| Disclosure in board of directors report explanatory INDIAN ENERGY EXCHANGE LIMITED CIN: U74999DL2007PLC277039 Regd. Off.: Unit No. 3-6, 4th Floor, TDI Centre, District Centre, Jasola, New Delhi - 110025 NOTICE NOTICE is hereby given that the tenth Annual General Meeting of the Members of Indian Energy Exchange Limited will be held on Wednesday, September 21, 2016 at 2.00 P.M. at the Indian Energy Exchange Limited at Fourth Floor, TDI Centre, District Centre, Jasola, New Delhi – 110025, India to transact the following business: ORDINARY BUSINESS: 1. To receive, consider and adopt the Audited Profit and Loss Account for the year ended March 31, 2016 and the Balance Sheet as at that date together with the Reports of the Board of Directors and the Auditors thereon. 2. To declare a Final Dividend of Rs. 20/- per Compulsory Convertible Preference Shares (CCPS) of Rs. 10/- each and to confirm the Interim Dividend of Rs. 7/- per CCPS already paid for the year ended March 31, 2016. 3. To declare a Final Dividend of Rs. 20/- per Equity Shares of Rs. 10/- each and to confirm the Interim Dividend of Rs. 7/- per Equity Shares already paid for the year ended March 31, 2016. 4. To appoint a Director in place of Mr. Rajiv Malhotra (DIN: 02383396), who retires by rotation, and being eligible, offers himself for re-appointment. 5. To appoint a Director in place of Mr. Ajeet Kumar Agarwal (DIN: 02231613), who retires by rotation, and being eligible, offers himself for re-appointment. 6. To ratify the appointment of Statutory Auditors and to fix their remuneration, and in this connection, to consider and if thought fit, to pass with or without modification, the following resolution as ORDINARY RESOLUTION: “RESOLVED THAT pursuant to the provisions of Section 139 and 142 and other applicable provisions of the Companies Act, 2013 and the Companies (Audit & Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force), the appointment of M/s. BSR & Associates LLP, Chartered Accountants, (ICAI Firm Registration No. 116231W), who was appointed as Statutory Auditors of the Company for one term of five consecutive years i.e. upto the conclusion of thirteenth Annual General Meeting (AGM) to be held in the financial year 2018-19, subject to ratification at every AGM, be and is hereby ratified for the financial year 2016-17, at such remuneration and reimbursement of out-of-pocket expenses as may be recommended by the Audit Committee and approved by the Board of Directors of the Company.
RESOLVED FURTHER THAT the Board of Directors and/ or Company Secretary of the Company be and is hereby authorised to do all such acts, deeds, matters and things as may be considered necessary to implement this resolution.” SPECIAL BUSINESS: 7. To consider, and if thought fit, to pass, with or without modification(s), the following resolution as an ORDINARY RESOLUTION: “RESOLVED THAT Mr. Puneet Yadu Dalmia (DIN: 00022633) who was appointed as an Additional Director of the Company with effect from October 15, 2015 by the Board of Directors, who holds office upto the date of this Annual General Meeting of the Company under Section 161(1) of the Companies Act, 2013 (the “Act”), is eligible for appointment and in respect of whom the Company has received a notice in writing under Section 160(1) of the Act from a Member proposing his candidature for the office of Director, be and is hereby appointed as the Director (Non-executive) of the Company, whose term of office shall be liable to retire by rotation. RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to do all such acts, deeds and things as may be required or considered necessary or incidental thereto.” | By Order of the Board of Directors | | For Indian Energy Exchange Limited | | | | Sd/- | Date: August 03, 2016 | Vineet Harlalka | Place: New Delhi | CFO & Company Secretary | | Membership No. ACS-16264 |
NOTES: 1. An Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 (Act), in respect of Special Business to be transacted at the Meeting is annexed hereto. 2. Items 4-5 of the Notice: In view of the provisions of the Act which prescribes that Non-Independent Directors only will be reckoned for the purpose of the provisions relating to retirement by rotation under Section 152 of the Act, the Company has determined retiring directors (being non-Independent Directors only) and their eligibility for re-appointment under the above new provision. The profile of the Directors seeking re-appointment is given under the head Directors’ Profile in the Annual Report. 3. A member entitled to attend and vote at the AGM is entitled to appoint a proxy to attend and vote in the meeting, instead of himself and the proxy need not be a member of the company. 4. Pursuant to provisions of Section 105 of the Companies Act, 2013, read with the applicable rules thereon, a person can act as a proxy on behalf of members not exceeding fifty and holding in the aggregate not more than ten percent of the total share capital of the Company carrying voting rights, may appoint a single person as proxy, who shall not act as a proxy for any other member. 5. Instrument of proxies in order to be effective must be lodged with Company not less than 48 hours before the commencement of the meeting. A form of proxy and Admission Slip is enclosed. 6. Corporate Members intending to send their Authorized Representatives to attend the meeting are requested to send a certified copy of Board Resolution authorizing their representatives to attend and vote on their behalf at the meeting in accordance with the provisions of Section 113 of the Companies Act, 2013. 7. Members/proxies are requested to bring their duly filled in Attendance slip along with their copy of Annual report to the Meeting 8. The Register of Members and Share Transfer Register will remain closed from September 17, 2016 to September 21, 2016 (both days inclusive). 9. The voting rights of Members shall be in proportion to their number of shares held by them each fully paid up in the paid up equity share capital of the Company as on September 16, 2016.
10. Subject to the provisions of Section 126 of the Companies Act, 2013, Final Dividend as recommended by the Board of Directors, if declared at the Meeting, shall be payable by means of direct Bank credit or demand drafts to those Members whose name (s) stand registered: a) As Beneficial Owner as at the end of business on September 16, 2016 as per the lists to be furnished by the National Securities Depository Limited in respect of the shares held in electronic form; and b) As Members in the Register of Members of the Company/ Registrar & Share Transfer Agent after giving effect to valid share transfer in physical form lodged with the Company as at the end of business on September 16, 2016. 11. Members holding shares in physical form are requested to consider converting their holding to dematerialized form to eliminate all risk associated with physical shares and for ease in portfolio management. Members can contact the Company’s Registrar and Transfer Agents (RTA), M/s. Karvy Computershare Private Ltd., for assistance in this regard. The contact details are as below – M/s Karvy Computershare Private Limited Unit – Indian Energy Exchange Limited Karvy Selenium Tower B, Plot No. 31 & 32, Gachibowli, Financial District, Nanakramguda, Serilingampally Hyderabad – 500032 Tel: +91-40 6716 1500 Fax: +91-40 2300 1153 Email: einward.ris@karvy.com 12. Members who hold shares in physical form are requested to notify immediately any change in their addresses to the Registrar and Transfer Agent (RTA) and to their respective Depository Participants, in case of shares held in electronic mode. 13. Members who have not registered their e-mail address so far are requested to register their e-mail address for receiving all communication including Annual Report, Notices, Circulars etc. from the Company electronically. 14. Members seeking any information relating to the accounts shall write to the Company at least 10 days before the date of the meeting, so as to enable the management to keep the information ready.
15. All documents referred to in the accompanying notice are available for inspection at the Registered Office of the Company on all working days during business hours upto the date of the Annual General Meeting. | By Order of the Board of Directors | | For Indian Energy Exchange Limited | | | | Sd/- | Date: August 03, 2016 | Vineet Harlalka | Place: New Delhi | CFO & Company Secretary | | Membership No. ACS-16264 |
EXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013 ITEM NO. 7: The Board of Directors of the Company, based upon the recommendations received from the Nomination & Remuneration Committee of the Company and pursuant to Section 161(1) of the Companies Act, 2013, read with the rules framed there under has appointed Shri. Puneet Yadu Dalmia as an Additional Director of the Company with effect from October 15, 2015. In terms of Section 161(1) of the Act, Shri. Puneet Yadu Dalmia will hold the office of Director only upto the date of the ensuing Annual General Meeting. The Company has received a notice in writing from a member under provisions of Section 160 (1) of the Act, proposing candidature of Shri. Puneet Yadu Dalmia for the office of Director of the Company. Shri. Puneet Yadu Dalmia aged 44 years holds a B. Tech. degree from the Indian Institute of Technology, Delhi and is a gold medalist from the Indian Institute of Management, Bangalore in Strategy and Marketing. He has over 18 years of experience in cement industry having started his career as the co-founder and Chairman of one of the most profitable e-recruitment websites in India, which was later acquired by the Monster.com, a Nasdaq listed multinational company. Mr. Puneet Yadu Dalmia has conceptualized the growth strategy and governance architecture of the Dalmia Bharat Group to focus on its core businesses and is spearheading the strategic planning of the group. Shri. Puneet Yadu Dalmia, is not disqualified from being appointed as a Director of the Company in terms of Section 164 of the Act and Regulations 22A of the CERC (Power Market) Regulations 2010 and have given his consent to act as a Director of the Company. Your Directors recommend the resolution for approval of the Members by way of Ordinary Resolution. None of the Directors/Key Managerial Personnel and their relatives in any way concerned or interested in the said resolution except Mr. Puneet Yadu Dalmia being interested to the extent of his appointment. | By Order of the Board of Directors | | For Indian Energy Exchange Limited | | | | Sd/- | Date: August 03, 2016 | Vineet Harlalka | Place: New Delhi | CFO & Company Secretary | | Membership No. ACS-16264 |
Directors’ Report Dear Members, Your Directors are pleased to present the Tenth Annual Report together with the Audited Statement of Accounts and the Auditors’ Report for the financial year (FY) ended March 31, 2016. 1. FINANCIAL RESULTS AND OPERATIONS The Company’s financial and operational performance for the year ended March 31, 2016 is summarized below: (Amount in Rupees) Particulars | 2015-16 | 2014-15 | Operating Income | 1,750,279,035 | 1,447,786,121 | | | | Other Income | 251,118,269 | 317,520,244 | | | | Total Income | 2,001,397,304 | 1,765,306,365 | | | | Less: Total Expenditure | 535,172,664 | 438,699,025 | | | | Profit before tax | 1,466,224,640 | 1,326,607,340 | | | | Less: Provision for Tax | 464,916,943 | 422,406,261 | | | | Profit after tax | 1,001,307,697 | 904,201,079 | | | | Add: Brought forward P&L balance from prev. year | 1,041,196,975 | 1,553,053,704 | | | | Profit available for Appropriation | 2,042,504,672 | 2,457,254,783 | | | | Less: Proposed Dividend on Preference Shares (CCPS) | 30,328,620 | 36,394,344 | | | | Less: Interim Dividend on Preference Shares (CCPS) | 14,972,762 | 75,821,550 | | | | Less: Dividend Distribution Tax on Preference Shares | 9,222,295 | 20,294,905 | | | | Profit available for Appropriation | 1,987,980,995 | 2,324,743,984 | | | | Less: Proposed Dividend on Equity Shares | 576,243,860 | 327,549,144 | | | | Less: Interim Dividend on Equity Shares | 197,327,606 | 682,394,050 | | | | Less: Dividend Distribution Tax on Equity Shares | 157,480,949 | 182,654,169 | | | | Less: Transfer to General Reserve | Nil | 90,420,108 | | | | Less: Adjustment due to revision in depreciation rates | Nil | 529,538 | | | | Balance carried forward to Balance Sheet | 1,056,928,580 | 1,041,196,975 | | | |
Your Company has sustained and maintained its leadership position in the Power Exchange industry in India during the year. During the year your Company’s performance has shown some improvement, the Day Ahead Market (DAM) volumes grown by 21%, the Term Ahead Market (TAM) volumes grown by 38% and REC volume volumes grown by more than 100%. The total operating revenue of the Company was at Rs. 175.03 crores as against a total operating revenue of Rs. 144.78 crores during the last fiscal, reflecting an increase of 21%, whereas the total revenue for the fiscal was at Rs. 200.14 crores as against the Rs. 176.53 crores during the last fiscal, reflecting an increase of only 13%, because of lower treasury income due to fall in interest rates and higher dividend payout during the year. Further during the year the operating cost (other than REC incentive and CSR expenses) increased from Rs. 39.24 crores to Rs. 44.35 crores mainly due to higher employee cost, technology and legal & professional expenses. In addition, since there is an oversupply of RECs in the market, to promote the RECs market and create its demand among the buyers, the Company had given incentive of Rs. 5.34 crores during the year, in previous year the incentive paid was Rs. 1.44 crores. The Profit after Tax (PAT) of your Company for the year ended March 31, 2016 stood at Rs. 100.13 crores as compared to Rs. 90.42 crores during the previous year, reflecting an increase of 11% on Year to Year basis. Major highlights of your Company’s achievements during FY 2015-16 Overview: With an aim to provide electricity on 24x7 basis, the Government has been laying significant emphasis on capacity addition with greater focus on renewable energy. As per Central Electricity Authority (CEA), the total installed power capacity in India was 303 GW as on 31 March’16. In a span of last five years, the installed capacity grew almost 75%, from 174 GW in fiscal 2011 to 303 GW in fiscal 2016. However, the growth in power generation was not commensurate with the growth in generation capacity. The generation grew from 809 BUs in fiscal 2011 to 1,164 BUs in fiscal 2016, indicating a growth of 44 % in span of five years. With fast paced addition in capacity, the power supply position was quite comfortable with deficit of around 