RPower Report

7/28/2019 RPower Report

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Annual Report2011-12


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Profle Reliance Power Limited (RPower) is a part o the Reliance Group, one o the

leading business houses in India.

RPower is engaged in the development and construction o one o the largestport olio o power generation projects in India.

RPower is presently operating 1,540 MW o power capacity.RPower also has the largest captive coal reserves in the private sector in India,besides owning coal mines in Indonesia.

Our projects are diverse in geographic location, uel source and o take.

RPower strongly believes in clean green power and our projects are / will beusing technologies with minimum environment impact.

Mission: Excellence in Power Generation l To attain global best practices and become a leading power generating

Company.

l To achieve excellence in project execution, quality, reliability, sa ety andoperational e ciency.

l To relentlessly pursue new opportunities, capitalizing on synergies in thepower generation sector.

l To consistently enhance our competitiveness and deliver pro table growth. l To practice highest standards o corporate governance and be a nancially

sound Company.

l To be a responsible corporate citizen nurturing human values and concern orsociety.

l To improve the lives o local community in all our projects.

l To be a partner in nation building and contribute towards Indias economicgrowth.

l To promote a work culture that osters learning, individual growth, team spiritand creativity to overcome challenges and attain goals.

l To encourage ideas, talent and value systems and become the employer o choice.

l To earn the trust and con dence o all stakeholders, exceeding theirexpectations.

l To uphold the guiding principles o trust, integrity and transparency in allaspects o interactions and dealings.

This Report is printed on environmental riendly paper.


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Reliance Power Limited

18 th Annual General Meeting on Tuesday, September 4, 2012 at 2.00 p.m. or soon a ter the conclusiono the Annual General Meeting o Reliance Communications Limited convened on the same day,

whichever is later, at Birla Matushri Sabhagar, 19, New Marine Lines, Mumbai 400 020

The Annual Report can be accessed at www.reliancepower.co.in

Board o Directors

Shri Anil Dhirubhai Ambani - Chairman

Shri J. L. Bajaj

Dr. Yogendra Narain

Dr. V. K. Chaturvedi

Chie Executive O fcer

Shri J. P. Chalasani

Company Secretary and Manager

Shri Ramaswami Kalidas

AuditorsM/s. Chaturvedi & Shah

M/s. Price Waterhouse

Registered O fce

H Block, 1 st FloorDhirubhai Ambani Knowledge CityNavi Mumbai 400 710Maharashtra, India

Registrar and Trans er Agent

Karvy Computershare Private LimitedMadhura Estate, Municipal No. 1-9/13/CPlot No. 13 & 13C, Madhapur VillageHyderabad 500 081, Andhra Pradesh, Indiawebsite : www.karvy.com

Investor Helpdesk

Toll ree no (India) : 1800 4250 999Telephone no. : +91 40 4030 8000

Fax no. : +91 40 2342 0859

E-mail : [email protected]

Post your request : http://kcpl.karvy.com/adag

Contents Page No.

Letter to Shareowners ............................................................... 5

Notice o Annual General Meeting .......................................... 7

Directors Report ......................................................................10

Auditors Certi cate on Corporate Governance ......................13

Management Discussion and Analysis ...................................14

Corporate Governance Report ................................................20

Investor In ormation ................................................................32

Auditors Report on Financial Statements .............................37

Annexure to Auditors Report .................................................38

Balance Sheet ..........................................................................40

Statement o Pro t and Loss..................................................41

Cash Flow Statement ..............................................................42

Notes to the Financial Statements ........................................43

Auditors Report on the ConsolidatedFinancial Statements ...............................................................73

Consolidated Balance Sheet ...................................................74

Consolidated Statement o Pro t and Loss ...........................75

Consolidated Cash Flow Statement .......................................76

Notes to the ConsolidatedFinancial Statements ...............................................................77

Financial In ormation o Subsidiary Companies ................. 110

Attendance Slip and Proxy Form ......................................... 111


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Letter to Shareowners

My dear ellow shareowners,

It is my privilege to give you a snapshot o how the year2011-12 went or Reliance Power. We have delivered a robustper ormance o which we can all be justi ably proud.

Reliance Powers vision is to become one o the largestintegrated power generation and coal mining Companies in theworld. O the power projects which the Company is developing,1,540 MW is already operational, while the balance capacitiesare under various stages o construction and development.

