|BSE: 533098||Sector: Infrastructure|
|NSE: NHPC||ISIN Code: INE848E01016|
|BSE 00:00 | 24 Apr 2020||NHPC Ltd|
|NSE 05:30 | 01 Jan 1970||NHPC Ltd|
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|Mkt Cap.(Rs cr)||20,894|
|Mkt Cap.(Rs cr)||20,894|
NHPC Ltd. (NHPC) - Director Report
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Company director report
On behalf of the Board of Directors it gives me immense pleasure topresent the 43rd Annual Report on the business and operations of the Companyalong with Audited Financial Statements Auditors' Report and review of financialstatements by the Comptroller and Auditor General of India (CAG). During the financialyear 2018-19 your Company continued to achieve new heights.
Major highlights of your Company since last report are:
Power Stations have achieved highest ever annual generation of 24193Million Units (MUs) surpassing the previous highest generation of 23404 MUs duringfinancial year 2015-16.
Total revenue and revenue from operations (net) were Rs 9086 crore andRs 8161 crore respectively. Total comprehensive income
Net Profit After Tax (PAT) and other comprehensive income wereRs 2618crore Rs 2630 crore and Rs (12) crore respectively.
Cash contribution of Rs 1894 crore was made to Government ofIndia's exchequer through dividend dividend tax and income tax in the financial year2018-19.
Company had bought back 214285714 equity shares at a price ofRs 28per share for an aggregate amount of Rs 599.99 crore.
Market capitalization of the Company as on March 31 2019 stood at Rs24861.46 crore.
Resolution Plan submitted by NHPC Limited for Lanco Teesta Hydro PowerLimited (LTHPL) has been approved by Hon'ble National Company Law Tribunal (NCLT)Hyderabad Bench on July 26 2019 subject to certain reliefs as per The Insolvency andBankruptcy Code 2016 (IBC). LTHPL is the developer of Teesta VI HE Project (500 MW) inSikkim. Cabinet Committee on Economics Affairs (CCEA) has already accorded its investmentsanction for the acquisition of LTHPL and execution of balance works of Teesta Stage-VI HEProject.
The Principal Bench of Hon'ble National Green Tribunal (NGT) videorder dated July 31 2019 has upheld the constitution of Expert Committee by Ministry ofEnvironment Forest & Climate Change (MoEF&CC) for Subansiri Lower H.E. Project(2000 MW) and observed that the project be advanced in public interest.
CCEA has accorded approval for incurring expenditure on pre-investmentactivities and various clearances for Dibang Multipurpose Project (2880 MW) in ArunachalPradesh for an amount of Rs 1600 crore.
NHPC has signed a Memorandum of Understanding (MoU) on February 3 2019with Jammu and Kashmir State Power Development Corporation Limited (JKSPDC) and Governmentof Jammu & Kashmir (GoJK) for the implementation of Ratle HE Project (850 MW) in theState of Jammu & Kashmir through a Joint Venture Company (JVC). The equityparticipation of NHPC and JKSPDC shall initially be in the ratio of 51:49.
NHPC has signed a MoU with NLC India Limited (NLCIL) on February 182019 for the trading of power. As per MoU NHPC and NLCIL will offer surplus poweravailable in northern and north-eastern region to the bulk consumers in the southernregion of the Country at an affordable price.
NHPC has been appointed as Aggregator' under Pilot Scheme-IIby Ministry of Power for procurement of aggregated power of 2500 MW for three yearsthrough the nodal agency PFC Consultancy Limited'. NHPC has signed a MoU withIIT
Roorkee for establishing NHPC Chair Professorship and Memorandum ofAgreement (MoA) for R&D collaboration. This shall facilitate co-operation in research& education in the field of hydropower.
NHPC has signed a MoU on September 3 2018 with BHEL for consultancyand co-operation in hydro-electric projects. As per the MoU both NHPC and BHEL willco-operate in joint bidding for consultancy works and hydro-electric projects whereinNHPC shall be responsible for civil works and hydro-mechanical works and BHEL shall beresponsible for electromechanical works.
NHPC has signed a MoU with Indian Army in April 2019 for undertakingconstruction of semi underground bunkers and fully underground caverns at differentlocations in India.
CCEA has accorded investment sanction for construction of Kiru HEProject (624 MW) in Jammu & Kashmir by Chenab Valley Power Projects Private Limited (AJoint Venture Company).
1. FINANCIAL PERFORMANCE
The financial results for the year ended March 31 2019 are summarizedin Table 1.
Table 1: Financial Highlights
Your Company has generated revenue of Rs 9085.96 crore duringthe financial year 2018-19. The revenue during the financial year 2017-18 wasRs 8358.77crore.
The total expenditure during financial year 2018-19 was Rs 6164.58crore as against total expenditure ofRs 5542.47 crore in the financial year 2017-18.
Your Company has earned a Profit After Tax (TotalComprehensive Income)of Rs 2618.14 crore during the financial year 2018-19 as compared to Rs 2774.91 crore inthe financial year 2017-18.
1.4 NET WORTH
Your Company's net worth as on March 31 2019 was
Rs 29214.73 crore as against Rs 28351.82 crore in the previous year.