2%. From short term power market perspective, as per the CERC Market Monitoring Reports, in fiscal 2016, the short term market traded about 115 BUs, constituting about 10% of total generation. The power exchanges grew the fastest registering growth of 20%. Overall, the share of power exchange market in total generation increased to 3.1% from 2.7% in the previous fiscal, while the share of long term market decreased to 90% from 91% in previous fiscal. Share of Power Market, Fiscal 2015-16 [Graphs on Share of Power Market, Fiscal 2015-16 is separately attached in PDF format with Form AOC-4(XBRL)] During the fiscal 2016, the installed capacity grew to 303 GW from 267 GW in fiscal 15 indicating a growth of 13% whereas energy generation increased to 1,164 BU from 1,097 BU in fiscal 15 reflecting a growth of just 6%. With low pace of growth in demand ample generation was available for sale on the exchange platform which resulted in low market clearing price (MCP) of Rs 2.73 per unit, about 22% lower than Rs 3.51 per unit in the previous fiscal. The low price discovery led to increase in cleared volume of 21% on your company’s platform. This scenario is expected to continue and your Company is likely to see positive impact on the cleared volume in fiscal 2016-17 too. On the transmission front, significant capacity addition took place which addressed the transmission congestion which otherwise prevails in import of power to southern region as well as northern region. With the commissioning of the Gwalior – Jaipur 765 kV double circuit line, import capacity of northern region increased by around 2,000 MW. Further, with commissioning of Narendra – Kohlapur 400 kV double circuit line, import capacity of southern region increased by about 500 MW. In addition, there were many other intra-regional lines which were commissioned during the fiscal resulting in reduction in transmission congestion. In this backdrop, the volume lost by your Company due to transmission congestion reduced by about 31% to 2,144 MUs compared to 3,086 MUs lost in fiscal 2015. During the year, introduction of UDAY (Ujwal DISCOM Assurance Yojana) was one of the significant interventions by the Government of India. The scheme comprises four initiatives - improving operational efficiencies of Discoms, reduction of cost of power, reduction in interest cost of Discoms and enforcing financial discipline on Discoms through alignment with state finances. It allows state governments, which own the Discoms, to take over 75 percent of their debt as of September 30, 2015 by issuance of State government bonds and the Discoms are expected to issue the bonds for the remaining 25 percent of their debt. As on date, ten (10) States have signed MoUs with Government of India, endorsing their commitment to implement distribution reforms. Implementation of UDAY is likely to result in reducing financial obligation of Discoms and improvement in their operational inefficiency. Once the Discoms revive operationally and financially, their capacity to procure power will increase which in turn will boost the demand for power. On 28 January 2016, the Government of India notified amendments in the National Tariff Policy 2006. The new Tariff Policy makes a strong pitch for promotion of clean energy, tightens the tariff setting process and promotes competition, efficiency in operations and improvement in quality of power supply. The amendments would ensure improved financial viability of the sector and increased demand of power from Discoms. Further, the Policy stipulates electricity to all consumers on 24x7 basis at reasonable and competitive rates which will boost demand for power. The Tariff Policy also provides for a new formulation for Cross Subsidy Surcharge (CSS). This formulation will increase CSS in a few states and, at the same time, the Policy also caps CSS at 20% of retail tariff of the relevant industry category. On 21 July 2015, IEX operationalized round-the-clock transaction in the intra-day contracts on the basis of direction notified by CERC. With round the clock trade in intraday contracts, the Discoms can schedule power closer to real time basis and replace unscheduled interchanges with scheduled drawal thereby reducing their real time deviations. Your Company has seen improvement in Term-Ahead Market with introduction of round the clock trading in intra-day contracts. Transparency and objectivity remained high on Government’s agenda. On 31 March 2016 Vidyut Pravah – a web/mobile based platform was launched. The platform provides competitive prices discovered and surplus power available on the exchange for each 15 minute time block on a State wise basis. The platform gives a clear message that the country is surplus in power and Discoms can buy power from your Company’s platform at very competitive rates. This initiative is expected to compel Discoms to procure and supply power instead of opting for load shedding. In order to align the regulatory framework with the fast-changing necessities on the ground, the CERC notified amendments in several of its key regulations such as: Deviation Settlement Regulations 2015, Open Access Regulations in Inter-state Transmission 2008, Ancillary Services Operations Regulations 2015, IEGC Regulations 2010, REC Regulations 2010 and Sharing of Inter-State Transmission Charges and Losses Regulations 2010. A synopsis of key regulatory developments at the State level is as below: • All States issued their tariff orders except Kerala, Rajasthan, Tamil Nadu and Tripura. • Maharashtra notified new Open Access Regulations on 31st March, 2016, allowing consumers to avail open access on a day-ahead basis on power exchanges, which was restricted earlier.
However, the Discom has not yet started issuing No Objection Certificates (NOC) to industries for participation in the Day ahead Market on power exchanges. • Gujarat continued to constrain the issuance of NOC to open access consumers. Consequently, consumers are pursuing litigations in the Gujarat High Court. • Rajasthan also notified new Open Access Regulations in 2016, wherein some restrictive provisions concerning purchase of power through Exchange are there. Several Consumers have approached High Court of Rajasthan against these Regulations. • Gujarat, Haryana and Himachal Pradesh imposed Additional Surcharge which may affect viability of open access in these States. All these developments may impact the performance of your Company in the near future. Electricity Market 33,957 MUs (after considering real time curtailment) were traded by your Company in DAM in fiscal 2015-16 in comparison to 28,141 MUs last fiscal. The average daily volume was 93 MUs, about 21% up from 77 MUs in previous fiscal. A few key highlights of the Day-Ahead Market in this fiscal are as below: • One Nation- One Grid- One Price was realized on six different occasions in DAM (10 Nov’15, 29 Dec’15, 14 Jan’16, 30 Jan’16, 31 Jan’16 and 1 Feb’16). This implied there was no transmission congestion across the country. • Highest ever volume traded in DAM: 137 MUs on 15th September, 2015 • Total volume transacted in the short term market by DAM: 29% • Sell bids: 56,514 MUs, 38% up from 41,079 MUs in fiscal 15 • Buy bids: 43,101 MUs, almost same as 43,293 MUs in fiscal 15 • Market Clearing Price (MCP): Rs 2.73/unit, about 22% lower than Rs 3.51/unit in previous fiscal • Final Cleared volume: 34,067 MUs, up 21% from the previous fiscal [Graphs on IEX Cleared Volume in Fiscal 16 vs Fiscal 15 is separately attached in PDF format with Form AOC-4(XBRL)] [Graphs on Average ACP in Fiscal 16 vs Average ACP in Fiscal 15 is separately attached in PDF format with Form AOC-4(XBRL)] • Participation Trend: Total registered participants increased to 3,872 from 3,487 in the previous fiscal, more than 11% increase. Open Access consumer base also increased to 3,421, up by 12% from 3,047 in last fiscal. On a daily average basis, 1,035 participants traded in the DAM, as compared to 818 participants in last fiscal. The highest participation ever was observed on 21st May, 2015 when 1,263 participants traded in DAM. • Congestion: Northern and Southern States were most affected due to congestion in the Inter-State transmission corridors, adversely impacting the price for power in both regions. Prices in these States were higher in comparison to prices in other States: - For import to North, the corridors were congested for about 9% of the time through the year. - For import to South, the corridors were congested for about 44% of the time through the year. With commissioning of new transmission lines, there was reduction in transmission congestion in import of power to northern states as well as southern states. [Graphs on Percentage of time congestion in Northern and Southern Import is separately attached in PDF format with Form AOC-4(XBRL)] Overall, 2,144 MUs could not be traded due to congestion while in the last fiscal 3,086 MUs were lost. Term-Ahead Market (TAM): A total of 330 MUs were scheduled through TAM, 38% up from 239 MUs in the previous fiscal. The highest volume traded so far in this segment was achieved in July 2015 when close to 69 MUs were traded. REC Market During the year 31.39 lacs RECs were traded at Exchange, which is highest ever, reflecting increase of more than 100% in comparison with the previous fiscal. As of July, 2016 the REC inventory is about 172 lac RECs. The total RECs traded in a year are significantly lower than the RECs issued. This is mainly because the Discoms are not complying with the Renewable Purchase Obligation (RPO). In order to promote renewable energy, the Government has been placing thrust on RPO compliance which is expected to increase REC transaction on your Company’s platform. Other Developments • The Parliament Standing Committee on Energy has tabled a report, before the Parliament, on the “Role, Performance and Functioning of the Power Exchanges” in India. The report deals with various aspects of the Power Market such as Competition in Power Market, Role of Power Exchanges in development of the Power Market, Performance of the Power Exchanges, Price discovery mechanism of the Power Exchanges, Shareholding Pattern of the Power Exchanges, Cross border electricity trade through Power Exchanges, Promoting Renewable Energy Certificates trading through Power Exchanges, Role of Regulators in the development of the Power Market etc. As a pre-emptive measure, the board of the Company has formed a Committee consisting of board members and an independent renowned expert from Power Sector to assess efficacy of systems and processes of the Exchange to ensure avoidance of extraneous intervention and price fixing, to assess whether prices discovered on Day Ahead Market are fair and transparent and are a reflection of market conditions of supply /demand /Transmission factors and that whether the Clearing and settlement process of the exchange is transparent or not. The said Committee has submitted its report to the board concluding that a well defined and efficient system exists to ensure transparency and fair price discovery and to avoid extraneous intervention in the exchange and that the price discovery process, and contract specifications followed are in compliance with CERC approved business rules and that IEX DAM prices are a reflection of supply and demand factors. • During the previous year, the Central Electricity Regulatory Commission (‘CERC’) has appointed M/s Deloitte Touche Tohmatsu India Pvt. Ltd. (‘Deloitte’) for carrying out comprehensive review of affairs of your Company, covering the fY- 2011-12, 2012-13 & 2013-14. M/S Deloitte post review has submitted its report to the CERC and the CERC vide its order dated June 10, 2016, has directed the Exchange to comply with the recommendations made by the Deloitte in its review report. The Board of your Company has reviewed the observations/ recommendations made by Deloitte in its report and the Board is taking all the necessary actions as required to ensure compliance with all the recommendations made therein. • During the last year, the Company has enter into a ‘Perpetual License Agreement’ with M/s Financial Technologies (India) Limited, to acquire a perpetual technology license for its exchange trading software and the same was also approved by the shareholders of the Company at previous Annual General Meeting of the Company. The said transaction was not executed, as the same has been challenged by one of the Shareholders of the Company viz the M/s PTC India Financial Services Limited (‘PFS’). The implementation of the agreement is on hold, as per the order of the Hon’ble Delhi High Court and matter has been referred for Arbitration as per the Singapore International Arbitration Center (SIAC) rules and the matter is pending before the SIAC Arbitration. Recognition and Accolades Your Company received several accolades for its performance during the year, including the India Power Award 2015 for being the “Leader in Market Development”. Future Outlook: The aspiration of the Government to provide electricity on round the clock basis, implementation of distribution reforms through UDAY scheme, better fuel availability for power plants, generation capacity addition and augmentation of transmission infrastructure will lead to development of a vibrant power market in the country. With installed capacity of 303 GW, the peak demand in the fiscal was only 153 GW. Further, the present installed capacity can deliver generation of 1,650 BU while the actual generation in this fiscal was only 1,164 BU indicating a power surplus position in the country. The coal availability at reasonable cost with merchant generators also improved resulting in higher sell volume by these generators on your Company’s platform. This scenario is likely to continue in next 4-5 years. Besides, reduction in transmission congestion has provided added comfort to Discoms that they will be able to purchase power through your Company’s platform as per their needs. The Day Ahead Market provides a flexible platform to Discoms for meeting their demand. The Government of India aspires to achieve renewable capacity of 175 GW by 2022. The grid integration of renewable energy is a challenge considering the variable and infirm nature of renewable resources. Developed countries like Germany which have 30% of gross electricity consumption through renewables are able to manage scheduling and balancing of this green energy by transacting all their energy through Exchange. Similarly, in India also, the Power Exchange platform needs to be leveraged to balance renewable energy and to secure the grid operations. In the backdrop of aforementioned developments, the short-term market is slated to grow further and reach new heights. Power market development is your Company’s key focus in an endeavor to spur growth and progress. Introduction of Cross-Border Trade, Green Contracts and ESCerts Market are a few market segments your Company endeavors to introduce this year. The trade in the extended Intra-day contracts is another dynamic segment where liquidity is expected to gather pace in the near future. Moreover, with enhanced availability of the inter-state transmission corridor, liquidity and depth in the market are likely to increase further. 