In the year 2012, we success ully commissioned, ahead o schedule, the second 600 MW phase o our thermal power plantin Rosa, situated in Shahjahanpur district o Uttar Pradesh. Withthis the Rosa plant has reached its ull capacity o 1,200 MW,all dedicated to the people o Uttar Pradesh.

The rst phase o the Rosa plant has already set benchmarks interms o operational e ciency and nancial per ormance. Thiswas achieved in spite o the acute shortage o coal acing theCountry. Rosa Phase I generated 4,233 million units o electricityand delivered a net pro t o Rs. 339 crore.

Your Company commissioned Indias biggest solar power plantin Village Dhursar, Dist. Jaisalmer, in Rajasthan. The 40 MWsolar photovoltaic thin lm plant was set up in a mere mattero 129 days. This plant will generate 70 million kilowatt hourso clean and green energy annually or potential consumptiono 75,000 households. The entire debt or the plant has been

unded by US Exim Bank and Asian Development Bank (ADB).The commissioning o this plant is the rst major step in ourvision to become Indias largest green power Company.

We are also constructing Indias biggest gas-based power plantin Samalkot, close to Indias east coast in Andhra Pradesh andthe plant is poised or commissioning in a record time o 14months. This bears testimony to your Companys strong projectexecution capabilities. We now await the allocation o domesticnatural gas rom the government and look orward to providingenvironmentally riendly clean and green power to the southern

region.

Reliance Power recently synchronised the rst o two unitso its 600 MW Butibori Thermal Power Project near Nagpurin Maharashtra. Power generated rom the plant will mainly

be distributed to industrial as well as distribution utilities inMaharashtra. The rst unit o the plant has been synchronisedin a record time o just over 21 months rom commencemento boiler erection to synchronisation. The second 300 MW unito the plant is also on track or commissioning in the comingmonths.

The year 2012-2013 would see the commissioning o therst 660 MW unit o the 3,960 MW Sasan Ultra Mega Power

Project (UMPP). This would herald, or us, the beginning o theuse o supercritical technology. All o your Companys uturethermal power plants would employ supercritical technology,

which notably translates to higher e ciencies to reduce bothuel costs and carbon dioxide emissions.

In Dhursar in Rajasthan, your Company is also setting up a100 MW Concentrated Solar Power (CSP) project. CSP plantsproduce electric power by converting the suns energy intoheat using various mirror con gurations. A conventional steamturbine generator then converts this heat-energy into electricity.The CSP plant is being developed under the Jawaharlal NehruNational Solar Mission, which has set a target o 20 GW solarpower by 2022. The combined solar power capacity o over 140MW in this location in Rajasthan will generate enough electricityto power over 250,000 homes in India.

Construction and development activities are progressing rapidlyin Vashpet in Maharasthra, where we are setting up wind powergeneration arms.

Reliance Power is on track or becoming one o Indias largestresources Companies in the power sector with work progressingat a brisk pace in the development o coal mines associatedwith our Sasan UMPP. Coal production will begin ahead o thecommissioning o the Sasan power plant. Your Company has alsomade signi cant progress in the mine development activities inIndonesia, where we own three coal mines capable o producing


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up to 30 million tonnes per annum. Our coal resources will ensureuel sel -su ciency or a large proportion o our power plants.

Per ormance Review

A snapshot o the Companys consolidated nancial per ormanceduring FY11-12 is provided below or your re erence:

Total income of ` 2,767 crore as compared to ` 1,918crore in the previous year.

Net pro t of ` 867 crore as compared to ` 760 crorein the previous year.

Earnings Per Share (EPS) (basic and diluted) of ` 3.09as compared to ` 2.94 in the previous year.

Corporate Governance

RPower has always maintained the best governance standardsand practices by adopting, as is the norm or all constituentCompanies o the Group, the Reliance Group - CorporateGovernance Policies and Code o Conduct. These Policies andCode prescribe a set o systems, processes and principles, whichcon orm to the highest international standards and are reviewedperiodically to ensure their continuing relevance, e ectivenessand responsiveness to the needs o investors, both local andglobal, and all other stakeholders.

Social Commitments

We are developing a large port olio o projects which requiresubstantial use o natural resources such as land, water andminerals. We take adequate care in designing our powergeneration plants in a manner that optimises the utilisation o land, thereby bringing down the aggregate land requirement andminimising the potential or disruption and displacement o localcommunities. We are also adopting cleaner technologies related

to power generation that reduce the consumption o uel andwater required or plant operations, thereby conserving preciousnatural resource and contributing to a greener and healthierenvironment.