2. SHARE CAPITAL
During the year your Company has bought back its 214285714fully paid up equity shares of Rs 10/- each from the shareholders at a price of Rs 28 perequity share pursuant to the decision taken by the Board of Directors.
The total consideration for the buy-back of shares was
Rs 599.99 crore. The paid-up capital of the Company as on March 312019 was Rs 10045.03 crore comprising 10045034805 equity shares of Rs 10/- each. Inaddition to above the Government of India divested its holding in NHPC by transferring29354564 and 49889622 shares to Bharat 22 Exchange Traded Fund (ETF) in June 2018and February 2019 respectively. After transfer of shares to Bharat 22 ETF and Buy-backthe holding of Government of India in NHPC reduced to 73.33%.
Your Company has a consistent track record of dividend payment. TheBoard of Directors has recommended a final dividend of Re. 0.75 per equity share for thefinancial year 2018-19 amounting to Rs 753.38 crore. The above dividend is in addition tothe interim dividend of Re. 0.71 per equity share amounting to Rs 713.20 crore (excludingdividend distribution tax) paid in March 2019.
Accordingly total dividend for the financial year 2018-19 comes to Rs1.46 per equity share. The total dividend pay-out (subject to approval of final dividendby the members of the Company) for the financial year 2018-19 will be Rs 1466.58 crore(excluding dividend distribution tax) representing 56% of the profits after tax asagainst dividend pay-out of Rs 1436.31 crore representing 52% of the profits after tax inthe previous year.
In pursuant to requirement of Regulation 43A of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 [SEBI LODR] your Company hasformulated a Dividend Distribution Policy. The Dividend Distribution Policy is given as aseparate annexure and is available on Company's website i.e. www.nhpcindia.com.
4. OPERATIONAL PERFORMANCE
During the financial year 2018-19 your Company has achieved highestever generation of 24193 MUs (excluding deemed generation of 279 MUs from Chutak& Nimoo Bazgo Power Stations). Your Directors are pleased to inform that five powerstations viz. Uri-II TLDP-III
TLDP-IV Nimoo Bazgo and Chutak have achieved highest ever generationsince their commissioning. The pondage power stations (except Run of the River &Restricted Plants) have achieved highest ever Plant Availability Factor (PAF) of 95%. Fivepondage power stations viz. Chamera-I Sewa-II Teesta-V TLDP-III and TLDP-IV haveachieved their highest ever PAF. The power station wise generation and PAF is given atTable 2.
Table 2: Power Station wise generation and PAF during financial year2018-19
RUN OF THE RIVER POWER STATIONS & RESTRICTED PLANTS
*Targets shown are for "Very Good" rating as per MOU withGovernment of India.
** PAF MOU targets for financial year 2018-19 were fixed for PondagePower Stations only (i.e. Run of River Power Stations and Restricted Plants wereexcluded).
Actual Achievement and MoU target of PAF for the financialunder: year2018-19is as
1. Generation excludes deemed generation from Chutak Power Station(148.2 MUs) & Nimoo Bazgo Power Station (131 MUs).
2. Unit 1 & 2 started generation from September 14 2018 &September 22 2018 respectively. Generation includes infirm power. During the financialyear under report your Company has earned net deviation charges of `185.05 crore due toefficient operation and timely response to changes in the grid frequency.
In the present scenario Renovation & Modernization (R&M) ofpower plants is considered to be a cost-effective option to complement new capacityaddition as these have a shorter gestation period with available statutory clearances andbeneficiaries. NHPC is undertaking R&M for life extension of two power stations i.e.Bairasiul (180 MW) and Loktak (105 MW). Bairasiul Power Station (3 X 60 MW) completed its35 years of commercial operation in financial year 2016-17. The work of R&M of thepower stations started in October 2018 with scheduled completion in financial year2021-22. During the period two units will be available for generation and one unit willbe kept under R&M so that beneficiaries continue to get power. Loktak Power Stationhas completed its 35 years of commercial operation in financial year 2018-19. Finalhearing of petition to approve R&M proposal has already been completed in February2019 before Central Electricity Regulatory Commission (CERC) and order is awaited.
5. COMMERCIAL PERFORMANCE
5.1 SALES AND REALIZATION
During the year under report your Company's sales from operationsstood at Rs 8161.18 crore. We are pleased to inform that your Company has been able torealize an amount of Rs 6498.70 crore including liquidation of outstanding amount ofprevious years and surcharge of Rs 190.74 crore during the financial year 2018-19. As onMarch 31 2019 the total outstanding dues of Rs 1719.02 crore (including surcharge of Rs362.93 crore) were pending for more than 60 days. The outstanding amount mainly pertainsto Power Development Department Jammu & Kashmir (Rs 707.19 crore) Uttar PradeshPower Corporation Limited (Rs 640.74 crore) and BSES Yamuna Power Limited (Rs 219.10crore). Your Company is making efforts to liquidate the outstanding dues by continuousfollow-up.