2. DIVIDEND a) Interim Dividend During the year under review, after considering the free reserve and cash surplus of the Company, your Directors’ had declared and paid an interim dividend of Rs. 7/- per Equity Shares of Rs. 10/- each (i.e. 70% of nominal value) which totalled to Rs. 237,498,864/- (inclusive of Dividend Distribution Tax of Rs. 40,171,258/-). Further, as the holder of Compulsory Convertible Preference Shares (CCPS) were also entitled to a dividend at a rate equal to the dividend paid on the Equity Shares till the conversion date of CCPS, an interim dividend of Rs. 7 per CCPS of Rs. 10/- each (i.e. 70% of nominal value) was also paid to the CCPS holders of the Company which entailed an outflow of Rs. 18,020,864/- (inclusive of Dividend Distribution Tax of Rs. 3,048,102/-). b) Final Dividend Your Directors have further recommended a final dividend of Rs. 20/- per Equity Share of Rs. 10/- each (i.e. 200% of nominal value) for the FY ended March 31, 2016, subject to the approval of the Shareholders at the ensuing Annual General Meeting, totalling to Rs. 693,553,551/- (inclusive of Dividend Distribution Tax of Rs. 117,309,691/-). As stated above, the CCPS holders are also entitled to a dividend at a rate equal to the dividend paid on the Equity Shares till the conversion date of CCPS. Accordingly, dividend on CCPS at the rate of Rs. 20/- per CCPS of Rs. 10/- each (i.e., 200% of nominal value) as recommended by the Board of Directors of the Company, if approved at the ensuing AGM would entail an outflow of Rs. 36,502,813/- (inclusive of Dividend Distribution Tax of Rs. 6,174,193/-) The total dividend for the FY ended March 31, 2016 on Equity Shares and CCPS (including interim and final) aggregated to Rs. 27/- per share respectively. The total appropriation on account of interim dividend and final dividend (if approved) and corporate tax on dividend thereon would be Rs. 985,576,092/-for the year. The final dividend, if approved at the ensuing AGM, will be paid to members whose names appear in the Register of Members as on September 16, 2016 and in respect of shares held in dematerialised form, it will be paid to members whose names are furnished by the National Securities Depository Limited (NSDL), as beneficial owners as on that date, subject to the applicable statutory provisions. Release of Outstanding Dividend The Central Electricity Regulatory Commission (‘CERC’) vide its order dated May 13, 2014 in suo-motu Petition No. SM/341/2013 had given directions to the Company that: a) to ensure that M/s Financial Technologies (India) Limited (FTIL) divests its entire shareholding in the Company; b) pending divestment of the equity shares, the voting rights of FTIL shall stand extinguished and any corporate benefit in lieu of such shareholding shall be kept in abeyance or withheld by the Company. The FTIL was holding 77,75,515 numbers of equity shares of the Company constituting 28.486% of the paid-up equity share capital of the Company. In compliance with the CERC order, the corporate benefits in lieu of shareholding of FTIL in the Company was put on hold until the FTIL divest its entire stake in the Company, and accordingly the Company has kept on hold the applicable dividend on the FTIL’s shareholding, out of total dividend declared by the Company, which was amounting to Rs. 318,796,115/- # pending divestment of FTIL stake in the Company. Subsequently, the Company has released the FTIL’s dividend, which was kept on hold, pursuant to Hon’ble Supreme Court’s directions vide its order Dated 09-Feb-2016, post FTIL’s sale of entire stake in the Company. #(Final equity dividend amounting to Rs. 31,102,060 (final dividend of Rs. 4 per equity share for year ended March 31, 2014) and Interim dividend amounting to Rs. 194,387,875 (the Company had declared an interim dividend of Rs.25 per equity share relating to the year ending March 31, 2015), final equity dividend amounting to Rs. 93,306,180 (final dividend of Rs. 12 per equity share for year ended March 31, 2015)) 3. TRANSFER TO RESERVES No Amount has been transferred to any of the Reserve during the year. 4. CHANGES IN SHARE CAPITAL During the year under review, there was no change in the Authorized and Paid up Share Capital of the Company. However, as on March 31, 2016, consequent upon conversion of 15,16,431 Compulsory Convertible Preference Shares (CCPS) of Rs. 10/- each into 15,16,431 Equity Shares of Rs. 10/- each, the Issued, Subscribed and Paid-up equity share capital of the Company increased from Rs. 272,957,620/- to Rs. 288,121,930/- and correspondingly the Compulsory Convertible Preference Shares Capital of the Company decreased from Rs. 30,328,620/- to Rs. 15,164,130/-. The detailed break-up of the share capital is furnished in Note-3 to the ‘Notes to Accounts’ of the Audited financials of the Company. 5. AUDIT COMMITTEE As required under Section 177 of the Companies Act, 2013 (the ‘Act’), your Company has a competent Audit Committee consisting of majority of Independent Directors as its members. The members of Audit Committee are Mr. D K Mehrotra– Non-executive Independent Director (as the Chairman), Prof. K T Chacko –Non-executive Independent Director and Mr. Bejul Somaia–Non-executive Director (w.e.f. May 04, 2016). (Mr. Ajeet Kumar Agarwal –Non-executive Director was the member of Audit Committee upto May 04, 2016). All the Members of the Committee have requisite qualification for appointment on the Committee and possess sound knowledge of finance, accounting practices and internal controls. During the FY 2015-16, the Audit Committee of the Company met regularly and actively reviewed the adequacy and effectiveness of internal control systems and suggested improvements for the same. The recommendations given by the Audit Committee were considered and reviewed by the members of the Board of the Company. However, there was no case where the Board dissented or did not accept the recommendation of the Audit Committee. 6. INTERNAL AUDITORS M/s. RRCA & Associates, Chartered Accountants were the Internal Auditors of your Company, during the year M/s RRCA & Associates, Chartered Accountants, merged with M/s Ravi Rajan & Co., Chartered Accountants w.e.f. December 01, 2015, and effectively from the said date the Internal Audit assignment is being carried out by M/s Ravi Rajan & Co. Chartered Accountants. The Internal Auditors have reviewed the design and operating effectiveness of various process covering the surveillance, operational, statutory compliances, business development, administrative, human resource, financial & accounting aspects of your Company. The Internal Auditors were satisfied with the management response on the observation and recommendations made by them during the course of their audit and have expressed satisfaction with the internal systems, controls and process followed by your Company. 7. STAUTORY AUDITORS The Shareholders of the Company at the eighth Annual General Meeting (AGM) held on June 24, 2014, had appointed M/s BSR & Associates LLP, Chartered Accountants, (Firm Registration No. 116231W/W-100024) as the Statutory Auditors of the Company for one term of five consecutive years i.e. upto the conclusion of 13th AGM to be held in the FY 2018-19, subject to ratification of their appointment by the members at every AGM of the Company. Accordingly, in terms of the first proviso to Section 139(1) of the Companies Act, 2013 and based upon the recommendation of Audit Committee and Board of Directors of the Company, the ratification of appointment of M/s BSR & Associates LLP Chartered Accountant, Statutory Auditors is being sought from the Members of the Company at the ensuing 10th AGM. The Company has received a confirmation from Auditors to the effect that their ratification of appointment, if made, would be in accordance with the provisions of Section 141 of the Companies Act, 2013 and the Rules made thereunder. 8. AUDITORS’ REPORT M/s. BSR & Associates LLP, Chartered Accountants have audited the accounts of your Company for the FY 2015-16 and their report is annexed together with the explanatory notes therein, which are self-explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013. The Auditors’ Report does not contain any qualification, reservation or adverse remark. 9. ADEQUACY OF INTERNAL CONTROL SYSTEMS The Company maintains appropriate policies, procedures and systems to ensure orderly and efficient conduct of its business, including adherence to Company’s policies, monitoring procedures, to ensure that all assets are safeguarded against loss from unauthorized use or disposition, prevention and detection of frauds and errors accuracy and completeness of accounting records, and the timely preparation of reliable financial information. The Internal control system is improved and modified on an on-going basis to meet the changes in business conditions, accounting and statutory requirements. The external and internal auditors review the effectiveness and efficiency of these systems and procedures on regular basis to ensure that all the assets of the Company are protected against any loss and that the financial and operational information is accurate and complete in all respects. The Audits are conducted on an ongoing basis and significant deviations, if any are brought to the notice of the Audit Committee of the Board of Directors following which corrective action is recommended for implementation. All these measures facilitate timely detection of any deviations /irregularities and early remedial steps. 10. INTERNAL FINANCIAL CONTROL As per Section 134(5)(e) of the Companies Act 2013, the Directors have an overall responsibility for ensuring that the Company has implemented robust system and framework of Internal Financial Controls. This provides the Directors with reasonable assurance regarding the adequacy and operating effectiveness of controls with regards to reporting, operational and compliance risks. The Company has devised appropriate systems and framework including proper delegation of authority, policies and procedures, risk based internal audits, risk management framework and whistle blower mechanism. The Company had already developed and implemented a framework for ensuring internal controls over financial reporting. This framework includes entity level policies, process and operating level standard operating procedures. The entity level policies include anti-fraud policies (like code of conduct, conflict of interest, confidentiality and whistle blower policy) and other polices (like organization structure, HR policy, IT security policy and business continuity and disaster recovery plan). The company has also prepared Standard Operating Procedures (SOP) for each of its processes. During the year, controls were tested and no reportable material weakness in design and effectiveness was observed. 11. WHISTLE BLOWER POLICYAND ANTI FRAUD POLICY The Board, pursuant to the provisions of Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 has framed a “Whistle Blower and Anti-fraud Policy”. Your Company believes in highest possible standards of ethical practices, moral and legal conduct of business operations and to maintain these standards, the Company encourages its Directors and employees to come forward and freely communicate their concerns about illegal or unethical practices/ behaviour, actual or suspected, fraud or violation of company’s code of conduct or ethic policy to the appropriate authority so that timely and speedy investigations can be undertaken and corrective action could be taken if warranted. This Policy has been framed with a view to provide a mechanism inter alia enabling stakeholders, including Directors, individual employees of the Company to freely communicate their concerns about illegal or unethical practices and to report genuine concerns or grievance as also to report to the management concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct or ethics policy. The Policy provides for (a) adequate safeguards against victimization of persons who use this Mechanism; and provides (b) direct access to the Chairperson of the Audit Committee of the Board of Directors of the Company. Details of the Whistle Blower and Anti-fraud Policy are made available on the Company’s website www.iexindia.com. 12. FIXED DEPOSITS Your Company has not invited or accepted any fixed deposits under Section 73 of the Companies Act, 2013 during the year under review. 13. HUMAN RESOURCE DEVELOPMENT Your Company has created a favourable work environment and is focused on innovation and competencies. Your Company is future-oriented and encourages growth and development through various training and orientation programmes. Your Company has its own in house Training Department with an aim to provide training and create awareness among Power Market Stakeholders, Exchange Members/Clients and Employees of the organization. Your Company has also entered into an alliance with IIT Kanpur and Administrative Staff College of India, Hyderabad for organizing quality Trainings, serving all Power Market Stakeholders. During the year under review, alongside the National Level Residential Programs at IIT Kanpur & ASCI Hyderabad, several refresher Trainings were also carried out by your Company for its Members and Clients. The regular Training Sessions are also organized for the Employees towards updating their knowledge & skills either in-house teams or through external faculty. Further, the Company has also formulated and implemented an Employee Stock Option Scheme 2010, to motivate and instil a sense of ownership among its employees, which was approved by a Special Resolution passed by the Shareholders in the Extraordinary General Meeting held on March 26, 2010. The Company had adopted the trust route for allotting equity shares and the Company has allotted 606,572 equity shares of Rs. 10/- each to the IEX ESOP Trust during the year 2010 to manage the ESOP as per defined ESOP Scheme. The details of the option granted during the year and outstanding as on March 31, 2016 is appended as Annexure-A to this Report. 