Many o the areas in which we are implementing projectsare not very well developed and it will always be our missionto contribute towards improving the quality o li e o thecommunities living in these areas. Indeed, we believe that oursuccess in executing large-scale generation projects is criticallydependent on ollowing a participatory development-orientedapproach that strengthens our bond with the local population.

In order to achieve these objectives, we have made signi cantoutlays in healthcare, education and livelihood opportunities orlocal communities.

Our Commitment

Our ounder, the legendary Shri Dhirubhai Ambani, gave us asimple mantra: to aspire to the highest global standards o quality, e ciency, operational per ormance and customer care.We remain committed to upholding that vision.

Thank you, shareowners, or your continued support in our journeyo delivering consistent, competitive, pro table and responsiblegrowth. I could not be more excited about the journey ahead orReliance Power.

Anil Dhirubhai Ambani Chairman

Letter to Shareowners


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Notice

Notice is hereby given that the 18 th Annual General Meeting o the Members o Reliance Power Limited will be held on Tuesday,September 4, 2012 at 2.00 p.m. or soon a ter the conclusiono the Annual General Meeting o Reliance CommunicationsLimited convened on the same day, whichever is later, at BirlaMatushri Sabhagar, 19, New Marine Lines, Mumbai 400 020, totransact the ollowing business:

Ordinary Business

1. To consider and adopt the audited Balance Sheet as atMarch 31, 2012, the audited Statement o Pro t and Loss

or the nancial year ended on that date and the reports o the Board o Directors and Auditors thereon.

2. To appoint a Director in place o Dr. Yogendra Narain, whoretires by rotation and being eligible, o ers himsel orre-appointment.

3. To appoint Auditors and to x their remuneration and inthis regard, to consider and, i thought t, to pass withor without modi cation(s), the ollowing resolution as anOrdinary Resolution:RESOLVED THAT M/s. Chaturvedi & Shah, CharteredAccountants (Firm Registration No. 101720W) and M/s.Price Waterhouse, Chartered Accountants (Firm RegistrationNo. 301112E) be and are hereby appointed as Auditorso the Company, to hold o ce rom the conclusion o this Annual General Meeting until the conclusion o thenext Annual General Meeting o the Company, on suchremuneration as shall be xed by the Board o Directors.

Special Business

4. Issue o Securities to the Qualifed Institutional Buyers

To consider and, i thought t, to pass with or without

modi cation(s), the ollowing resolution as a SpecialResolution:

a) RESOLVED THAT pursuant to Section 81(1A) and allother applicable provisions, i any, o the CompaniesAct, 1956 (Act) (including any statutory modi cation(s)or re-enactment(s) thereo , or the time being in

orce) and enabling provisions o the Memorandumand Articles o Association o the Company, the ListingAgreement entered into with the Stock Exchangesand subject to the provisions o Chapter VIII o theSecurities and Exchange Board o India (Issue o Capital and Disclosure Requirements) Regulations,2009 (SEBI ICDR), the provisions o the ForeignExchange Management Act, 1999 and the ForeignExchange Management (Trans er or Issue o Securityby a Person Resident Outside India) Regulations,2000, applicable rules, regulations, guidelines or lawsand/or any approval, consent, permission or sanctiono the Central Government, Reserve Bank o India andany other appropriate authorities, institutions or bodies(hereina ter collectively re erred to as the appropriateauthorities), and subject to such conditions as maybe prescribed by any one o them while granting anysuch approval, consent, permission and/or sanction(hereina ter re erred to as the requisite approvals),which may be agreed to by the Board o Directors o the Company (hereina ter called the Board whichterm shall be deemed to include any Committeewhich the Board may have constituted or hereina ter

constitute to exercise its powers including the powercon erred by this resolution), the Board be and ishereby authorised to issue, o er and allot equityshares/ ully convertible debentures/partly convertibledebentures/non convertible debentures with warrants/any other securities (other than warrants), which areconvertible into or exchangeable with equity shares onsuch date as may be determined by the Board butnot later than 60 months rom the date o allotment(collectively re erred to as QIP Securities), to theQuali ed Institutional Buyers (QIBs) as per the SEBIICDR, whether or not such QIBs are Members o theCompany, on the basis o placement document(s), atsuch time or times in one or more tranche or tranches,at par or at such price or prices, and on such terms andconditions and in such manner as the Board may, inits absolute discretion determine, in consultation withthe Lead Managers, Advisors or other intermediaries,provided however that the aggregate amount raisedby issue o QIP Securities as above shall not resultin increase o the issued and subscribed equity sharecapital o the Company by more than 25% o the thenissued and subscribed equity shares o the Company.