5.2 SIGNING OF POWER PURCHASE AGREEMENTS (PPAs)
The PPAs in respect of following power stations had been renewed for 35years from the date of their commercial operation with following states/distributioncompanies in financial year 2018-19:
Efforts are being made for the renewal of PPAs for balance useful lifeof power stations (i.e. 35 years) with DISCOMs in respect of expired PPAs. It is expectedthat most of the PPAs shall be renewed for 35 years in financial year 2019-20.
6. STATUS OF ONGOING PROJECTS
Your Company is presently engaged in the construction of twohydro-electric projects with aggregate installed capacity of 2800 MW. The status of theseon-going projects is as under:
6.1 PARBATI- II HYDRO-ELECTRIC PROJECT - 800 MW (4 X 200 MW) HIMACHALPRADESH:
Parbati-II Hydro-electric Project is a run of the river scheme on theRiver Parbati in Kullu District of Himachal Pradesh. Major civil works of dam intakestructure de-silting chamber pressure shafts surge shaft powerhouse and works at JiwaNallah have been completed. Water conductor system consists of 31.52 Km long HeadRace Tunnel (HRT). Excavation of 28.47 Km and concrete lining of 26.58 Km length has beencompleted till March 2019. Since the resumption of excavation of HRT by Tunnel BoringMachine (TBM) from October 2015 1671 m of tunnel has been excavated till March 31 2019.E&M works of powerhouse has also been completed.
First and second units has been successfully synchronized with grid atpart-load on September 14 2018 and September 22 2018 respectively by using dischargefrom Jiwa Nallah. Project is anticipated to be commissioned by December 2021.
6.2 SUBANSIRI LOWER HYDRO-ELECTRIC PROJECT
- 2000 MW (8 X 250 MW) ASSAM/ARUNACHAL PRADESH:
Construction of the project was started in January 2005 and 55% of theworks have been completed.
Main construction activities of the project at present have beenstalled due to directions from Hon'ble National Green Tribunal (NGT) Kolkata. Inaccordance to judgement of Hon'ble NGT in October 2017 a three member expertcommittee has been constituted by Ministry of Environment Forest & Climate Change(MoEF&CC) to review all issues pertaining to the project. However meetings of thecommittee were deferred by Principal Bench of Hon'ble NGT New Delhi due to objectionraised on its constitution. After final hearing in the matter Principal Bench ofHon'ble NGT dismissed the applications of petitioners. Thereafter Expert Committeeheld various meetings and conducted site visits and submitted their report to MoEF&CCin March
2019. However the petitioners have approached
Hon'ble Supreme Court challenging the orders of Principal Bench ofHon'ble NGT. Hon'ble Supreme Court has set aside the orders of Hon'ble NGTand ordered that the applications be restored for filing before the
Tribunal for determination afresh. The Principal Bench of Hon'bleNGT vide order dated July 31 2019 has upheld the constitution of Expert Committee byMoEF&CC and observed that the project be advanced in public interest.
7. NEW PROJECTS
The status of projects including of subsidiaries/joint venturesunder various stages of clearances/approval are given in Table 3
Table 3: Projects under clearance/approval stage:
B. THROUGH SUBSIDIARIES/JOINT VENTURES
*Approval of the Project Investment Board (PIB) for the project issubject to clearance by the Hon'ble Supreme Court. Other construction activities ofthe project are also dependent upon the decision of Hon'ble Court.
**CCEA has accorded approved for incurring expenditure onpre-investment activities and various clearances for Dibang Multipurpose Project inArunachal Pradesh for an amount of Rs 1600 crore.
***MOU has been signed between NHPC and Uttar Pradesh New and RenewableEnergy Development Agency (UPNEDA) for setting up of 50 MW solar power project in UP. Theland for the project is presently available for 32 MW only.
Your Directors are please to inform that Resolution Plan submitted byNHPC Limited for Lanco Teesta Hydro Power Limited
(LTHPL) has been approved by Hon'ble NCLT Hyderabad Bench on July26 2019 subject to certain reliefs as per IBC. LTHPL is the developer of Teesta-VI HEProject (500 MW) in Sikkim. CCEA has already accorded its investment sanction for theacquisition of LTHPL and execution of balance works of Teesta-VI HE Project.
In addition to above a Memorandum of Understanding (MoU) has beensigned for implementation of Ratle H.E. Project (850 MW) through a Joint Venture Companyto be incorporated initially with equity shareholding of 51% by NHPC and 49% by Jammu& Kashmir State Power Development Corporation Limited (JKSPDC). The equity of NHPCshall be purchased by JKSPDC from the end of 5th year after the date ofcommissioning over 15 years through equal installments.
Your Company is making efforts to diversify its activities by takingprojects of different sources of renewable energy viz. wind solar etc. The activities ofthe Company for establishment of such projects are as under:
8.1 SOLAR POWER PROJECTS
Your Company has initiated the process for the development of 10 MWfloating solar power project in Kallada Kerala. The bids for the project are underevaluation. Signing of PPA is being expedited before issue of letter of award. Variousactivities before the implementation of the project are under process. NHPC has alsoreceived in-principle approval for setting-up of one solar park of 100 MW capacity inOdisha from Ministry of New and Renewable Energy Government of India. In the first phase40 MW solar project shall be developed in Ganjam District. Transfer of land signing ofPPA and grid connectivity approval is in process. Bids for EPC contract have already beeninvited. Development of balance capacity is also being explored.
