GE POWER INDIA LIMITED Annual Report 2019-20 CONTENTS 01-07 CORPORATE OVERVIEW Building a world that works 01 GE Power India Limited 02 Business Divisions 03 Corporate Information 04 5 Years’ Financial Performance 05 Board of Directors and Key Managerial Personnel 06 08-81 STATUTORY REPORTS Directors’ Report 08 ANNEXURE A: 24 Dividend Distribution Policy ANNEXURE B: 25 Secretarial Audit Report ANNEXURE C: 28 Secretarial Compliance Report ANNEXURE D: 30 Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo ANNEXURE E: 31 Extract of Annual Return ANNEXURE F: 39 Particulars of Employees and other Related Disclosures ANNEXURE G: 42 Annual Report on Corporate Social Responsibility Activities ANNEXURE H: 44 Business Responsibility Report Management Discussion and Analysis 54 Corporate Governance Report 62 82-207 FINANCIAL STATEMENTS Standalone Financial Statements 82 Consolidated Financial Statements 146 NOTICE OF ANNUAL GENERAL MEETING 208 BUILDING A WORLD THAT WORKS GE (NYSE:GE) drives the world forward by tackling its biggest challenges. By combining world-class engineering with software and analytics, GE helps the world work more efficiently, reliably, and safely. For more than 125 years, GE has invented the future of industry and today it leads new paradigms in additive manufacturing, materials science, and data analytics. GE people are global, diverse and dedicated, operating with the highest integrity and passion to fulfill GE’s mission and deliver for our customers. 02 GE Power India Limited GE POWER INDIA LIMITED GE Power India Limited (GEPIL) is one of the leading players in the Indian power generation equipment market. Today, with the expansion of economy, globalization, innovation, amidst political and economic challenges, GEPIL has successfully partnered in the modernization and growth of Indian infrastructure. It has a countrywide presence of sales offices and workshops. GEPIL’s manufacturing unit is located in Noida, Uttar Pradesh & Durgapur, West Bengal. GEPIL continues to offer a comprehensive portfolio of power generation solutions with a focus on emissions control and services portfolio providing sustainable, affordable and reliable electricity. Corporate Overview Statutory Reports Financial Statements Annual Report 2019-20 03 BUSINESS DIVISIONS BOILERS MILLS AIR QUALITY CONTROL SYSTEMS SERVICES AUTOMATION & CONTROL STEAM POWER HYDRO GAS POWER SYSTEMS 04 GE Power India Limited CORPORATE INFORMATION BOARD OF DIRECTORS COMMITTEE COMPOSITION Stakeholders Relationship Committee Dr. Uddesh Kumar Kohli Mr. Mahesh Shrikrishna Palashikar Audit Committee Chairman Chairman & Non-Executive Director Dr. Uddesh Kumar Kohli (w.e.f. 27 May 2020) Mr. Prashant Chiranjive Jain Chairman Member (w.e.f. 06 May 2019) Mr. Vishal Keerti Wanchoo Mr. Arun Kannan Thiagarajan Mr. Andrew H. DeLeone Chairman & Non-Executive Director Member (upto 26 May 2020) Member (upto 05 April 2019) Ms. Neera Saggi Mr. Vijay Sharma Mr. Prashant Chiranjive Jain Member Managing Director Member (w.e.f. 30 May 2020) (w.e.f. 17 April 2019) Mr. Mahesh Shrikrishna Palashikar Mr. Sanjeev Agarwal Member (w.e.f. 27 May 2020) Mr. Andrew H DeLeone Member (upto 29 May 2020) Mr. Vishal Keerti Wanchoo Managing Director Risk Management Committee (upto 05 April 2019) Member (upto 26 May 2020) Mr. Mahesh Shrikrishna Palashikar Corporate Social Responsibility Mr. Sanjeev Agarwal Chairman (w.e.f. 27 May 2020) Whole-time Director Committee (upto 29 May 2020) Mr. Vishal Keerti Wanchoo Mr. Prashant Chiranjive Jain Chairman (upto 26 May 2020) Mr. Vijay Sharma Chairman (w.e.f. 06 May 2019) Whole-time Director & Chief Financial Officer Mr. Prashant Chiranjive Jain Mr. Andrew H. DeLeone Member (w.e.f. 06 May 2019) (w.e.f. 30 May 2020) Chairman (upto 05 April 2019) Mr. Arun Kannan Thiagarajan Mr. Andrew H. DeLeone Mr. Mahesh Shrikrishna Palashikar Member (upto 05 April 2019) Non-Executive & Independent Director Member (w.e.f. 27 May 2020) Ms. Neera Saggi Dr. Uddesh Kumar Kohli Mr. Vishal Keerti Wanchoo Member Non-Executive & Independent Director Member (upto 26 May 2020) Mr. Vijay Sharma Dr. Uddesh Kumar Kohli Dr. Uddesh Kumar Kohli Non-Executive & Independent Director Member Member Mr. Ajay Kalra Member COMPANY SECRETARY Nomination & Remuneration Committee Mr. Arun Kannan Thiagarajan AUDITORS Mr. Pradeepta Kumar Puhan Chairman Dr. Uddesh Kumar Kohli Statutory Auditors Member M/s. BSR & Co. LLP, Chartered Accountants Mr. Mahesh Shrikrishna Palashikar Internal Auditors Member (w.e.f. 27 May 2020) M/s. Ernst & Young LLP Mr. Vishal Keerti Wanchoo Secretarial Auditors Member (upto 26 May 2020) M/s. Hemant Singh & Associates, Ms. Neera Saggi Company Secretaries Member Cost Auditors M/s. Shome & Banerjee, Cost Accountants REGISTERED OFFICE CORPORATE OFFICE REGISTRAR & TRANSFER AGENT GE Power India Limited Axis House, Plot No 1-14 Kfin Technologies Private Limited CIN: L74140MH1992PLC068379 Towers 5&6, Jaypee Wish Town, Sector 128, (formerly known as Karvy Fintech Private Unit No 211-212, 