b) RESOLVED FURTHER THAT the relevant date or thedetermination o applicable price or the issue o theQIP Securities shall be the date on which the Board o the Company decide to open the proposed issue, orthe date on which the holder o the securities whichare convertible into or exchangeable with equity sharesat a later date becomes entitled to apply or the saidshares, as the case may be (Relevant Date).

c) RESOLVED FURTHER THAT the Board be and is herebyauthorised to issue and allot such number o equityshares as may be required to be issued and allotted uponconversion o any Securities re erred to in paragraph (a)above or as may be necessary in accordance with theterms o the o ering, all such shares shall rank pari

passu with the then existing shares o the Company inall respects, as may be provided under the terms o theissue and in the o ering document.

d) RESOLVED FURTHER THAT such o these QIPSecurities to be issued as are not subscribed may bedisposed o by the Board to such person or persons andin such manner and on such terms as the Board may inits absolute discretion think t in accordance with theprovisions o law.

e) RESOLVED FURTHER THAT the issue to the holderso the Securities with equity shares underlying suchsecurities shall be inter alia, subject to suitableadjustment in the number o shares, the price and thetime period, etc., in the event o any change in theequity capital structure o the Company consequentupon any merger, de-merger, amalgamation, takeoveror any other re-organisation or restructuring in theCompany.

) RESOLVED FURTHER THAT or the purpose o givinge ect to any issue or allotment o QIP Securities orinstruments representing the same, as describedin paragraph (a) above, the Board be and is hereby

authorised on behal o the Company to do all suchacts, deeds, matters and things as it may at its absolute


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discretion, deem necessary or desirable or suchpurpose, including without limitation, the entering intoo underwriting, marketing and institution/trustees/agents and similar agreements/and to remuneratethe Managers, underwriters and all other agencies/intermediaries by way o commission, brokerage, eesand the like as may be involved or connected in sucho erings o Securities, with power on behal o theCompany to settle any questions, di culties or doubtsthat may arise in regard to any such issue or allotmentas it may in its absolute discretion deem t.

g) RESOLVED FURTHER THAT or the purpose a oresaid,the Board be and is hereby authorised to settle allquestions, di culties or doubts that may arise inregard to the issue, o er or allotment o QIP Securitiesand utilisation o the issue proceeds including butwithout limitation to the creation o such mortgage/hypothecation/charge on the Companys assets underSection 293(1)(a) o the said act in respect o the

a oresaid QIP Securities either on pari passu basis orotherwise or in the borrowing o loans as it may in its

absolute discretion deem t without being required toseek any urther consent or approval o the Membersor otherwise to the end and intent that the Membersshall be deemed to have given their approval theretoexpressly by the authority o this resolution.

h) RESOLVED FURTHER THAT the Board be and ishereby authorised to delegate all or any o the powersherein con erred to any Committee o Directors or anyother O cer(s)/Authorised Representative(s) o theCompany to give e ect to the a oresaid resolution.

By order o the Board o Directors

Ramaswami KalidasCompany Secretary

Registered o ce:H Block, 1 st FloorDhirubhai Ambani Knowledge City

Navi Mumbai 400710 July 3, 2012

Notes

1. A Member entitled to attend and vote at the AnnualGeneral Meeting (the Meeting) is entitled to appointa proxy to attend and vote on a poll, instead o hersel /himsel and the proxy need not be a Member o theCompany. The instrument appointing proxy should,however, be deposited at the Registered O fce o theCompany not less than orty eight hours be ore thecommencement o the Meeting.

2. Corporate Members are requested to send a dulycerti ed copy o the Board Resolution authorising theirrepresentative(s) to attend and vote on their behal at theMeeting.

3. Members/Proxies should ll in the Attendance Slip orattending the Meeting and bring their Attendance Slip alongwith their copy o the Annual Report to the Meeting.

4. In case o joint holders attending the Meeting, only such joint holder who is higher in the order o names will beentitled to vote.

5. Members who hold shares in electronic orm are requestedto write their DP ID and Client ID numbers and those whohold share(s) in physical orm are requested to write theirFolio Number in the Attendance Slip or attending theMeeting to acilitate identi cation o membership at theMeeting.