14. DIRECTORS a) Changes in Directors During the financial year 2015-16, there have been following changes in the position of Directors of the Company: 1. Mr. D K Mehrotra (DIN: 00142711), Non-executive Independent Director of the Company was elected as the Chairman of the Board w.e.f. April 23, 2015 by the Board of Directors at their Meeting held on April 23, 2015. 2. Mr. Puneet Yadu Dalmia (DIN: 00022633) was appointed as a Non-executive Additional Director of the Company w.e.f. October 15, 2015 by the Board of Directors of the Company at their Meeting held on October 15, 2015. Mr. Puneet Yadu Dalmia holds office as Additional Director until the ensuing AGM of the Company and is eligible for re-appointment. 3. Mr. Vishal Vijay Gupta (DIN: 01913013) resigned as Director of the Company w.e.f. March 7, 2016. In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of your Company, Mr. Rajiv Malhotra and Mr. Ajeet Kumar Agarwal, Directors retires by rotation at the ensuing Annual General Meeting and being eligible offer himself for re-appointment. Necessary resolutions for the appointment and re-appointment of the aforesaid Directors have been included in the Notice convening the ensuing AGM and details of the proposal for appointment and re-appointment are mentioned in the Explanatory Statement to the Notice. b) Declaration by Independent Directors Mr. D K Mehrotra, Prof. K T Chacko and Mr. Vallabh Bhanshali are the Independent Directors on the Board of your Company. Based upon the confirmation/ disclosures received from Independent Directors, the Board is of the opinion that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 & the Rules made thereunder and the CERC (Power Market) Regulations, 2010. c) Meetings of Board During the FY 2015-16, the Board met 7 (Seven) times as against the minimum requirement of four (4) Board Meetings as per the Companies Act, 2013. d) Nomination and Remuneration Policy In order to comply with the provisions of Section 178 of the Companies Act, 2013, the Board of Directors of your Company had already constituted “Nomination and Remuneration Committee”. Further, the policy formulated by the Nomination and Remuneration Committee on Directors’ Appointment and Remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matter provided under Sub-section (3) of Section 178 of the Companies Act, 2013, as adopted by the Board, is appended as Annexure-B to this Report. e) Statement on Annual evaluation made by the Board As per Clause (1) of Para VII to Schedule IV and other applicable provisions of the Companies Act, 2013, and performance evaluation policy, the Nomination and Remuneration Committee of the Board had carried out the evaluation of every Director’s Performance based on specified criteria. Further, the Board had carried out an Annual performance evaluation of its own performance, the Independent Directors as well as the evaluation of the working of the Committees. 15. RISK MANAGEMENT POLICY Your Company being an exchange has adequate risk management systems and procedures operating within the organization. Pursuant to Regulation 25(ii) of the CERC (Power Market) Regulations, 2010, the Company has a Risk Management Committee which reviews the risk management framework and process of the organization on half yearly basis. In addition, to further strengthen the Risk Management systems, the Board of Directors of the Company has devised and implemented a comprehensive ‘Risk Management Policy’. The Policy provides for constitution of an Enterprise Risk Management Committee (‘ERMC’) and the ERMC would review and analyze internal and external risks and define risk mitigation steps. In addition to above, the Audit Committee of the Board has additional oversight in the area of financial risks and controls. Major risk identified by the business and functions are systematically addressed through mitigating actions on a continuous basis. 16. CORPORATE SOCIAL RESPONSIBILITY As per the provisions of Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee of its Board of Directors. The Board of Directors of the Company has approved Corporate Social Responsibility Policy (CSR Policy) based on the recommendation of the CSR Committee. The Company has initiated activities in accordance with the said Policy, with a aim to address issues in the ambit of environmental sustainability, economic empowerment and social development by adopting an integrated, holistic and need-based approach. The main focus areas of the Company’s CSR Policy are: • Promote decentralized renewable energy by creating opportunities for access and awareness. • Support socio-economic development of underprivileged communities through improved access to livelihoods, sanitation, water, healthcare and education. • Endeavour to integrate the cause of women empowerment while designing projects. • Contribute to relief and rehabilitation measures in disaster-affected parts of the country. The CSR Policy of the Company placed on the website of the Company viz at www.iexindia.com The Annual Report on CSR as required pursuant to Section 135 of the Companies Act, 2013 is appended as Annexure-C to this report 17. CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION Though the operations of your Company are not energy intensive, your Company takes adequate measures to reduce energy consumption by using energy-efficient lightning in office, computer systems and procuring energy-efficient equipment’s. As an on-going process, your Company continuously evaluates new technologies and techniques to make infrastructure more energy efficient. Since your Company does not carry out any manufacturing activity, the particulars regarding conservation of energy, technology absorption and other particulars as required by the Companies (Accounts) Rules, 2014 are not applicable. 18. RESEARCH AND DEVELOPMENT As your Company is a Power Exchange and not directly involved in any manufacturing activity, your Company is not directly involved in any Research and Development activities. 19. FOREIGN EXCHANGE EARNINGS & OUTGO The information required pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 on the foreign exchange earnings and outgo of the Company during the FY 2015-16 is given below: Foreign Exchange Earnings and Outgo | | Particulars | Amount (In Rs.) | | A-Foreign Exchange Earnings | | Nil | | | Total | Nil | | B- Foreign Exchange Outgo | | | | 1. | Expense | 8,472,729 | | 2. | Dividend on Equity Shares | 119,300,839 | | 3. | Dividend on Preference Shares (CCPS) | 28,812,189 | | | Total | 156,585,757 |
20. PARTICULARS OF EMPLOYEES Your Company being an unlisted entity, the information disclosure required pursuant to Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company drawing remuneration in excess of the limits set out in the said rules is not applicable on the Company. 21. BUY BACK OF SHARES During the year under review, your Company has not announced any scheme for buy back of shares from its shareholders. 22. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134 of the Companies Act, 2013, the Directors state that: i) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departure, if any; ii) Appropriate accounting policies have been selected and applied consistently and have 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, 2016 and of the profit of the Company for the year ended March 31, 2016; iii) Proper and sufficient care has been taken 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 annual accounts have been prepared on a going concern basis; v) Proper Internal Financial Controls were followed by the Company and such internal financial controls are adequate and were operating effectively; vi) Proper systems are devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 23. RELATED PARTY TRANSACTIONS As informed during the last year report, the Central Electricity Regulatory Commission (‘CERC’) vide its order dated 13.05.2014 in the suo-motu Petition No. SM/341/2013 had directed your Company to ensure that M/s. Financial Technologies (India) Limited (‘FTIL’) shall divest its entire shareholding from IEX and that pending divestment of shares, their voting rights shall stand extinguished and any corporate benefits in lieu of such shareholding shall be kept in abeyance or withheld by the exchange. Accordingly, by virtue of aforesaid CERC order, the FTIL did not have any voting rights in the Company and the all their corporate benefits in lieu of their shareholding in the Company were put on hold. During the period the FTIL also had no nominee/ representative on the Board of the Company. In view of above, and pursuant to Section 2(76) of the Companies Act, 2013, with effect from May 19, 2014, the FTIL was not considered as a related party during the year. The FTIL divested its 100% stake in the Company during the year, in compliance with the CERC order, however, considering that the FTIL was holding more than 20% stake in the Company’s equity share capital (without having any voting rights) till 14 October 2015 and that your company has a material transactions with them in terms of software development and maintenance expenses, as matter of abundant caution, the transactions with the FTIL during the year is disclosed as related party transactions as per Accounting Standard - 18 “Related Party Disclosures” only. Considering the above, there was no related party transaction entered by the Company during the year in terms of Section 188 of the Companies Act, 2013. 24. MATERIAL AND SIGNIFICANT ORDERS PASSED BY THE REGULATORS The Central Electricity Regulatory Commission (‘CERC’) vide its order dated 13.05.2014 in the suo-motu Petition No. SM/341/2013 As informed during the last year report, the Central Electricity Regulatory Commission (‘CERC’) vide its order dated 13.05.2014 in the suo-motu Petition No. SM/341/2013 had directed your Company to ensure that M/s. Financial Technologies (India) Limited (‘FTIL’) shall divest its entire shareholding from IEX and that pending divestment of shares, their voting rights shall stand extinguished and any corporate benefits in lieu of such shareholding shall be kept in abeyance or withheld by the exchange. The Company had taken various actions to comply with the CERC order, and subsequently the FTIL divested its 100% stake in the Company vide sale of its shares in various tranches by November 20, 2015 in compliance with the CERC’s directives. 25. EXTRACT OF THE ANNUAL RETURN Pursuant to Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of Annual Return is appended as Annexure-D to this Report. 26. PARTICULARS OF LOANS, GUARANTEE OR INVESTMENT During the period under review, there were no loans, guarantee or investment by the Company as per the provision of Section 186 of the Companies Act, 2013. All the Investments of the Company are in Bank FDs and Debt based Mutual Fund schemes only, the details of which are provided in Note-13, 14 and 16 to the Notes to Accounts. 27. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has put in place an Anti-Sexual Harassment mechanism in line with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year under review, the Company has not received any complaint pertaining to sexual harassment. 28. DEMATERIALISATION OF SHARES The issued & fully paid-up equity shares of the Company are admitted with the National Securities Depository Limited (‘NSDL’). The International Securities Identification Number (ISIN) allotted to the equity shares of the Company under the Depository System is INE022Q01012. Members holding shares in physical form are requested to consider converting their holding to dematerialized form to eliminate all risk associated with physical shares and for ease in portfolio management. Members can contact M/s. Karvy Computershare Private Limited (Karvy), Registrar and Share Transfer Agent of the Company for assistance in this regard. The contact details for the benefit of shareholders is as follows: Karvy Computer shares Private Limited Unit – Indian Energy Exchange Limited Karvy Selenium Tower B, Plot No. 31 & 32 Gachibowli, Financial District, Nanakramguda, Serilingampally, Hyderabad, Telangana – 500032 Tel: 040-67161500; Fax: 040-2300 1153 Email: einward.ris@karvy.com The bifurcation of the category of shares in physical and electronic mode and distributing of shareholding as on March 31, 2016 is given below: Category | | No. of Shareholders | Total Shares | % To Equity | | | | | | NSDL | | 37 | 24,495,790 | 85.02 | | | | | | PHYSICAL | | 22 | 4,316,403 | 14.98 | | | | | | Total | | 59 | 28,812,193 | 100 | | | | | | | | | | | Sr. No | Category (Shares) | | No. of Holders | No. of Shares | | | | | | 1 | 1-5000 | | 20 | 43,110 | 2 | 5001-10000 | | 5 | 31,180 | 3 | 10001-20000 | | 7 | 1,06,150 | 4 | 20001-30000 | | 1 | 25,000 | 5 | 30001-40000 | | - | - | 6 | 40001-50000 | | 2 | 1,00,000 | 7 | 50001-100000 | | 1 | 70,000 | 8 | 100001 & Above | | 23 | 2,84,36,753 | TOTAL | | | 59 | 2,88,12,193 |
29. ACKNOWLEDGMENT Your Directors would like to place on record their sincere gratitude to the Ministry of Power, Central Electricity Regulatory Commission (CERC) Members, State Electricity Regulatory Commissions (SERCs) Members and Staff, Central Electricity Authority (CEA), National Load Dispatch Centre (NLDC), Regional Load Dispatch Centers (RLDCs), State Load Dispatch Centers (SLDCs), State Electricity Regulatory Commissions (SERCs), Power Grid Corporation Ltd. (PGCL), Financial Institutions, Shareholders, Bankers, Registrar and Transfer Agent (RTA), Members of the Exchange and, Business Associates and for their continued support. Your Directors also wish to place on record their appreciation for the contribution made by the employees of the organization at all levels. | For and on behalf of the Board of Directors | | Indian Energy Exchange Limited | | | | | | Sd/- | Place: New Delhi | D K Mehrotra | Dated: August 03, 2016 | (Chairman) | | DIN: 00142711 |
ANNEXURE-A Disclosure related to the Employee Stock Option Scheme (ESOS) 2010 of IEX: Sl. No. | Particulars | FY 2015-16 | a. | Total number of shares allotted to IEX ESOP Trust | 6,06,572 | b. | Options granted by IEX ESOP Trust | 5,85,800 | c. | Exercise price per option | 1. 324,700 options granted at an exercise price of Rs. 10/- per option; 2. 206,100 options granted at an exercise price of Rs. 53/- per option; and 3. 45,000 options granted at an exercise price of Rs. 150/- per option 4. 10,000 options granted at an exercise price of Rs. 535/- per option | d. | Options vested during the year | 11,250 | e. | Options exercised during the year | 11,250 | f. | Total number of Shares arising as a result of exercise of options during the year | 11,250 | g. | Options lapsed during the year | 340 | h. | Variations of terms of options, if any | No Variation in terms of options. | i. | Money realized by exercise of Options | Rs. 16,87,500 | j. | Total no. of Options in force | 43,750 | k. | Employee-wise details of options granted: | | (i) Key Managerial Personnel | NIL | (ii) Employees who received a grant in any one year of option amounting to 5% or more of options granted during that year | NIL | (iii) Identified Employees who were granted options, during any one year equal to or exceeding 1% of the issued capital of the Company at the time of grant | NIL | l. | Diluted EPS | Rs. 33.02 |
