ended March 31, 2022*
(Standalone) (Consolidated) (Standalone) (Consolidated)
Total Income 15,017 7,88,274 18,406 7,68,673
Profit / (Loss) Before Tax 65,471 (33,898) (27,040) (87,089)
Less: Provision for Taxation (Net) - 6,391 692 4,373
Profit / (Loss) After Tax 65,471 (40,289) (27,732) (91,462)

*Previous year figures has been regrouped/reclassified wherever required.

Business Operations

During the year 2022-23 all the operating plants of the Company that are functioning through its subsidiary companies performed exceedingly well on efficiency parameters. The Companys Sasan Ultra Mega Power Plant (UMPP) (Capacity 3,960 MW) generated 29,764 Million Units (MUs) and continued its position as highly reliable and sustainable operating plant in the country, with a Plant Load Factor (PLF) of 86% against an all India average of ~ 64%. The Sasan UMPP is the Worlds largest integrated thermal 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 79.1 Million Bank Cubic Meter (BCM) including the Overburden at 68.2 Million BCM, making it one of the biggest mine in the country in terms of the overall volume handled. The Rosa Thermal Power plant (1,200 MW) generated 7510.90 MUs during the current year, delivering the consistent Year-on-Year performance. Rosa Power won Platinum Award towards Excellence in Maintenance system, Excellence in best training practices and Outstanding Leader of the year Award from Fame and Suraksha Puraskar from National Safety Council of India in financial year 2023.

The Solar PV (40 MW) Plant generated 56.64 MUs during the year. The Solar CSP (100 MW) plant generated 47.24 MUs. The Companys Wind farm at Vashpet in Sangli District of Maharashtra achieved annual generation of 47.24 MUs during the year. The Butibori Thermal plant (600 MW) remained out of operation during the year and the company is working on a resolution plan. Reliance Bangladesh LNG and Power Limited (RBLPL) is setting up the 718 MW (net) Power plant at Meghnaghat near Dhaka in Bangladesh, together with the strategic partner JERA Power International (Netherlands) - a subsidiary of JERA Co. Inc. (Japan). The project is expected to start commercial operations by end of 2023.

Management Discussion and Analysis

Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2) of 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.

Issue & Conversion of Warrants on Preferential Basis

During the year under review, the Company issued and allotted by way of Preferential Issue, 20.58 crores warrants convertible into equivalent number of Equity Shares of the Company at a price of Rs 15.55/- per warrant of the Company to VFSI Holdings Pte. Limited.

During the year under review, the Company also issued and allotted by way of Preferential Issue 33.51 crores equity shares of Rs 10 each to Reliance Infrastructure Limited, the Promoter, upon conversion of equivalent number of warrants.

The Company has received Rs 80 crores being 25% as application and allotment money and the same has been utilized for the purpose for which it was raised.

Resources and Liquidity

Pursuant to a settlement with J.C. Flowers Asset Reconstruction Private Limited & Canara Bank, the Company has fully repaid their debt. At the time of settlement, the valuation of security has depleted to the half of its original value, based on the book value of the assets due to business losses of the Company and its subsidiaries.

Dividend

During the year under review, the Board of Directors has not recommended dividend on the Equity Shares of the Company. The Dividend Distribution Policy of the Company is uploaded on the Companys website at the link https://www.reliancepower. co.in/documents/2181716/2364859/Dividend_Distribution_ Policy_RPower.pdf

Deposits

The Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 (‘the Act) and the Companies (Acceptance of Deposits) Rules, 2014. There are no unclaimed deposits, unclaimed/ unpaid interest, refunds due to the deposit holders or to be deposited with the Investor Education and Protection Fund as on March 31, 2023.

Particulars of Loans, Guarantees or Investments

The Company has complied with the applicable provisions of Section 186 of the Act during the year.

Pursuant to Section 186 of the Act, details of the Investments made by the Company are provided in Note no. 3.2(a) of the standalone financial statement.

Subsidiaries and Associate Companies

The summary of the performance and financial position of each of the subsidiary companies and associates are presented in Form AOC-1 and in Management Discussion and Analysis report forming part of this Annual Report. Also, a report on the performance and financial position of each of the subsidiaries and associates as per the Act is provided in the consolidated financial statement.

The Policy for determining material subsidiary company, as approved by the Board, may be accessed on the Companys website at the link https://www.reliancepower.co.in/ documents/2181716/2364859/Policy_for_Determining_ Material_Subsidiary-new.pdf

Standalone and Consolidated Financial Statements

The audited financial statements of the Company drawn up both on standalone and consolidated basis, for the financial year ended March 31, 2023, in accordance with the requirements of the Companies (Indian Accounting Standards) Rules, 2015 ("Ind AS") notified under Section 133 of the Act, read with relevant rules and other accounting principles. The Consolidated Financial Statements have been prepared in accordance with Ind AS and relevant provisions of the Act based on the financial statements received from subsidiaries and associates, as approved by their respective Board of Directors.