8.2 WIND POWER PROJECTS
NHPC has initiated the process for the development of
72 MW (10%) capacity Wind Power Projects in the Palakkad District ofKerala to tap the high wind potential available in the State. The DPR of the project hasalready been prepared. In the first instance 8 MW capacity Wind Power Project shall beimplemented as per available power evacuation infrastructure. Land allotment signing ofPPA and grid connectivity approval is in process.
8.3 POWER TRADING LICENSE
NHPC has entered into new avenues in the Power Sector.
During the year NHPC has obtained Category-I license from CERC forinterstate trading of electricity in whole of India. NHPC is registered at DEEP (Discoveryof Efficient Electricity Price) e-bidding portal and has obtained trader membership inIndian Energy Exchange (IEX) & Power Exchange of India Limited (PXIL). In addition toabove your Company has been appointed as Aggregator' under
Pilot Scheme-II by Ministry of Power for procurement of aggregatedpower of 2500 MW for three years through the nodal agency PFC Consultancy Limited inMarch 2019.
9. DETAILS OF SUBSIDIARIES JOINT VENTURES AND ASSOCIATECOMPANIES
Your Company has the following subsidiaries/associates/joint venturecompanies as on March 31 2019:
*As the required matching contribution was not made by the other JointVentures Partners the shareholding of NHPC was 51.94% as on
A report on the financial position of each of the subsidiariesassociates and joint venture companies as per the Companies Act 2013 has been provided asan annexure to the consolidated financial statements and hence not repeated here for thesake of brevity.
The audited financial statements of subsidiary companies are not beingattached to the audited annual financial statements of the Company. In terms of Section136 of the Companies Act 2013 any shareholder who desires to have a copy of aforesaidfinancial statements may write to the Company Secretary NHPC Limited. The companies arealso available on the website of the Company i.e. www.nhpcindia.com.
10. RURAL ROAD PROJECTS
Your Company is executing works relating to construction of rural roadsin six districts of Bihar in pursuance to a MoU signed with Ministry of Rural DevelopmentGovernment of India and Government of Bihar under Pradhan Mantri Gram Sadak Yojna (PMGSY).
Under the scheme your Company has to construct 758 roads having costof Rs 1725.65 crore and its maintenance for five years after construction. As on March31 2019 753 roads covering 3084 Km have been completed. Construction of balance 5 roadsin Vaishali District is in progress. Maintenance period of 734 roads covering 2982 Km hasalso been completed.
11. CONSULTANCY SERVICES
The technical "know-why and know-how" proficiency andexperience a wide range of world class consultancy services from "Concept toCommissioning along with operation and maintenance" in the field of hydro power andrelated works. At present your Company is providing consultancy services related to riverbasin studies survey works design and engineering hydrological studies contract &construction management etc. The major consultancy assignments of your Company includeproviding of engineering & design consultancy services for the implementation ofMangdechhu HE Project in Bhutan consultancy services for the implementation of PakaldulKiru & Kwar HE Project in Jammu & Kashmir and overhauling of Kalpong Power Stationin Andaman & Nicobar islands.
To make other organizations take benefit of the knowledge of NHPCprogrammes were offered to participants from Public and Private Sector in the area ofelectrical mechanical design & engineering aspects of hydropower projects. A largenumber of Indian and foreign delegates participated in these programmes.
12. FINANCING OF NEW PROJECTS
Your Directors believe that internal accruals of the Company would besufficient to finance the equity component for the new/upcoming projects. Your Company iswell positioned to raise the borrowings as per CERC norms given its low geared capitalstructure and strong credit ratings.
Your Company is exploring domestic as well as international borrowingoptions including overseas development assistance provided by multilateral/bilateralagencies to mobilize the debt required for the planned capacity addition programmes.
13. INFORMATION TECHNOLOGY AND COMMUNICATION
Your Company considers information technology as an importantconstituent for the attainment of sustainable growth in business. Various units of theCompany across India are connected to Corporate Office communication links. InformationTechnology (IT) and Cyber Security Policy are in place to ensure optimum and secureutilization of the IT&C assets owned by your Company. Enterprise Resource Planning(ERP) application has been implemented in NHPC to integrate all its business functions toimprove information availability transparency and decision making.
As per Government of India directives e-procurement Governmente-Market (GeM) and e-Reverse auction system is operational in the Company. Your Company isalso acting as a nodal agency for CERT-HYDRO to guide and monitor the cyber securityrelated activities in the constituent member organizations. Efforts are also being madefor enhanced deployment of e-office applications with the aim to have paperless office.
14. HUMAN RESOURCE MANAGEMENT
During the year T&HRD has organized competency and capacitybuilding programmes in the areas of Civil & Electrical Engineering Design HRFinance and other core areas to ensure that employees of the Company keep abreast with thelatest technological advancement.
The reimagined approach to learning and development has helped theCompany to provide 20744 man-days training to its employees during the period.