Note: The Company being an unlisted Company, the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (‘SEBI Regulation’) is not applicable. ANNEXURE- B Nomination and Remuneration Policy of Directors, Key Managerial Personnel and other employees of Indian Energy Exchange Limited PRINCIPLE AND RATIONALE As per the requirements of Section 178 of the Companies Act, 2013 and the Rules framed thereunder, the Board of Directors of the Company has constituted a Nomination and Remuneration Committee. The Committee’s role is to be supported by a policy for nomination of Directors and Senior Management Personnel including Key Managerial Personnel as also for remuneration of Directors, Key Managerial Personnel (KMP) and other Employees. In line with the Company philosophy towards nurturing its human resources, the Nomination and Remuneration Committee of the Board of Directors of the Company recommends to the Board of Directors for its adoption the Nomination and Remuneration Policy for the Directors, Key Managerial Personnel and other employees of the Company as set out below: 1. DEFINITIONS: 1.1. ‘Board’ shall mean Board of Directors of Indian Energy Exchange Limited. 1.2. ‘Independent Director’ shall mean a director referred to in Section 149 (6) of the Companies Act, 2013. 1.3. ‘Key Managerial Personnel’ or KMP means key managerial personnel as defined under the Companies Act, 2013 & includes: (i) Chief Executive Officer or the Managing Director or the Manager; (ii) Company Secretary; (iii) Whole-time Director; (iv) Chief Financial Officer; and (v) Such other officer as may be prescribed. 1.4. ‘Nomination and Remuneration Committee’ or the Committee under this policy shall mean a Committee of Board of Directors of the Company, constituted in accordance with the provisions of Section 178 of the Companies Act, 2013 and the Rules framed thereunder. 1.5. ‘Other employees’ means all employees other than the Directors and KMPs. 1.6. ‘Policy or This Policy’ means, “Nomination and Remuneration Policy.” 1.7. ‘Remuneration’ means any money or its equivalent given or passed to any person for services rendered by him and includes perquisites as defined under the Income-tax Act, 1961. 1.8. ‘Senior Management’ means personnel of the Company who are members of its core management team excluding Board of Directors. This would include all members of management one level below the executive directors, including the functional heads. Unless the context otherwise requires, words and expressions used in this policy and not defined herein but defined in the Companies Act, 2013 as may be amended from time to time shall have the meaning respectively assigned to them therein. 2. FUNCTIONS: · To guide the Board in relation to the appointment and removal of Directors, Key Managerial Personnel and Senior Management. · To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Director (Executive & Non-Executive/ Independent) and persons who may be appointed in Senior Management Personnel. · To evaluate the performance of the members of the Board and provide necessary report to the Board for further evaluation. · To attract, retain and motivate the Directors and evaluation of their performance. · To ensure that the relationship of remuneration with performance is clear and meets appropriate performance benchmarks. · To recommend to the Board a Policy relating to the Remuneration for the Directors, Key Managerial Personnel and other Employees. · To determine the remuneration based on the Company’s size and financial position and practices in the industry. 3. APPLICABILITY: This Policy shall apply to all Directors, KMPs, and other employees of the Company. 4. APPOINTMENT, REMOVAL AND RETIREMENT OF DIRECTOR, KMP AND SENIOR MANAGEMENT: 4.1. Appointment criteria and qualifications: · The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP or at Senior Management level and recommend to the Board his / her appointment. · A potential candidate being considered for appointment to a position should possess adequate qualification, expertise and experience for the position. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person are sufficient / satisfactory for the concerned position. · The Committee shall determine the suitability of appointment of a person to the Board of Directors of the Company by ascertaining whether he satisfies the criteria as prescribed by the Central Electricity Regulatory Commission (CERC) for appointment and disqualification as Director in the Power Exchange. · The Committee may recommend appropriate induction & training programme for any or all the appointees. · The Committee shall make recommendations to the Board concerning any matters relating to the continuation in office of any director at any time including the suspension or termination of service of a director subject to the provisions of law and the respective service contract. 4.2. Term / Tenure: 4.2.1. Managing Director/Whole-time Director/Manager (Managerial Person): · The Company shall appoint or re-appoint any person as its Managerial Person as per section 196, 197 or any other applicable provisions of the Companies Act 2013 read with Schedule- V. 4.2.2. Independent Director: · An Independent Director shall hold office in Company for such term as prescribed under the Companies Act, 2013 and the Rules framed thereunder and other applicable statutory provisions. · The appointment including the terms and conditions of appointment of Independent Director shall be recommended by the Committee and approved by the Board of Directors of the Company subject to the approval of the Shareholders in the General Meeting. · No Independent Director shall hold office for more than two consecutive terms, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director of the Company. Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the Company in any other capacity, either directly or indirectly. 4.2.3. The Terms/ Tenure of the KMP and other employees shall be as per the Company’s prevailing policy. 4.3. Evaluation: The Committee shall carry out evaluation of performance of Directors yearly or at such intervals as may be considered necessary. 4.4. Removal: Due to reasons for any disqualification mentioned in the Companies Act, 2013, rules made thereunder or under any other applicable Act, rules and regulations, the Committee may recommend, to the Board with reasons recorded in writing, removal of a Director, KMP or Senior Management Personnel subject to the provisions and compliance of the said Act, rules and regulations. 4.5. Retirement: The Director, KMP and Senior Management shall retire as per the applicable provisions of the Companies Act, 2013 along with the Rules framed thereunder and the prevailing policy of the Company. The Board will have the discretion to retain the Director, KMP or the Senior Management Personnel, in the same position / remuneration or otherwise even after attaining the retirement age, for the benefit of the Company. 5. PROVISIONS RELATING TO REMUNERATION OF MANAGERIAL PERSON, KMP AND OTHER EMPLOYEES: 5.1.1. General Criteria: · The Committee will recommend to the Board the policy on remuneration payable to Directors, KMP and Other employees for approval. While recommending the policy the Committee shall ensure that, the level and composition of remuneration/Compensation/Commission etc. to be paid is reasonable and sufficient to attract, retain and motivate them in the company. · The Policy shall also ensure that the relationship of remuneration to the performance should be clear and should encourage meeting of appropriate performance benchmarks. The remuneration should also involve a balance between fixed and incentive / performance related pay reflecting achievement of short and long-term performance objectives appropriate to the working of the company and meeting its goals. · Revision to the existing remuneration / compensation structure may be recommended by the Committee to the Board which should be within the limits approved by the Shareholders in the case of Managerial Persons. · The remuneration shall be subject to the prior/post approval of the shareholders of the Company and Central Government, wherever required. · Where any insurance is taken by the Company on behalf of its Managerial Person, KMPs, and/or any other employees for indemnifying them against any liability, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel, unless such person(s) is/are proved to be guilty. 5.1.2. Remuneration to Managerial Person and KMPs: · The Remuneration to be paid to Managerial Persons and/ or KMPs shall be governed as per the provisions of the Companies Act, 2013 and rules made thereunder or any other enactment for the time being in force as also by Company policy. 5.1.3. Remuneration to Non-Executive Directors/ Independent Directors: · The Non- Executive / Independent Director may receive remuneration by way of fees for attending meetings of the Board or Committee thereof and General Meeting of the Company. · Provided that the amount of such fees shall be such as determined by the Board of Directors of the Company from time to time and shall be within the maximum permissible limit as defined under the Companies Act, 2013 and the Rules framed thereunder. · The remuneration / commission payable, if any, shall be in accordance with the statutory provisions of the Companies Act, 2013, and the rules made thereunder for the time being in force. · An Independent Director shall not be entitled to any stock option of the Company. 5.1.4. Remuneration to other Employees: · The Remuneration to be paid to other employees shall be based upon the role and position of the individual employee, including professional experience, responsibility, job complexity and market conditions, qualification and seniority. · The structure of remuneration for other employees has been designed in the prevailing policy of the Company and implementation of the same is to be ensured by Managing Director & CEO of the Company or any other personnel that the Managing Director & CEO may deem fit to delegate. · The annual increments to the remuneration paid to the other employees shall based on the appraisal carried out by the respective HODs of various departments. · The various remuneration components, basic salary, allowances, perquisites etc. may be combined to ensure an appropriate and balanced remuneration package. 5.1.5. Stock Options: In addition to the normal/ regular remuneration package, Employee Stock Option Schemes are also in place for the Managerial Person, KMPs and other employees of the Company. To attract & retain talent, reward for performance and for creating long term shareholder value, the Committee may from time to time determine the stock options and other share based payments to be made to Managerial Person, KMPs, and other employees of the Company. 6. DISCOLURE OF THIS POLICY: This Nomination & Remuneration policy shall be disclosed in the Board’s report as required under the Companies Act, 2013. 7. DEVIATIONS FROM THIS POLICY: Deviations on elements of this policy in extraordinary circumstances, when deemed necessary in the interests of the Company, will be made if there are specific reasons to do so in an individual case. 8. REVIEW AND AMENDMENT: The Nomination and Remuneration Committee or the Board may review the Policy as and when it deems necessary. This Policy may be amended or substituted by the Nomination and Remuneration Committee or by the Board as and when required and also where there is any statutory changes necessitating the change in the policy. ANNEXURE – C Annual Report on CSR Activities (Pursuant to Section 135 of the Companies Act, 2013 & Rules made thereunder) 1. | A brief outline of the company’s CSR policy, including overview of the projects or programmes proposed to be undertaken and reference to the web-link to the CSR Policy and projects or programmes. | IEX CSR Policy aims to address issues in the ambit of environmental sustainability, economic empowerment and social development by adopting an integrated, holistic and need-based approach. The main focus areas of the Company’s CSR Policy are: • Promote decentralized renewable energy by creating opportunities for access and awareness. • Support socio-economic development of underprivileged communities through improved access to livelihoods, sanitation, water, healthcare and education. • Endeavour to integrate the cause of women empowerment while designing projects. • Contribute to relief and rehabilitation measures in disaster-affected parts of the country. The complete CSR policy of the company is available on the website of the company http://www.iexindia.com/csr.aspx?id=9&mid=0 | 2. | Composition of the CSR Committee | In accordance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, members of the CSR Committee are: 1. Prof. K T Chacko, Non-executive Independent Director (as the Chairman), 2. Ms. Renuka Ramnath, Non Executive Director (w.e.f. May 04, 2016), 3. Mr. Satyanarayan Goel, Managing Director & CEO of the Company, (Mr. Vishal Vijay Gupta, Non-executive Director (upto March 07, 2016). | 3. | Average Profit of the company for last 3 financial years | Rs. 1,195,436,642/- | 4. | Prescribed CSR expenditure (two percent of the amount as in item 3 above) | Rs. 23,908,733/- | 5. | Details of CSR spent during the financial year
(a) Total amount to be spent for the financial year;
(b) Amount un-spent, if any;
(c) Manner in which the amount spent during financial year. |
Rs. 23,908,733/-
Rs. 22,208,336/-
Attached as Annexure-a
| 6. | In case the company has failed to spend the 2% of the average net profit of the last 3 financial years or any part thereof, reasons for not spending the amount in its Board Report: | The Company is committed to ensure compliance with the CSR spending. However, to ensure that the amount spent is well utilized and the aimed benefit reaches to the ultimate targeted deprived people of the society, the Company was in process of identifying and short listing established and credible NGOs (endorsed under government of India’s NGO partnership program) for undertaking the various CSR activities/ programs of the Company and subsequently, has reached out to the selected NGOs seeking project proposals in line with the focus areas identified under the Company’s CSR Policy.