Directors

In terms of the provisions of the Act, Shri Raja Gopal Krotthapalli, Non- Executive Director of the Company retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.

During the period under review, Shri Rahul Sarin ceased to be an Independent Director of the Company due to health reasons with effect from April 22, 2022. Further, Dr. Thomas Mathew resigned as Independent Director with effect from September 09, 2022 owning to other preoccupations and commitments to complete some time bound responsibilities. The Board places on record its sincere appreciation for the valuable contribution made by Shri Rahul Sarin and Dr. Thomas Mathew during their tenure of association with the Company. Shri Ashok Ramaswamy and Smt. Manjari Ashok Kacker were appointed as Additional Directors in the capacity of Independent Directors with effect from April 22, 2022 and October 01, 2022, respectively, for a term of 5 consecutive years, subject to the approval of the Members. Thereafter, the Members of the Company duly approved their appointments on May 24, 2022 and December 29, 2022 respectively through postal ballot.

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/documents/2181716/2364859/ Familiarization_programme_for_Independent Directors.pdf In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfill the conditions specified in the Act and the Listing Regulations made thereunder and are independent of the management.

Key Managerial Personnel (KMP)

During the year under review, Shri Akshiv Singhla was appointed as the Chief Financial Officer (CFO) with effect from April 23, 2022 upon cessation of Shri Subrajit Bhowmick as CFO with effect from April 22, 2022. Further, Shri Ashok Kumar Pal was appointed as the CFO with effect from January 29, 2023 upon cessation of Shri Akshiv Singhla as CFO with effect from January 28, 2023 due to change in his role to Business Strategy. Further, Shri Ashok Kumar Pal, CFO was appointed as Manager and Smt. Ramandeep Kaur was appointed as Company Secretary cum Compliance Officer of the Company under Section 203 of the Act with effect from May 03, 2023 in place of Shri Murli Manohar Purohit, Manager and Company Secretary cum Compliance Officer Shri Ashok Kumar Pal, Manager & Chief Financial Officer and Smt. Ramandeep Kaur, Company Secretary cum Compliance Officer are the Key Managerial Personnel (KMP) of the Company.

Evaluation of Directors, Board and Committees

The Nomination and Remuneration Committee of the Board of the Company has devised a policy for performance evaluation of the Directors, Board and its Committees, which includes criteria for performance evaluation.

Pursuant to the provisions of the Act and Requlation 17(10) of the Listing Requlations, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of the Committees of the Board. The Board performance was evaluated based on inputs received from all the Directors after considering the criteria such as Board Composition and structure, effectiveness of Board / Committee processes and information provided to the Board, etc.

Pursuant to the Listing Regulations, performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

A separate meeting of the Independent Directors was also held for the evaluation of the performance of Non-Independent Directors and the performance of the Board as a whole.

Policy on Appointment and Remuneration for Directors, Key Managerial Personnel and Senior Management Employees

The Nomination and Remuneration Committee of the Board has devised a policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management

Employees. The Committee has also formulated the criteria for determining qualifications, positive attributes and independence of Directors. The Policy, inter alia, covers the details of the remuneration of non executive Directors, key managerial personnel and senior management employees, their performance assessment and retention features. The Policy has been put up on the Companys website at https://www.reliancepower.co.in/ documents/2181716/2364859/Policy on appointment   remuneration for Directors KMP and Senior Management  Employees.pdf

Directors Responsibility Statement

Pursuant to the requirements under Section 134(5) of the Act with respect to Directors Responsibility Statement, it is hereby confirmed that:

i. In the preparation of the annual financial statement, for the financial year ended March 31, 2023, 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, 2023 and of the Profit 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, 2023 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 and transactions entered into by the Company during the financial year under review with related parties were at an arms length basis and in the ordinary course of business. There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons, which could have potential conflict with the interest of the Company at large. During the year, the Company has not entered into any contract/ arrangement/transaction with related parties which could be considered material in accordance with the policy of Company on materiality of related party transactions, or which is required to be reported in Form AOC – 2 in terms of section 134(3) (h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014, as amended. All Related Party Transactions were placed before the Audit Committee for approval. 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 is uploaded on the Companys website at the link https://www. reliancepower.co.in/documents/2181716/2364859/Policy  for Related Party Transaction new22.pdf Your Directors draw attention of the Members to Note no. 11 to the Standalone financial statement, which sets out related party disclosures pursuant to Ind AS and Schedule V of Listing Regulations.

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

During the financial year ended March 31, 2023, Six Board Meetings were held. Details of meetings held and attended by each Director are given in the Corporate Governance Report forming part of this Annual Report.