In addition to these programmes executives were nominated incustomized training programmes organized at India's leading institutes like IIMsIITs CBIP etc. to enhance their skills for achieving higher productivity and efficiencyin the organization. A total 583 executives were sponsored in different programmesorganized by the above institutes. Besides executives were also sponsored for highereducation courses viz.
MBA etc. and deputed for foreign training programmes to become aware ofthe global practices in the field of hydropower development.
NHPC has four training centers viz. Salal (Jammu & Kashmir) Uri(Jammu & Kashmir) Tanakpur (Uttarakhand) and Chamera-I (Himachal Pradesh). Thesetraining centers also organized skill development programmes in different trades for theemployees.
NHPC in its process to benchmark with leading CPSEs in the countryorganized various cross sectoral programmes to understand practices followed in therespective organizations. The programmes organized were on Contracts andArbitration' Solar Development' Hydropower Development' etc.
During the year under report revised pay scales w.e.f. 01.01.2017 forBoard Level Below Board Level executives supervisors and workmen were implemented in theCompany. In addition to above pay scales of executives including Board Level executiveswere also regularized w.e.f. January 1 2007 in March 2019.
15. INDUSTRIAL RELATIONS
The Industrial Relations in the Company remained cordial and harmoniousduring the year. Employees actively contributed in the decision making process for thegrowth of the Company.
16. RESETTLEMENT AND REHABILITATION (R&R)
Your Company appreciates the difficulties of populace displaced duringthe execution of its projects. Resettlement and Rehabilitation Plans are formulated forProject Affected Families (PAFs) to provide economic sustenance under the provisions ofThe Right to Fair Compensation and Transparency in Land Acquisition Rehabilitationand Resettlement Act 2013'. Recently NHPC has formulated a policy for reservationof certain type of works through competitive bidding for PAFs and locals residing near the
17. VIGILANCE ACTIVITIES
The systems procedures and processes in your Company are aimed to makethe organization a transparent entity. All the procedures are documented to monitor andhandle vigilance complaints and disciplinary cases. Your Company has a VigilanceDepartment headed by Chief
Vigilance Officer to ensure transparency objectivity and quality ofdecision making in its operations.
Vigilance Department co-ordinates with CBI CVC and other concerneddepartments of the government. Six vigilance cases were concluded during the financialyear 2018-19. As on March 31 2019 three vigilance cases relating to misconductmisappropriation and disproportionate assets against employees were under investigation.As a part of preventive vigilance circulars and guidelines are being issued regularlybased on various inspections / intensive examinations carried out from time totime. Vigilance awareness week and other vigilance awareness programmes are also beingorganised by the Company to promote transparency and ethics in working system.
18. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Adequate internal financial controls with reference to financialreporting are in place in the Company. During the year such controls were tested and noreportable material weakness in the design or operation was observed.
19. RISK MANAGEMENT
Your Company has an elaborate Risk Management Policy to have structuredand disciplined approach towards risks. The development and implementation of RiskManagement Policy has been covered in the Management Discussion and Analysis Report whichforms part of this report.
20. PROCUREMENT FROM MICRO & SMALL ENTERPRISES
Government of India has notified Public Procurement Policy for Microand Small Enterprises (MSEs) Order 2012 to support marketing of products produced andservices rendered by them. In compliance to the policy annual procurement plan includingitems to be procured from Micro & Small Enterprises (MSEs) are uploaded on
NHPC's website for the benefit of MSEs.
The benefits to MSEs like exemption from tender fees and earnest moneydeposit purchase preference interest on delayed payments and exemption from priorexperience prior turnover criteria subject to meeting of quality and technicalspecifications are also extended to encourage these enterprises.
During the financial year 2018-19 your Company has procured productsand services from MSEs which constituted 67.49% of the total annual procurement valueagainst the mandate of 25% set by Ministry of Micro Small and Medium Enterprises Govt.of India. During the year
918 MSEs were benefited out of which 45 MSEs belonged to SC/ST categoryand 23 MSEs were owned by women.
NHPC is also registered on the Trade Receivables
Discounting System (TReDS) platform for financing of trade receivablesof Micro Small & Medium Enterprises (MSMEs). TReDS platform facilitates thediscounting of invoices of MSMEs leading to prompt generation of working capital for theirregular business operations.
Your Company had also organized/participated in five vendor developmentprogrammes in co-ordination with Ministry of Micro Small and Medium Enterprises Govt. ofIndia to encourage participation of Micro and Small Enterprises.
21. IMPLEMENTATION OF OFFICIAL LANGUAGE
Your Company has complied the provisions of the
Official Languages Act 1963 and relevant rules during the financialyear 2018-19. Attractive incentive schemes for employees have been implemented toencourage employees for active participation in promotion of
Hindi by contributing to articles/write-ups for in-house magazinesreading hindi books and by noting and drafting in Hindi etc. During the year NHPC hadorganized various programmes for its employees to encourage the use of official languageHindi. In addition to above Hindi typing training programmes Hindi workshops anddepartmental computer workshops were regularly organized in the Company. Rajbhashamagazines titled Rajbhasha Jyoti' and Nagar Saurabh' were alsopublished to encourage the use of Hindi. The efforts made by the Company for theprogressive use of Hindi were appreciated at various forums. Your Company's websitealso has bilingual mode of operating i.e. in Hindi as well as in English. During the yearTown Official Language Implementation Committee (TOLIC)
Faridabad being operated by NHPC received "Second
Prize" in Region "A" for outstanding work in the fieldof
Rajbhasha implementation for the year 2017-18 from Ministry of HomeAffairs Govt. of India.