Further, the Company was also in process of identifying and appointing agency, to assists the Company in selecting, monitoring and evaluating its CSR projects. The Company had also identified many CSR projects and working on them extensively to ensure compliance with CSR spending going forward. In fiscal 2016, the Company donated a school bus to Isha Vidhya School in Erode, Tamil Nadu. The school provides education to children from rural communities. These children greatly benefited since otherwise they had to walk long distances to reach the School. | 7. | Responsibility statement | The CSR Committee re-affirms that the implementation and monitoring of the CSR projects is being done in compliance with objectives outlined in the CSR policy of the Company. |
| For and on behalf of the Board of Directors | | | Indian Energy Exchange Limited | | | | | | | | Place- New Delhi | Sd/- | Sd/- | Date: August 03, 2016 | Satyanarayan Goel | K T Chacko | | (Managing Director & CEO) | (Chairman, CSR Committee) | | DIN: 02294069 | DIN: 02446168 |
Annexure–a Manner in which the CSR amount is spent during financial year ended March 31, 2016 Sr. No. | CSR Project/ activity identified | Sector in which the Project is covered | Projects/Programmes 1.Local area/others- 2.Specify the state /district (Name of the District/s, State/s where Project/ programme was undertaken | Amount outlay (budget) project/ programme wise | Amount spent on the project/ programme Sub-heads: 1.Direct expenditure on project/ programme, 2.Overheads: | Cumulative spend upto to the reporting period | Amount spent: Direct/ through implementing agency* | 1. | Educating Children from under-privileged families | Promoting education to under privilege rural children | 1.Others 2. Tamil Nadu (Isha Education’s Rural School in Erode). | 16,65,000/- | i) 16,65,000/- ii) 35,397/- | 17,00,397/- | Direct |
ANNEXURE - D EXTRACT OF ANNUAL RETURN as on the financial year ended March 31, 2016 [Pursuant to Section 92(3) of the Companies Act, 2013, and Rule 12(1) of the Companies (Management and Administration) Rules, 2014] FORM NO. MGT - 9 I. REGISTRATION AND OTHER DETAILS: Corporate Identity Number (CIN) | U74999DL2007PLC277039 | Registration Date | 26 March 2007 | Name of the Company | Indian Energy Exchange Limited | Category / Sub-Category of the Company | Company Limited by Shares/Indian Non-Government Company | Address of the Registered Office and contact details | Unit No. 3-6, Fourth Floor, Plot No. 7, TDI Centre, District Centre, Jasola, New Delhi – 110025, India Tel. No. +91-11-4300 4000; Fax: +91-11-4300 4015 Email id – iexsecretarial@iexindia.com | Whether listed company | No | Name, Address and Contact details of Registrar and Transfer Agent, if any | M/s Karvy Computershare Private Limited Karvy Selenium Tower B, Plot No. 31 & 32 Gachibowli, Financial District, Nanakramguda, Serilingampally, Hyderabad, Telangana – 500032 Tel: 040-67161500 Fax: 040-2300 1153 Email: einward.ris@karvy.com |
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY: All business activities contributing 10 % or more of the total turnover of the company shall be stated: Sl. No. | Name and Description of main products/ services | NIC Code of the Product/service | % to total turnover of the Company | 1. | Power Exchange | 66110 | 100% |
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES: Sl. No. | Name and Address of the Company | CIN/GLN | Holding/Subsidiary/Associate | % of Shares held | Applicable Section | | | | | | | | | | Not Applicable | | |
IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) i) Category-wise Share Holding: (Attached as Annexure – I) ii) Shareholding of Promoters Sl. No. | Shareholder’s Name | Shareholding at the beginning of the year | | | Shareholding at the end of the year | | | % change in shareholding during the year | No. of Shares | % of total shares of the Company | % of Shares Pledged /encumbered to total shares | No. of Shares | % of total shares of the Company | % of Shares Pledged /encumbered to total shares | | | | | | | | | | | | | | Not Applicable | | | | |
iii) Change in Promoters’ Shareholding (please specify, if there is no change) Sl. No. | Particulars | Shareholding at the beginning of the year | | Cumulative Shareholding during the year | | No. of Shares | % of total shares of the Company | No. of Shares | % of total shares of the Company | 1 | At the beginning of the year | | | | | 2 | Date wise Increase/Decrease in Promoters Shareholding during the year: | | Not Applicable | | | 3 | At the end of the year | | | | |
iv) Shareholding Pattern of Top Ten Shareholders (other than Directors, promoters and Holders of GDRs and ADRs): 01 | DCB Power Ventures Limited | Shareholding at the beginning of the year | | Cumulative Shareholding during the year | | No. of Shares | % of total shares of the Company | No. of Shares | % of total shares of the Company | 1 | At the beginning of the year | - | - | - | - | 2 | Date wise Increase/Decrease in Shareholding during the year: #CDate:16/10/2015:Purchase # CDate:04/03/2016:Purchase | 3,032,863 77,000 | 10.53 0.26 | 3,032,863 3,109,863 | 10.53 10.79 | 3 | At the end of the year | - | - | 3,109,863 | 10.79 |
#Based upon the beneficiary position list as on 31.03.2016 received from the Depository. 02 | Multiples Private Equity Fund | Shareholding at the beginning of the year | | Cumulative Shareholding during the year | | No. of Shares | % of total shares of the Company | No. of Shares | % of total shares of the Company | 1 | At the beginning of the year | 24,29,878# | 8.90 | 24,29,878 | 8.90 | 2 | Date wise Increase/Decrease in Shareholding during the year: | - | - | - | - | 3 | At the end of the year | - | - | 24,29,878 | 8.43* |
# CCPS were converted into Equity Shares on 03.09.2015, 02.01.2016 and 16.02.2016 *Change due to issuance of Equity shares on Conversion of Compulsory Convertible Preference Shares (‘CCPS’) of face value of Rs. 10 each into equity shares of Rs. 10/- each. 03 | Multiples Private Equity Fund I Limited | Shareholding at the beginning of the year | | Cumulative Shareholding during the year | | No. of Shares | % of total shares of the Company | No. of Shares | % of total shares of the Company | 1 | At the beginning of the year | 18,19,717# | 6.67 | 18,19,717 | 6.67 | 2 | Date wise Increase/Decrease in Shareholding during the year: | - | - | - | - | 3 | At the end of the year | - | - | 18,19,717 | 6.32* |
# CCPS were converted into Equity Shares on 03.09.2015, 02.01.2016 and 16.02.2016 *Change due to issuance of Equity shares on Conversion of Compulsory Convertible Preference Shares (‘CCPS’) of face value of Rs. 10 each into equity shares of Rs. 10/- each. 04 | Agri Power and Engineering Solutions Private Limited | Shareholding at the beginning of the year | | Cumulative Shareholding during the year | | No. of Shares | % of total shares of the Company | No. of Shares | % of total shares of the Company | 1 | At the beginning of the year | - | - | - | - | 2 | Date wise Increase/Decrease in Shareholding during the year: #CDate 23/10/2015:Purchase | 1,655,557 | 5.75 | 1,655,557 | 5.75 | 3 | At the end of the year | - | - | 1,655,557 | 5.75 |
#Based upon the beneficiary position list as on 31.03.2016 received from the Depository. 05 | IL and FS Trust Company Limited* | Shareholding at the beginning of the year | | Cumulative Shareholding during the year | | No. of Shares | % of total shares of the Company | No. of Shares | % of total shares of the Company | 1 | At the beginning of the year | - | - | - | - | 2 | Date wise Increase/Decrease in Shareholding during the year: #CDate 04/09/2015: Purchase #CDate 11/09/2015: Purchase #CDate 08/01/2016: Purchase #CDate 19/02/2016: Purchase | 893,896 30,000 114,929 507,606 | 3.10 0.10 0.40 1.76 | 893,896 923,896 1,038,825 1,546,431 | 3.10 3.20 3.60 5.36 | 3 | At the end of the year | - | - | 1,546,431 | 5.36 |
*Trustee of TVS Shriram Growth Fund IB #Based upon the beneficiary position list as on 31.03.2016 received from the Depository. 06 | Aditya Birla Private Equity Trust | Shareholding at the beginning of the year | | Cumulative Shareholding during the year | | No. of Shares | % of total shares of the Company | No. of Shares | % of total shares of the Company | 1 | At the beginning of the year | 1,250,000## | 4.58 | 1,250,000 | 4.58 | 2 | Date wise Increase/Decrease in Shareholding during the year: #CDate 09/10/2015: Purchase | 266,853 | 0.68 | 1,516,853 | 5.26 | 3 | At the end of the year | - | - | 1,516,853 | 5.26* |
#Based upon the beneficiary position list as on 31.03.2016 received from the Depository. ## CCPS were converted into Equity Shares on 03.09.2015, 02.01.2016 and 16.02.2016 *Change due to Issuance of Equity shares on Conversion of Compulsory Convertible Preference Shares (‘CCPS’) of face value of Rs. 10 each into equity shares of Rs. 10/- each. 07 | PTC India Financial Services Limited | Shareholding at the beginning of the year | | Cumulative Shareholding during the year | | No. of Shares | % of total shares of the Company | No. of Shares | % of total shares of the Company | 1 | At the beginning of the year | 15,16,431# | 5.56 | 15,16,431 | 5.56 | 2 | Date wise Increase/Decrease in Shareholding during the year: | - | - | - | - | 3 | At the end of the year | - | - | 15,16,431 | 5.26* |
# CCPS were converted into Equity Shares on 03.09.2015, 02.01.2016 and 16.02.2016 *Change due to Issuance of Equity shares on Conversion of Compulsory Convertible Preference Shares (‘CCPS’) of face value of Rs. 10 each into equity shares of Rs. 10/- each. 08 | Pathfinder Mauritius Limited | Shareholding at the beginning of the year | | Cumulative Shareholding during the year | | No. of Shares | % of total shares of the Company | No. of Shares | % of total shares of the Company | 1 | At the beginning of the year | - | - | - | - | 2 | Date wise Increase/Decrease in Shareholding during the year: #CDate 05/06/2015: Purchase #CDate 04/03/2016: Transfer | 1,516,431 (77,000) | 5.26 (0.26) | 1,516,431 1,439,431 | 5.26 5.00 | 3 | At the end of the year | - | - | 1,439,431 | 5.00 |
#Based upon the beneficiary position list as on 31.03.2016 received from the Depository. 09 | A F Holdings | Shareholding at the beginning of the year | | Cumulative Shareholding during the year | | No. of Shares | % of total shares of the Company | No. of Shares | % of total shares of the Company | 1 | At the beginning of the year | - | - | - | - | 2 | Date wise Increase/Decrease in Shareholding during the year: #CDate 14/08/2015: Purchase #CDate 28/08/2015: Purchase | 1,250,000 152,856 | 4.34 0.53 | 1,250,000 1,402,856 | 4.34 4.87 | 3 | At the end of the year | - | - | 1,402,856 | 4.87 |
#Based upon the beneficiary position list as on 31.03.2016 received from the Depository. 10 | Golden Oak (Mauritius) Limited | Shareholding at the beginning of the year | | Cumulative Shareholding during the year | | No. of Shares | % of total shares of the Company | No. of Shares | % of total shares of the Company | 1 | At the beginning of the year | 13,64,787# | 5.00 | 13,64,787 | 5.00 | 2 | Date wise Increase/Decrease in Shareholding during the year: | - | - | - | - | 3 | At the end of the year | - | - | 13,64,787 | 4.74* |
# CCPS were converted into Equity Shares on 03.09.2015, 02.01.2016 and 16.02.2016 *Change due to Issuance of Equity shares on Conversion of Compulsory Convertible Preference Shares (‘CCPS’) of face value of Rs. 10 each into equity shares of Rs. 10/- each. v) Shareholding of Directors and Key Managerial Personnel: Sl. No. | Mr. Satyanarayan Goel, Managing Director | Shareholding at the beginning of the year | | Cumulative Shareholding during the year | | No. of Shares | % of total shares of the Company | No. of Shares | % of total shares of the Company | 1 | At the beginning of the year | - | - | - | - | 2 | Date wise Increase/Decrease in shareholding during the year: #Allotment ESOP Shares as per Committee Approval Dated 02-03-2016 | 11,250 | 0.04 | 11,250 | 0.04 | 3 | At the end of the year | - | - | 11,250 | 0.04 |
#Based upon the Memorandum of Share Transfers list as on 15.03.2016 received from the Depository. Sl. No. | Mr. Vineet Harlalka, CFO & Company Secretary | Shareholding at the beginning of the year | | Cumulative Shareholding during the year | | No. of Shares | % of total shares of the Company | No. of Shares | % of total shares of the Company | 1 | At the beginning of the year | 16,600# | 0.06 | 16,600 | 0.06 | 2 | Date wise Increase/Decrease in shareholding during the year: ##Allotment ESOP Shares as per Committee Approval Dated 23-04-2015. | 3,400 | 0.01 | 20,000 | 0.07 | 3 | At the end of the year | - | - | 20,000 | 0.07 |
# CCPS were converted into Equity Shares on 03.09.2015, 02.01.2016 and 16.02.2016 ##Based upon the Memorandum of Share Transfers list as on 29.05.2015 received from the Depository. V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/ accrued but not due for payment (in Rs.) Particulars | Secured Loans
excluding deposits* | Unsecured Loans | Deposits | Total Indebtedness | Indebtedness at the beginning of the financial year | | | | | i) Principal Amount | Nil | Nil | Nil | Nil | ii) Interest due but not paid | Nil | Nil | Nil | Nil | iii) Interest accrued but not due | Nil | Nil | Nil | Nil | Total (i+ii+iii) | Nil | Nil | Nil | Nil | Change in Indebtedness during the financial year | | | | | Addition | Nil | Nil | Nil | Nil | Reduction | Nil | Nil | Nil | Nil | Net Change | Nil | Nil | Nil | Nil | Indebtedness at the end of the financial year | | | | | i) Principal Amount | Nil | Nil | Nil | Nil | ii) Interest due but not paid | Nil | Nil | Nil | Nil | iii) Interest accrued but not due | Nil | Nil | Nil | Nil | Total (i+ii+iii) | Nil | Nil | Nil | Nil |