Audit Committee

As on date, Audit Committee of the Board consists of Independent Directors namely Shri Ashok Ramaswamy as Chairperson, Smt. Chhaya Virani, Shri Vijay Kumar Sharma and Smt. Manjari Ashok Kacker as Members.

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, were appointed as statutory auditors of the Company at the 27th Annual General Meeting of the Company held on September 14, 2021 to hold office for a term of 5 (five) consecutive years until the conclusion of 32nd Annual General Meeting of the Company. The Company has received confirmation from M/s. Pathak H.D. & Associates LLP, Chartered Accountants that they are not disqualified from continuing as the Auditors of the Company. Your Directors draw attention of the Members to the Page no. 220 of this report which sets out the impact of Audit Qualifications on Consolidated Financial Statements.

The observations and comments given by the Auditors in their report, read together with notes on Standalone financial statements are self explanatory and hence do not call for any further comments under section 134 of the Act. No fraud has been reported by the Auditor to the Audit Committee or the Board.

Cost Auditors

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, 2024 and their remuneration is subject to ratification by the Members at the ensuing Annual General Meeting of the Company.

The Provisions of Section 148(1) of the Act continue to apply 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, 2023.

Secretarial Standards

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 of Directors has appointed M/s. Ajay Kumar & Co., Company Secretaries in Practice, to undertake the Secretarial Audit of the Company. The Audit Report of the Secretarial Auditors of the Company and its material subsidiaries for the financial year ended March 31, 2023 are attached hereto as Annexure A1 to A3. Pursuant to Regulation 24A of the Listing Regulations, the Company has obtained Secretarial Compliance Report from a Practicing Company Secretary on compliance of all applicable SEBI Regulations and circulars/ guidelines issued there under and copy of the same shall be submitted to the Stock Exchanges within the prescribed due date.

The observations and comments given by the Secretarial Auditor in the Report are self - explanatory and hence do not call for any further comments under section 134 of the Act.

Annual Return

As required under Section 134(3)(a) of the Act, the Annual Return for the financial year 2022-23 is uploaded on the Companys website and can be accessed at the link https:// www.reliancepower.co.in/web/reliance-power/investor-desk

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. 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 second 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. 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 – B forming part of this Report.

Corporate Governance

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 M/s. Ajay Kumar & Co., Practicing Company Secretaries, confirming 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 the Audit Committee. No person has been denied for direct access to the Chairperson of the 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 Companys website at the link https://www.reliancepower. co.in/documents/2181716/2359750/Whistle Blower Vigil   Mechanism Policy.pdf

Risk Management

The Board of the Company has constituted a Risk Management Committee which consists of majority of Independent Directors and also senior managerial personnel of the Company. The details of the Committee and its terms of reference, etc. are set out in the Corporate Governance Report forming part of this Report.

The Company has a Business Risk Management framework to identify, evaluate Business Risks and Opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhances Companys competitive advantage. The Business Risk framework defines the Risk Management approach across the enterprise at various levels including documentation and reporting.

The risks are assessed for each project and mitigation measures are initiated both at the project as well as the coroporate 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.

Compliance with provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company is committed to uphold and maintain the dignity of women employees and it has in place a policy which provides for protection against sexual harassment of women at work place and for prevention and redressal of such complaints. During the year under review, no such complaints were 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 formulated by the Committee may be accessed on the Companys website at the link https://www. reliancepower.co.in/documents/2181716/2359750/CSR   Policy.pdf At present, the CSR Committee of the Board consist of Independent Directors namely Smt. Chhaya Virani, as Chairperson, Smt. Manjari Ashok Kacker, Shri Vijay Kumar Sharma and Shri Ashok Ramaswamy, as Members. The disclosure with respect to CSR activities is given as Annexure - C.

Significant and Material 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 organization. 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.

Business Responsibility & Sustainability Report

Business Responsibility & Sustainability Report for the year under review as stipulated under the Listing Regulations is presented under separate section forming part of this Annual Report.

Proceeding under the Insolvency and Bankruptcy Code, 2016("IBC")

The application under Insolvency and Bankruptcy Code, 2016("IBC") pending in the last financial year has been withdrawn during the year under review.

General

During the year under review, no amount is proposed to be transferred to reserves. Further, there is no issue of equity shares with differential rights as to dividend, voting or otherwise, issue of sweat equity shares to its Directors or Employees, during the year under review.

Acknowledgements

Your Directors would like to express their sincere appreciation for the cooperation and assistance received from Members, debenture holders, debenture trustee, bankers, financial institutions, government authorities, 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.

For and on behalf of the Board of Directors

Chhaya Virani

Ashok Ramaswamy

Director Director
(DIN:06953556) (DIN:00233663)
Mumbai
May 15, 2023