2nd Floor, The Capital, Noida-201301, Uttar Pradesh Ltd.) G Block, Plot No. C-70, Bandra Kurla Ph : +91 (0120) 5011011 Selenium Tower B, Plot No. 31 Complex, Bandra East, Mumbai - 400051 Fax : +91 (0120) 5011100 & 32, Gachibowli, Financial District, Ph: +91 22 45407200 Nanakramguda, Serilingampally, Fax: +91 22 45407203 Hyderabad – 500032, Telangana Website: www.ge.com/in/ge-power-india- Ph: +91 (040) 67162222 limited Website: www.kfintech.com Email Id: [email protected] Email Id: [email protected] Corporate Overview Statutory Reports Financial Statements Annual Report 2019-20 05 5 YEARS’ FINANCIAL PERFORMANCE REVENUES PROFIT AFTER TAX (H in million) (H in million) 25,711 21,868 19,420* 20,353 14,780 851 761 266 3 (578)* FY15-16 FY16-17 FY17-18 FY18-19 FY19-20 FY16-17 FY17-18 FY18-19 FY19-20 FY15-16 NET WORTH ORDER BACKLOG (H in million) (H in million) 9,203 76,570 8,851 73,975 8,258* 8,305 8,308 59,197 45,065 42,436 FY15-16 FY16-17 FY17-18 FY18-19 FY19-20 FY15-16 FY16-17 FY17-18 FY18-19 FY19-20 *These figures are revised in accordance with Indian Accounting Standards (Ind AS) 06 GE Power India Limited BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL Mr. Pradeepta Kumar Puhan Ms. Neera Saggi Company Secretary Independent Director Mr. Sanjeev Agarwal Dr. Uddesh Kumar Kohli Whole-time Director Independent Director (upto 29 May 2020) Corporate Overview Statutory Reports Financial Statements Annual Report 2019-20 07 Mr. Vishal Keerti Wanchoo Mr. Arun Kannan Thiagarajan Mr. Vijay Sharma Chairman (upto 26 May 2020) Independent Director Whole-time Director and Chief Financial Officer (w.e.f 30 May Mr. Prashant Chiranjive Jain 2020) Managing Director Mahesh Shrikrishna Palashikar Chairman (w.e.f 27 May 2020) 08 GE Power India Limited DIRECTORS’ REPORT Corporate Overview Statutory Reports Financial Statements Annual Report 2019-20 09 Dear Shareholders, Your Directors present the 28th Annual Report of the Company along with the Audited Financial Statements for the financial year ended 31 March 2020 (‘FY 2019-20’) FINANCIAL HIGHLIGHTS (H in million) Particulars Year ended Year ended 31 March 2020 31 March 2019 Profit/(Loss) before exceptional items, tax, interest and depreciation 2,564 3,112.4 Less: Interest/Finance Costs 492.5 411.3 Less: Depreciation and amortisation expense 664.7 314.2 Profit/ (loss) before exceptional items and tax 1,406.8 2,386.9 Exceptional item (329.1) 922.9 Profit/ (loss) before tax 1,735.9 1,464.0 Provision for taxation -Current tax 268.5 859.4 -Tax related to earlier years 33.6 202.5 -Deferred tax charge (credit) 583.1 (358.4) Profit/ (loss) after tax 850.7 760.5 Balance brought forward from previous year in the statement of profit and loss 5,651.2 5,134.3 Profit available for appropriation 6,501.9 5,894.8 Appropriations a) Transferred to General Reserve - - a) Dividend paid 403.4 201.7 a) Corporate Dividend Tax (Net) paid 80.1 41.9 Balance carried forward to Balance Sheet 6,018.4 5,651.2 Proposed Dividend 134.5 403.4 DIVIDEND In compliance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘the Listing Regulations’), as amended from time to time, your Company has adopted a Dividend Distribution Policy. This policy specifies the parameters of distribution of dividend with objective of delivering sustainable value to its stakeholders. The Dividend Distribution Policy of the Company is annexed as ‘Annexure A’ to this Report. In compliance with the Dividend Distribution Policy of the Company, your Directors are pleased to recommend a dividend of H 2/- per equity share ( i.e. 20% of the face value of H 10/-each) for FY 2019-20 amounting to H 134.5 million, subject to applicable tax laws. TRANSFER TO RESERVES No amount was transferred to reserves during FY 2019-20 10 GE Power India Limited population and rise in economic activities; India is bound to witness a substantial ‘increase’ in demand for electricity in the coming years. Your company is focused on supporting generation from coal-based units, that currently comprises the largest portion of the India’s power generation as well as supporting generation from gas and hydro units. Currently, of the total installed base (IB) of ~370GW (March 2020, CEA), coal comprises ~55%, large hydro ~12%, Wind ~10%, Gas ~7%, Solar ~9%, other renewables ~5% and Nuclear ~2%. The generation mix, however, is quite different with majority ~72% coming from the coal-fired power plants over the FY 2019-20. Conventional sources of electricity are being challenged by a global focus on climate change, which the Government of India (GoI) has vigorously supported through an extensive renewable energy installation program, especially Solar and Wind. This has resulted in renewables sources capturing a significant share of the growth, resources, and available funds for the power sector in the market. While the share of renewables in the Indian electricity mix will increase over time, conventional sources will remain vital in order to meet the energy requirements of the growing economy.