* Bank Overdraft VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole-time Directors and/or Manager: (in Rs.) Sl. No. | Particulars of Remuneration | Mr. Satyanarayan Goel Managing Director & CEO | Total Amount | 1 | Gross Salary | | | (a) Salary as per provisions contained in Section 17(1) of the Income Tax Act, 1961 | 15,729,348/- | 15,729,348/- | (b) Value of perquisites under Section 17(2) Income Tax Act, 1961 | Nil | Nil | (c) Profits in lieu of salary under Section 17(3) Income Tax Act, 1961 | Nil | Nil | 2 | Stock Option | Nil | Nil | 3 | Sweat Equity | Nil | Nil | 4 | Commission | | | - as % of profit | Nil | Nil | - others, specify | Nil | Nil | 5 | Total (A) | 15,729,348/- | 15,729,348/- | 6 | Ceiling as per the Act | 74,146,199/- | 74,146,199/- |
B. Remuneration to other directors: 1. Independent Directors: (in Rs.) Sl. No. | Particulars of Remuneration | Name of Director’s | | | Total Amount | Mr. D. K. Mehrotra | Mr. Vallabh Roopchand Bhanshali | Prof. K T Chacko | (a) | Fee for attending board /committee meetings# | 1,290,000/- | 570,000/- | 1,290,000/- | 3,150,000/- | (b) | Commission | Nil | Nil | Nil | Nil | (c) | Others, please specify | Nil | Nil | Nil | Nil | | Total (1) | 1,290,000/- | 570,000/- | 1,290,000/- | 3,150,000/- |
2. Other Non-Executive Directors: (in Rs.) Sl. No. | Particulars of Remuneration | Mr. Ajeet Kumar Agarwal* | Total Amount | (a) | Fee for attending board /committee meetings# | 270,000/- | 270,000/- | (b) | Commission | Nil | Nil | (c) | Others, please specify | Nil | Nil | | Total (2) | 270,000/- | 270,000/- | | Total (B)=(1+2) | 3,420,000/- | 3,420,000/- | | Total Managerial Remuneration | N.A. | N.A | | Overall Ceiling as per the Act | N.A | N.A |
# excluding service tax. *Sitting fees paid to REC Limited as Mr. Ajeet Kumar Agarwal being a Nominee Director of REC Limited. C. Remuneration to Key Managerial Personnel other than MD/ Manager/ WTD (in Rs.) Sl. No | Particulars of Remuneration | Mr. Vineet Harlalka CFO & Company Secretary | Total Amount | 1 | Gross Salary | | | (a) Salary as per provisions contained in Section 17(1) of the Income Tax Act, 1961 | 7,610,755/- | 7,610,755/- | (b) Value of perquisites under Section 17(2) Income Tax Act, 1961 | Nil | Nil | (c) Profits in lieu of salary under Section 17(3) Income Tax Act, 1961 | Nil | Nil | 2 | Stock Option | Nil | Nil | 3 | Sweat Equity | Nil | Nil | 4 | Commission | | | as % of profit | Nil | Nil | others, specify | Nil | Nil | 5 | Total (C) | 7,610,755/- | 7,610,755/- | 6 | Ceiling as per the Act | Not Applicable | Not Applicable |
VII. PENALTIES/ PUNISHMENT/ COMPOUNDING OF OFFENCES : Type | Section of the Companies Act | Brief Description | Details of Penalty / Punishment /Compounding fees imposed | Authority [RD / NCLT / COURT] | Appeal made, if any | A. Company | | | | | | Penalty | No Penalties, Punishments or Compounding of Offences | | | | | Punishment | Compounding | B. Directors | | | | | | Penalty | No Penalties, Punishments or Compounding of Offences | | | | | Punishment | Compounding | C. Other Officers in default | | | | | | Penalty | No Penalties, Punishments or Compounding of Offences | | | | | Punishment | Compounding |
Annexure – I (IV) SHAREHOLDING PATTERN (EQUITY CAPITAL BREAKUP AS PERCENTAGE OF TOTAL EQUITY) | Category of Shareholders | No. of Shares held at the beginning of the year | | | | | No. of Shares held at the end of the year | | | | % Change during | | | | | | | | | | | | the year | | | Demat | Physical | | Total | % of Total | Demat | Physical | Total | % of Total | | | | | | | | Shares | | | | Shares | | | A. Promoters | | | | | | | | | | | | (1) Indian | | | | | | | | | | | | a) Individual/ HUF | - | - | | - | - | - | - | - | | | | b) Central Govt | - | - | | - | - | - | - | - | | | | c) State Govt (s) | - | - | | - | - | - | - | - | | | | d) Bodies Corporate | - | - | | - | - | - | - | - | | | | e) Banks/FI | - | - | | - | - | - | - | - | | | | f) Any other | - | - | | - | - | - | - | - | | | | Sub-total (A)(1) | - | - | | - | - | - | - | - | | | | (2) Foreign | | | | | | | | | | | | a) NRI - Individuals | - | - | | - | - | - | - | - | | | | b) Other - Individuals | - | - | | - | - | - | - | - | | | | c) Bodies Corporate | - | - | | - | - | - | - | - | | | | e) Banks/FI | - | - | | - | - | - | - | - | | | | f) Any other | - | - | | - | - | - | - | - | | | | Sub-total (A)(2) | - | - | | - | - | - | - | - | | | | Total Shareholding of Promoters | - | - | | - | - | - | - | - | | | | (A) = (A)(1)+(A)(2) | | | | | | | | | | | | B. Public Shareholding | | | | | | | | | | | | (1) Institutions | | | | | | | | | | | | a) Mutual Funds / UTI | - | - | | - | - | - | - | - | | | | b) Banks / FI | - | - | | - | - | - | - | - | | | | c) Central Govt. | - | 1,250,000 | | 1,250,000 | 4.58 | - | 1,250,000 | 1,250,000 | 4.34 | (0.24) | | d) State Govt.(s) | - | - | | - | - | - | - | - | | | | e) Venture Capital Funds | 3,679,878 | - | | 3,679,878 | 13.48 | 3,946,731 | - | 3,946,731 | 13.70 | 0.22 | | f) Insurance Companies | - | - | | - | - | - | - | - | | | | g) FIIs | 1,364,787 | - | | 1,364,787 | 5.00 | 1,364,787 | - | 1,364,787 | 4.74 | (0.26) | | h) Foreign Venture Capital Funds | 1,516,431 | | | 1,516,431 | 5.56 | - | - | - | | (5.56) | | i) Others (specify) | | | | | - | - | - | - | | | | Sub-Total (B)(1): | 6,561,096 | 1,250,000 | | 7,811,096 | 28.62 | 5,311,518 | 1,250,000 | 6,561,518 | 22.77 | (5.84) | | (2) Non-Institutions | | | | | | | | | | | | a) Bodies Corporate | | | | | | | | | | | | i) Indian | 11,525,515 | 4,016,431 | | 15,541,946 | 56.94 | 7,568,706 | 2,766,431 | 10,335,137 | 35.87 | (21.07) | | ii) Overseas | 1,819,717 | 1,516,431 | | 3,336,148 | 12.22 | 8,833,344 | - | 8,833,344 | 30.66 | 18.44 | | b) Individuals | | | | | | | | | | | | i) Individual Shareholders holding Nominal share capital | 3,960 | 54,970 | | 58,930 | 0.22 | 50,000 | 24,290 | 74,290 | 0.26 | 0.04 | | upto Rs. 1 lakh | | | | | | | | | | | | ii) Individual Shareholders holding nominal share capital | 128,300 | 177,900 | | 306,200 | 1.12 | 226,600 | 63,300 | 289,900 | 1.01 | (0.12) | | in excess of Rs. 1 lakh | | | | | | | | | | | | | | | | | | | | | | | | c) Others (specify) | | | | | - | | | | | | | (i) Trust | - | 241,442 | | 241,442 | 0.88 | 2,505,622 | 201,132 | 2,706,754 | 9.39 | 8.51 | | (ii) Directors | - | - | | - | - | - | 11,250 | 11,250 | 0.04 | (0.04) | | Sub-Total (B)(2) | 13,477,492 | 6,007,174 | | 19,484,666 | 71.38 | 19,184,272 | 3,066,403 | 22,250,675 | 77.23 | (5.84) | | Total Public Shareholding (B)=(B)(1)+(B)(2) | 20,038,588 | 7,257,174 | | 27,295,762 | 100.00 | 24,495,790 | 4,316,403 | 28,812,193 | 100.00 | | | C. Shares held by Custodian for GDRs & ADRs | - | - | | - | - | - | - | - | | | | | | | | | | | | | | | | Grand Total (A+B+C) | 20,038,588 | 7,257,174 | | 27,295,762 | 100.00 | 24,495,790 | 4,316,403 | 28,812,193 | 100.00 | |
Description of state of companies affairFINANCIAL RESULTS AND OPERATIONS The Company’s financial and operational performance for the year ended March 31, 2016 is summarized below: (Amount in Rupees) Particulars2015-162014-15 Operating Income1,750,279,0351,447,786,121 Other Income251,118,269317,520,244 Total Income2,001,397,3041,765,306,365 Less: Total Expenditure535,172,664438,699,025 Profit before tax1,466,224,6401,326,607,340 Less: Provision for Tax464,916,943422,406,261 Profit after tax1,001,307,697904,201,079 Add: Brought forward P&L balance from prev. year1,041,196,9751,553,053,704 Profit available for Appropriation2,042,504,6722,457,254,783 Less: Proposed Dividend on Preference Shares (CCPS)30,328,62036,394,344 Less: Interim Dividend on Preference Shares (CCPS)14,972,76275,821,550 Less: Dividend Distribution Tax on Preference Shares9,222,29520,294,905 Profit available for Appropriation1,987,980,9952,324,743,984 Less: Proposed Dividend on Equity Shares576,243,860327,549,144 Less: Interim Dividend on Equity Shares197,327,606682,394,050 Less: Dividend Distribution Tax on Equity Shares157,480,949182,654,169 Less: Transfer to General ReserveNil90,420,108 Less: Adjustment due to revision in depreciation ratesNil529,538 Balance carried forward to Balance Sheet1,056,928,5801,041,196,975 Your Company has sustained and maintained its leadership position in the Power Exchange industry in India during the year. During the year your Company’s performance has shown some improvement, the Day Ahead Market (DAM) volumes grown by 21%, the Term Ahead Market (TAM) volumes grown by 38% and REC volume volumes grown by more than 100%. The total operating revenue of the Company was at Rs. 175.03 crores as against a total operating revenue of Rs. 144.78 crores during the last fiscal, reflecting an increase of 21%, whereas the total revenue for the fiscal was at Rs. 200.14 crores as against the Rs. 176.53 crores during the last fiscal, reflecting an increase of only 13%, because of lower treasury income due to fall in interest rates and higher dividend payout during the year. Further during the year the operating cost (other than REC incentive and CSR expenses) increased from Rs. 39.24 crores to Rs. 44.35 crores mainly due to higher employee cost, technology and legal & professional expenses. In addition, since there is an oversupply of RECs in the market, to promote the RECs market and create its demand among the buyers, the Company had given incentive of Rs. 5.34 crores during the year, in previous year the incentive paid was Rs. 1.44 crores. The Profit after Tax (PAT) of your Company for the year ended March 31, 2016 stood at Rs. 100.13 crores as compared to Rs. 90.42 crores during the previous year, reflecting an increase of 11% on Year to Year basis. Major highlights of your Company’s achievements during FY 2015-16 Overview: With an aim to provide electricity on 24x7 basis, the Government has been laying significant emphasis on capacity addition with greater focus on renewable energy. As per Central Electricity Authority (CEA), the total installed power capacity in India was 303 GW as on 31 March’16. In a span of last five years, the installed capacity grew almost 75%, from 174 GW in fiscal 2011 to 303 GW in fiscal 2016. However, the growth in power generation was not commensurate with the growth in generation capacity. The generation grew from 809 BUs in fiscal 2011 to 1,164 BUs in fiscal 2016, indicating a growth of 44 % in span of five years. With fast paced addition in capacity, the power supply position was quite comfortable with deficit of around 2%. From short term power market perspective, as per the CERC Market Monitoring Reports, in fiscal 2016, the short term market traded about 115 BUs, constituting about 10% of total generation. The power exchanges grew the fastest registering growth of 20%. Overall, the share of power exchange market in total generation increased to 3.1% from 2.7% in the previous fiscal, while the share of long term market decreased to 90% from 91% in previous fiscal. Share of Power Market, Fiscal 2015-16 [Graphs on Share of Power Market, Fiscal 2015-16 is separately attached in PDF format with Form AOC-4(XBRL)] During the fiscal 2016, the installed capacity grew to 303 GW from 267 GW in fiscal 15 indicating a growth of 13% whereas energy generation increased to 1,164 BU from 1,097 BU in fiscal 15 reflecting a growth of just 6%. With low pace of growth in demand ample generation was available for sale on the exchange platform which resulted in low market clearing price (MCP) of Rs 2.73 per unit, about 22% lower than Rs 3.51 per unit in the previous fiscal. The low price discovery led to increase in cleared volume of 21% on your company’s platform. This scenario is expected to continue and your Company is likely to see positive impact on the cleared volume in fiscal 2016-17 too. On the transmission front, significant capacity addition took place which addressed the transmission congestion which otherwise prevails in import of power to southern region as well as northern region. With the commissioning of the Gwalior – Jaipur 765 kV double circuit line, import capacity of northern region increased by around 2,000 MW. Further, with commissioning of Narendra – Kohlapur 400 kV double circuit line, import capacity of southern region increased by about 500 MW. In addition, there were many other intra-regional lines which were commissioned during the fiscal resulting in reduction in transmission congestion. In this backdrop, the volume lost by your Company due to transmission congestion reduced by about 31% to 2,144 MUs compared to 3,086 MUs lost in fiscal 2015. During the year, introduction of UDAY (Ujwal DISCOM Assurance Yojana) was one of the significant interventions by the Government of India. The scheme comprises four initiatives - improving operational efficiencies of Discoms, reduction of cost of power, reduction in interest cost of Discoms and enforcing financial discipline on Discoms through alignment with state finances. It allows state governments, which own the Discoms, to take over 75 percent of their debt as of September 30, 2015 by issuance of State government bonds and the Discoms are expected to issue the bonds for the remaining 25 percent of their debt. As on date, ten (10) States have signed MoUs with Government of India, endorsing their commitment to implement distribution reforms. Implementation of UDAY is likely to result in reducing financial obligation of Discoms and improvement in their operational inefficiency. Once the Discoms revive operationally and financially, their capacity to procure power will increase which in turn will boost the demand for power. On 28 January 2016, the Government of India notified amendments in the National Tariff Policy 2006. The new Tariff Policy makes a strong pitch for promotion of clean energy, tightens the tariff setting process and promotes competition, efficiency in operations and improvement in quality of power supply. The amendments would ensure improved financial viability of the sector and increased demand of power from Discoms. Further, the Policy stipulates electricity to all consumers on 24x7 basis at reasonable and competitive rates which will boost demand for power. The Tariff Policy also provides for a new formulation for Cross Subsidy Surcharge (CSS). This formulation will increase CSS in a few states and, at the same time, the