22. SPORTS AND OTHER ACTIVITIES
During the year 2018-19 NHPC had participated in various Inter CPSUtournaments organized under the aegis of Power Sports Control Board Ministry of Power.
NHPC has organized inter CPSU Kabaddi Tournament at
Guwahati from February 26 to 28 2019. As per NHPC's
Sports Policy your Company has given scholarship to four youngsportspersons during the financial year 2018-19.
Your Company had coordinated painting competitions under the NationalAwareness Campaign on Energy Conservation organized by the Ministry of Power
Government of India amongst school students in the states of Jammu andKashmir Manipur Sikkim Arunachal Pradesh and Madhya Pradesh. Shri Rajesh
Kumar SM (HR) Loktak Power Station was adjudged "Best NodalOfficer" for showing highest percentage increase in student participation overprevious year by the Ministry of Power Government of India.
During the year your Company has also participated in various National& International exhibitions to showcase its activities.
23. SOCIAL INITIATIVES
Your Company and its employees are continuing with the noble traditionof extending help to the Country in the times of distress. NHPC employees had contributed
Rs 1.61 crore to Prime Minister's National Relief Fund for floodaffected people of Kerala and Rs 1.85 crore in Bharat ke Veer' fund in honourof soldiers martyred in Pulwama attack. In addition to it NHPC has also provided twotransformers to Kerala State Electricity Board for restoring their hydropower plantsdamaged due to flood. NHPC has also contributed Rs 1 crore to the Chief Minister'sRelief Fund for natural calamities in Himachal Pradesh. Under the Pradhan MantriBhartiya Janaushadhi Pariyojana' Director (Personnel) inaugurated a PMBJPcentre' at Tanakpur Power Station in August 2018 to make generic medicinesavailable at cheaper rates.
24. INITIATIVESTOWARDSENVIRONMENTPROTECTION AND CONSERVATION
Your Company is aware of its obligation to conserve and protectenvironment. During the investigation stage probable impact on environment whileexecuting the projects are assessed and identified.
Management Plans are proposed and implemented to compensate the adverseimpacts of the project by taking necessary measures. In addition to above construction ofbuildings is designed to make them environment friendly. We are pleased to share that
Neer Shakti Sadan' NHPC Office Complex Faridabad has beenawarded the Four Star GRIHA Rating by the GRIHA Council in June 2019. GRIHA (Green Ratingfor Integrated Habitat Assessment) is a joint initiative of Ministry of New and RenewableEnergy (MNRE) Govt. of India and The Energy and Resources Institute (TERI).
Large scale plantation programmes were undertaken across variouslocations of NHPC to celebrate World Environment Day on June 5 2019. Talks onenvironmental aspects were also delivered by heads of projects/power stations to spreadawareness and sensitivity about environment issues. In addition to above culturalprogrammes slogan competitions awareness rally and distribution of sapling to localswere also undertaken at some power stations.
25. RIGHT TO INFORMATION
Your Company has placed an elaborate mechanism to deal with the mattersrelated to Right to Information Act2005. All the applications/appeals received throughthe online RTI portal launched by Department of Personnel & Training (DoPT) areattended through the portal only. In compliance to the provisions of the RTI Act 2005NHPC has placed various documents/records on its website (www.nhpcindia.com) for widerinformation of the general public.
During the financial year 2018-19 519 (266 online) applications and 65(38 online) first stage appeals were received under RTI Act out of which 517 (99.61%)applications and 64 (98.46%) first stage appeals were dealt/replied accordingly. Further5 appeals were filed by the applicants before the Central Information Commission (CIC)which were also disposed-off.
26. CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) is an integral part of yourCompany's business philosophy. The aim of CSR activities of your Company is to createa deeper positive impact on society at large with focus on key areas of developmentespecially by addressing the social economic environmental and welfare concerns ofstakeholders and equitable development through empowerment of marginalized andunderprivileged sections/ communities. Your Company has undertaken number of programmesunder CSR in the areas of Education Health Sanitation Drinking Water RuralDevelopment Skill Development Environment Women
Empowerment etc. A separate report on CSR activities undertaken by yourCompany during the financial year
2018-19 including the reasons for shortfall in mandatory expenditure onCSR activities is given as annexure to this report. The Corporate Social Responsibility& Sustainability Policy of your Company is available athttp://www.nhpcindia.com/writereaddata/Images/pdf/
27. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
During the financial year 2018-19 the Company has not entered into anymaterial transaction with any of its related parties. The Company's major relatedparty transactions are generally with its subsidiaries and associates for providingconsultancy services leasing out of properties and manpower services. All the contracts/ arrangements / transactions entered into with related parties were on arm's lengthbasis intended to further the Company's interest. Accordingly the disclosure ofRelated Party Transactions as required under Section 134(3)(h) of the Companies Act 2013in Form AOC-2 is not applicable. During the financial year
2018-19 NHPC has raised "GOI Fully Serviced Bonds" in thenature of unsecured redeemable non-convertible non-cumulative and taxable long termbonds to fund Extra Budgetary Resources of Rs 2017.20 crore for meeting accruedliabilities of "Power System Development Fund" scheme of Government of India.
Attention of the members is also drawn to para no. 8 of note no. 34 ofthe financial statements which sets out related party disclosures as per Ind AS-24.
28. WHISTLE BLOWER MECHANISM
Your Company had framed a Whistle Blower Policy as part of vigilmechanism to provide appropriate avenues to the employees directors vendors andcontractors to bring instances of unethical/improper conduct to the knowledge of competentauthority under the policy. The policy provides that confidentiality of whistle blowershall be maintained and he/she shall not be subjected to any discriminatory practice. Thepolicy also allows direct access to the Chairperson of Audit Committee in exceptionalcases.
A senior officer has been designated as Coordinator for effectiveimplementation of the policy and dealing with complaints received under the policy. Duringthe financial year 2018-19 one complaint was received under the Whistle Blower Policywhich was investigated and closed in accordance with procedure under the policy. Furtherno person was denied access to the Audit Committee on issues pertaining to Whistle BlowerPolicy.
29. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act2013 have been implemented in the Company withthe objective to provide protection to women employees against sexual harassment atworkplace and redressal of their complaints. Internal Complaints Committees (ICC) has beenconstituted at various locations to redress complaint(s) against sexual harassment ofwomen employees.
Regular workshops are being organised for women employees to createawareness about their rights and facilities at workplace. Programmes for sensitizing themale employees are also being conducted regularly.
During the financial year 2018-19 no complaint of sexual harassmentwas received. However a compliant of the previous year was disposed-off during the year.
30. DEBENTURE TRUSTEES
In compliance to the requirements of SEBI LODR the details ofDebenture Trustees appointed by the Company for different series of Bonds is provided atreference information of this Annual Report.
31. STATUTORY AND OTHER INFORMATION
Information required to be furnished as per the Companies Act 2013SEBI LODR Guidelines issued by Department of Public Enterprises (DPE) on CorporateGovernance for CPSEs etc. is annexed to this report as follows:
32. AUDIT AND AUDITORS' REPORT 32.1 SECRETARIAL AUDIT
The Board has appointed M/s Agarwal S. & Associates
Company Secretaries Delhi to conduct Secretarial
Audit of the Company for the financial year 2018-19.
The Secretarial Auditor in its report has given someobservations/qualifications. The report of Secretarial Auditor along with management replyis given at
In compliance to Regulation 24A of SEBI LODR
Secretarial Audit report of NHDC Limited which is a material unlistedsubsidiary company of NHPC Limited is also given at Annexure-X.
32.2 STATUTORY AUDIT
The Statutory Auditors of your Company are appointed by the Comptroller& Auditor General of India (CAG).
CAG has appointed following Joint Statutory Auditors for the financialyear 2018-19:
1. M/s DSP & Associates New Delhi;
2. M/s Lodha & Co Kolkata; and
3. M/s Arora Vohra & Co Jammu
The Joint Statutory Auditors have given un-modified report on thefinancial statements of the Company for financial year 2018-19. Further no instance offraud by any officer or employee of the Company has been reported by the Auditors underSection 143(12) of the Companies Act 2013.
The standalone financial statements of the Company along-with StatutoryAuditors' Report thereon are given at Annexure-XI. The consolidated financialstatements of the Company along-with the Statutory Auditors'
Report thereon are given at Annexure-XII. 32.3 REVIEW OF ACCOUNTS BYCAG
The comments of CAG on the standalone and consolidated financialstatements of your Company for the financial year 2018-19 after conducting supplementaryaudit under Section 143(6)(a) of the Companies Act 2013 are given at Annexure-XIII.32.4 COST AUDIT
As per the requirement of Companies (Cost Records and Audit) Rules2014 the Cost Accounting records are being maintained by all power stations of your
Company. The consolidated Cost Audit Report in XBRL format for thefinancial year ended March 31 2018 was filed with the Central Government on October 152018. The following firms of Cost Accountants were appointed to conduct audit of costaccounting records of power stations for the financial year 2018-19 under Section
148 of the Companies Act 2013:
The Cost Audit Report for the financial year ended March 31 2019 shallbe filed within the prescribed time period.
33. LOANS AND INVESTMENTS
Section 186 of the Companies Act 2013 (except subsection 1) regardingloans made guarantees given or securities provided is not applicable to NHPC beingengaged in the business of providing infrastructure facilities.
34. PARTICULARS OF EMPLOYEES
In accordance to notification dated June 5 2015 issued by the Ministryof Corporate Affairs Government Companies are exempted from the disclosure requirementsof Section 197 of the Companies Act 2013. Therefore such particulars have not beenincluded as part of Directors' Report.