Policy also caps CSS at 20% of retail tariff of the relevant industry category. On 21 July 2015, IEX operationalized round-the-clock transaction in the intra-day contracts on the basis of direction notified by CERC. With round the clock trade in intraday contracts, the Discoms can schedule power closer to real time basis and replace unscheduled interchanges with scheduled drawal thereby reducing their real time deviations. Your Company has seen improvement in Term-Ahead Market with introduction of round the clock trading in intra-day contracts. Transparency and objectivity remained high on Government’s agenda. On 31 March 2016 Vidyut Pravah – a web/mobile based platform was launched. The platform provides competitive prices discovered and surplus power available on the exchange for each 15 minute time block on a State wise basis. The platform gives a clear message that the country is surplus in power and Discoms can buy power from your Company’s platform at very competitive rates. This initiative is expected to compel Discoms to procure and supply power instead of opting for load shedding. In order to align the regulatory framework with the fast-changing necessities on the ground, the CERC notified amendments in several of its key regulations such as: Deviation Settlement Regulations 2015, Open Access Regulations in Inter-state Transmission 2008, Ancillary Services Operations Regulations 2015, IEGC Regulations 2010, REC Regulations 2010 and Sharing of Inter-State Transmission Charges and Losses Regulations 2010. A synopsis of key regulatory developments at the State level is as below: • All States issued their tariff orders except Kerala, Rajasthan, Tamil Nadu and Tripura. • Maharashtra notified new Open Access Regulations on 31st March, 2016, allowing consumers to avail open access on a day-ahead basis on power exchanges, which was restricted earlier. However, the Discom has not yet started issuing No Objection Certificates (NOC) to industries for participation in the Day ahead Market on power exchanges. • Gujarat continued to constrain the issuance of NOC to open access consumers. Consequently, consumers are pursuing litigations in the Gujarat High Court. • Rajasthan also notified new Open Access Regulations in 2016, wherein some restrictive provisions concerning purchase of power through Exchange are there. Several Consumers have approached High Court of Rajasthan against these Regulations. • Gujarat, Haryana and Himachal Pradesh imposed Additional Surcharge which may affect viability of open access in these States. All these developments may impact the performance of your Company in the near future. Electricity Market 33,957 MUs (after considering real time curtailment) were traded by your Company in DAM in fiscal 2015-16 in comparison to 28,141 MUs last fiscal. The average daily volume was 93 MUs, about 21% up from 77 MUs in previous fiscal. A few key highlights of the Day-Ahead Market in this fiscal are as below: • One Nation- One Grid- One Price was realized on six different occasions in DAM (10 Nov’15, 29 Dec’15, 14 Jan’16, 30 Jan’16, 31 Jan’16 and 1 Feb’16). This implied there was no transmission congestion across the country. • Highest ever volume traded in DAM: 137 MUs on 15th September, 2015 • Total volume transacted in the short term market by DAM: 29% • Sell bids: 56,514 MUs, 38% up from 41,079 MUs in fiscal 15 • Buy bids: 43,101 MUs, almost same as 43,293 MUs in fiscal 15 • Market Clearing Price (MCP): Rs 2.73/unit, about 22% lower than Rs 3.51/unit in previous fiscal • Final Cleared volume: 34,067 MUs, up 21% from the previous fiscal [Graphs on IEX Cleared Volume in Fiscal 16 vs Fiscal 15 is separately attached in PDF format with Form AOC-4(XBRL)] [Graphs on Average ACP in Fiscal 16 vs Average ACP in Fiscal 15 is separately attached in PDF format with Form AOC-4(XBRL)] • Participation Trend: Total registered participants increased to 3,872 from 3,487 in the previous fiscal, more than 11% increase. Open Access consumer base also increased to 3,421, up by 12% from 3,047 in last fiscal. On a daily average basis, 1,035 participants traded in the DAM, as compared to 818 participants in last fiscal. The highest participation ever was observed on 21st May, 2015 when 1,263 participants traded in DAM. • Congestion: Northern and Southern States were most affected due to congestion in the Inter-State transmission corridors, adversely impacting the price for power in both regions. Prices in these States were higher in comparison to prices in other States: - For import to North, the corridors were congested for about 9% of the time through the year. - For import to South, the corridors were congested for about 44% of the time through the year. With commissioning of new transmission lines, there was reduction in transmission congestion in import of power to northern states as well as southern states. [Graphs on Percentage of time congestion in Northern and Southern Import is separately attached in PDF format with Form AOC-4(XBRL)] Overall, 2,144 MUs could not be traded due to congestion while in the last fiscal 3,086 MUs were lost. Term-Ahead Market (TAM): A total of 330 MUs were scheduled through TAM, 38% up from 239 MUs in the previous fiscal. The highest volume traded so far in this segment was achieved in July 2015 when close to 69 MUs were traded. REC Market During the year 31.39 lacs RECs were traded at Exchange, which is highest ever, reflecting increase of more than 100% in comparison with the previous fiscal. As of July, 2016 the REC inventory is about 172 lac RECs. The total RECs traded in a year are significantly lower than the RECs issued. This is mainly because the Discoms are not complying with the Renewable Purchase Obligation (RPO). In order to promote renewable energy, the Government has been placing thrust on RPO compliance which is expected to increase REC transaction on your Company’s platform. Other Developments • The Parliament Standing Committee on Energy has tabled a report, before the Parliament, on the “Role, Performance and Functioning of the Power Exchanges” in India. The report deals with various aspects of the Power Market such as Competition in Power Market, Role of Power Exchanges in development of the Power Market, Performance of the Power Exchanges, Price discovery mechanism of the Power Exchanges, Shareholding Pattern of the Power Exchanges, Cross border electricity trade through Power Exchanges, Promoting Renewable Energy Certificates trading through Power Exchanges, Role of Regulators in the development of the Power Market etc. As a pre-emptive measure, the board of the Company has formed a Committee consisting of board members and an independent renowned expert from Power Sector to assess efficacy of systems and processes of the Exchange to ensure avoidance of extraneous intervention and price fixing, to assess whether prices discovered on Day Ahead Market are fair and transparent and are a reflection of market conditions of supply /demand /Transmission factors and that whether the Clearing and settlement process of the exchange is transparent or not. The said Committee has submitted its report to the board concluding that a well defined and efficient system exists to ensure transparency and fair price discovery and to avoid extraneous intervention in the exchange and that the price discovery process, and contract specifications followed are in compliance with CERC approved business rules and that IEX DAM prices are a reflection of supply and demand factors. • During the previous year, the Central Electricity Regulatory Commission (‘CERC’) has appointed M/s Deloitte Touche Tohmatsu India Pvt. Ltd. (‘Deloitte’) for carrying out comprehensive review of affairs of your Company, covering the fY- 2011-12, 2012-13 & 2013-14. M/S Deloitte post review has submitted its report to the CERC and the CERC vide its order dated June 10, 2016, has directed the Exchange to comply with the recommendations made by the Deloitte in its review report. The Board of your Company has reviewed the observations/ recommendations made by Deloitte in its report and the Board is taking all the necessary actions as required to ensure compliance with all the recommendations made therein. • During the last year, the Company has enter into a ‘Perpetual License Agreement’ with M/s Financial Technologies (India) Limited, to acquire a perpetual technology license for its exchange trading software and the same was also approved by the shareholders of the Company at previous Annual General Meeting of the Company. The said transaction was not executed, as the same has been challenged by one of the Shareholders of the Company viz the M/s PTC India Financial Services Limited (‘PFS’). The implementation of the agreement is on hold, as per the order of the Hon’ble Delhi High Court and matter has been referred for Arbitration as per the Singapore International Arbitration Center (SIAC) rules and the matter is pending before the SIAC Arbitration. Recognition and Accolades Your Company received several accolades for its performance during the year, including the India Power Award 2015 for being the “Leader in Market Development”. Future Outlook: The aspiration of the Government to provide electricity on round the clock basis, implementation of distribution reforms through UDAY scheme, better fuel availability for power plants, generation capacity addition and augmentation of transmission infrastructure will lead to development of a vibrant power market in the country. With installed capacity of 303 GW, the peak demand in the fiscal was only 153 GW. Further, the present installed capacity can deliver generation of 1,650 BU while the actual generation in this fiscal was only 1,164 BU indicating a power surplus position in the country. The coal availability at reasonable cost with merchant generators also improved resulting in higher sell volume by these generators on your Company’s platform. This scenario is likely to continue in next 4-5 years. Besides, reduction in transmission congestion has provided added comfort to Discoms that they will be able to purchase power through your Company’s platform as per their needs. The Day Ahead Market provides a flexible platform to Discoms for meeting their demand. The Government of India aspires to achieve renewable capacity of 175 GW by 2022. The grid integration of renewable energy is a challenge considering the variable and infirm nature of renewable resources. Developed countries like Germany which have 30% of gross electricity consumption through renewables are able to manage scheduling and balancing of this green energy by transacting all their energy through Exchange. Similarly, in India also, the Power Exchange platform needs to be leveraged to balance renewable energy and to secure the grid operations. In the backdrop of aforementioned developments, the short-term market is slated to grow further and reach new heights. Power market development is your Company’s key focus in an endeavor to spur growth and progress. Introduction of Cross-Border Trade, Green Contracts and ESCerts Market are a few market segments your Company endeavors to introduce this year. The trade in the extended Intra-day contracts is another dynamic segment where liquidity is expected to gather pace in the near future. Moreover, with enhanced availability of the inter-state transmission corridor, liquidity and depth in the market are likely to increase further. Details regarding energy conservationThough the operations of your Company are not energy intensive, your Company takes adequate measures to reduce energy consumption by using energy-efficient lightning in office, computer systems and procuring energy-efficient equipment’s. As an on-going process, your Company continuously evaluates new technologies and techniques to make infrastructure more energy efficient. Since your Company does not carry out any manufacturing activity, the particulars regarding conservation of energy, technology absorption and other particulars as required by the Companies (Accounts) Rules, 2014 are not applicable. Details regarding technology absorptionThough the operations of your Company are not energy intensive, your Company takes adequate measures to reduce energy consumption by using energy-efficient lightning in office, computer systems and procuring energy-efficient equipment’s. As an on-going process, your Company continuously evaluates new technologies and techniques to make infrastructure more energy efficient. Since your Company does not carry out any manufacturing activity, the particulars regarding conservation of energy, technology absorption and other particulars as required by the Companies (Accounts) Rules, 2014 are not applicable. Details regarding foreign exchange earnings and outgoThe information required pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 on the foreign exchange earnings and outgo of the Company during the FY 2015-16 is given below: Foreign Exchange Earning & Outgo: ParticularsAmount (In Rs.) A-Foreign Exchange EarningsNil TotalNil B- Foreign Exchange Outgo 1.Expense8,472,729 2.Dividend on Equity Shares119,300,839 3.Dividend on Preference Shares (CCPS)28,812,189 Total156,585,757 Disclosures in director’s responsibility statementPursuant to Section 134 of the Companies Act, 2013, the Directors state that: i) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departure, if any; ii) Appropriate accounting policies have been selected and applied consistently and have 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, 2016 and of the profit of the Company for the year ended March 31, 2016; iii) Proper and sufficient care has been taken 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 annual accounts have been prepared on a going concern basis; v) Proper Internal Financial Controls were followed by the Company and such internal financial controls are adequate and were operating effectively; vi) Proper systems are devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. |