As regards policy on remuneration of Key Managerial Personnel and otheremployees of the Company their pay structure allowances and other benefits are governedby relevant DPE Guidelines. Pay structure and allowances of the Company are also availableon the website at http:// www.nhpcindia.com/writereaddata/images/pdf/RTI%20
35. BOARD AND COMMITTEES OF THE BOARD
The Board of Directors of your Company met ten times during thefinancial year 2018-19. Details regarding dates and attendance of the Board Meetings aregiven in the Corporate Governance Report which forms part of this report.
Your Company has Audit Committee Stakeholders' RelationshipCommittee Nomination & Remuneration Committee Risk Management Committee Committeeon Corporate Social Responsibility & Sustainable Development and other Board LevelCommittees. Details regarding composition and meetings of these Committees are given inthe Corporate Governance
Report which forms part of this report.
There was no instance during the year where the Board had not acceptedrecommendation(s) of committee(s) of the board which is mandatorily required to berecommended by the committee(s) for the approval of the Board of Directors.
36. PERFORMANCE EVALUATION OF THE DIRECTORS AND THE BOARD
Your Company has framed a policy on performance evaluation of BoardBoard level Committees and Independent Directors in line with SEBI LODR read withCompanies Act 2013. The annual performance evaluation of Board Board level Committeesand
Independent Directors of the Company was discussed in the meetings ofthe Board of Directors and Nomination & Remuneration Committee. The IndependentDirectors in their separate meeting held on June 11 2019 decided not to carry out theperformance evaluation of Functional Directors as their performance is being evaluated bythe Ministry of Power (Administrative
Ministry). The process of annual performance evaluation of Board Boardlevel Committees and Independent Directors is given in the Corporate Governance Report.Annual performance evaluation of senior management personnel of the Company is beingcarried out as per rules of the Company read with relevant DPE Guidelines.
37. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under clause (c) of subsection (3) ofSection 134 of the Companies Act 2013 with respect to the Directors' ResponsibilityStatement it is hereby confirmed that:
(a) in the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures; (b) the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period;
(c) the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; (d) the Directors had prepared the annualaccounts on a going concern basis;
(e) the Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively; and
(f) the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
38. SECRETARIAL STANDARDS
Your Company has followed applicable Secretarial
Standards relating to Meetings of the Board of Directors'and General Meetings' issued by Institute of Company Secretaries of India(ICSI).
No disclosure or reporting in respect of the following items isrequired as there was no transaction on these items during the year under report:
1. Issue of equity shares with differential rights as to dividendvoting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of theCompany under any scheme.
3. Significant or courts or tribunals which impact the going concernstatus or Company's operations in future.
4. Occurrence of any material changes and commitments after the closeof the financial year till the date of this report which affect the financial position ofthe Company.
5. Details related to public deposits as required under Chapter V ofthe Act.
40. WEBSITE LINK FOR VARIOUS POLICIES OF THE COMPANY
Website links for the information required to be hosted on the websiteof the Company i.e. www.nhpcindia.com as per the Companies Act 2013 SEBI LODR etc. areas follows:
41. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
The following changes in composition of Board of
Directors took place since the last annual report:
1. Shri Nalini Kant Jha Independent Director ceased to be Director onthe Board of the Company due to his sudden demise on November 5 2018. The Board places onrecord its deep appreciation for the valuable contribution and guidance given by
Late (Shri) N. K. Jha during his tenure as Director.
2. Ministry of Power vide its order dated November 22 2018re-appointed Shri Satya Prakash Mangal Prof. Kanika T. Bhal and Prof. Arun Kumar asNon-official Independent Directors for a period of one year with effect from the date ofcompletion of their tenure i.e. November 17 2018 or until further orders whichever isearlier. Accordingly Board has appointed them as Additional Directors w.e.f. November 182018 till the conclusion of next AGM unless re-appointed.
Details of remuneration/sitting fee paid to Directors during the year2018-19 are given in the Corporate Governance Report.
All Independent Directors of the Company as on March 31 2019 havedeclared that they meet the criteria of independence as laid down under Section 149 (6) ofthe Companies Act 2013 and Regulation 16(1)(b) of SEBI LODR. They have further declaredthat they are not aware of any circumstance or situation which exist or may be reasonablyanticipated that could impair or impact their ability to discharge their duties with anobjective independent judgment and without any external influence.
The Board would like to acknowledge with thanks the guidance andco-operation received from Government of India particularly the Ministry of PowerMinistry of New & Renewable Energy Ministry of Finance Ministry of EnvironmentForest & Climate Change Department of Public Enterprises Central ElectricityAuthority Central Electricity Regulatory Commission Appellate Tribunal for ElectricityState Governments State Utilities Power Distribution Companies and valuable clients ofconsultancy assignments.
The Board also expresses its gratitude to the Shareholders Bankers andFinancial Institutions for their continued support and confidence reposed by them in theCompany.
We place on record our special appreciation to the contribution ofcontractors vendors and consultants in implementation of various projects of the Company.
We also acknowledge the constructive suggestions received from theOffice of Comptroller & Auditor General of India Statutory Auditors SecretarialAuditor and Cost Auditors.
Your Directors wish to place on record their sincere appreciation forthe unstinting efforts and dedicated contributions put in by the NHPCians at all levelsto ensure that the Company continues to grow and excel.
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