6. Relevant documents re erred to in the accompanying Noticeare open or inspection by the Members at the RegisteredO ce o the Company on all working days, except Saturdaysbetween 11.00 a.m. and 1.00 p.m. up to the date o theMeeting. The certi cate rom the Auditors o the Companycon rming the compliance o the SEBI (Employee StockOption Scheme and Employee Stock Purchase Scheme)Guidelines, 1999 with respect to the Companys ESOSPlans will be available or inspection at the Meeting.

7. The Companys Register o Members and Trans er Books willremain closed rom Saturday, August 25, 2012 to Tuesday,

September 4, 2012 (both days inclusive) or the purpose o the Meeting.

8. Members are requested to intimate immediately any changein their address or other mandates to their DepositoryParticipants with whom they are maintaining their demataccounts. The Company or its Registrar and Trans er Agentcannot change mandates or shares in electronic orm.

9. Members holding shares in physical orm are requested toadvise any change o address immediately to the Company/Registrar and Trans er Agent, Karvy Computershare PrivateLimited.

10. Non-resident Indian Members are requested to in ormKarvy Computershare Private Limited immediately on:a. the change in the residential status on return to India

or permanent settlement.b. the particulars o the bank accounts maintained in India

with complete name, branch, account type, accountnumber and address o the bank, i not urnishedearlier.

11. Re-appointment o Director: At the ensuing Meeting,

Dr. Yogendra Narain, Director o the Company retires byrotation and being eligible o ers himsel or re-appointment.The details pertaining to Dr. Yogendra Narain required tobe provided pursuant to the requirements o Clause 49 o the listing agreement are urnished in the statements onCorporate Governance which orm a part o this AnnualReport.

12. Members are advised to re er to the section titled InvestorIn ormation provided in this Annual Report.

13. Members are requested to ll in and send the Feedback Formprovided in the Investor Relations section on the Companyswebsite www.reliancepower.co.in to aid the Company in itsconstant endeavour to enhance the standards o service to

investors.

Notice


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14. The statement containing the salient eatures o the auditedBalance Sheet, Statement o pro t and loss, cash fowstatement and auditors report on the Abridged FinancialStatements, is sent to the Members, along with the AbridgedConsolidated Financial Statements. Any Member interestedin obtaining a copy o the ull Annual Report, may write tothe Registrar and Trans er Agent o the Company.

Notice

15. An Explanatory statement pursuant to Section 173(2) o the Companies Act, 1956, relating to the special businessto be transacted at the Meeting is annexed hereto.

Explanatory Statement pursuant to Section 173(2) o the Companies Act, 1956 to the accompanying Notice dated July 3, 2012

Item No. 4Issue o Securities to the Qualifed Institutional BuyersThe Company, a Member o the Reliance Group, is engaged indeveloping, constructing and operating power projects in di erentparts o the Country. The Company on its own and through itssubsidiaries has a larged planned port olio o power generationcapacity, both operational as well as under development. Inorder to part nance such a large port olio o power projects andto enhance its global competitiveness and ability to compete

with the peer groups in the domestic and international markets,the Company needs to strengthen its nancial position and networth by augmenting its long term resources.For the above purposes as also or meeting the requirements

or general corporate purposes, as may be decided by theBoard rom time to time, it is proposed to seek the enablingauthorisation o the Members o the Company in avour o theBoard o Directors (Board which expression or the purposeso this Resolution shall include any Committee o Directorsconstituted / to be constituted by the Board ), without theneed or any urther approval rom the Members, to undertakethe Quali ed Institutional Placement (QIP) with the Quali edInstitutional Buyers (QIB), in accordance with the provisionso Chapter VIII o the SEBI (Issue o Capital and Disclosure

Requirements) Regulations, 2009, as amended rom time totime (SEBI ICDR), as set out in the special resolution at ItemNo. 4 o the accompanying Notice.In view o above, the Board may, in one or more tranches, issue,o er and allot equity shares / ully convertible debentures/partly convertible debentures / non convertible debentures withwarrants / any other securities (other than warrants), which areconvertible into or exchangeable with equity shares on suchdate(s) as may be determined by the Board but not later than60 months rom the date o allotment (collectively re erred toas QIP Securities). The QIP Securities proposed to be issued bythe Board shall be subject to the provisions o the SEBI ICDRincluding the pricing, which will not be less than the average o the weekly high and low o the closing prices o the related sharesquoted on the stock exchanges during the two weeks precedingthe relevant date. The relevant date or the determination o applicable price or the issue o the QIP Securities shall be thedate o the meeting in which the Board o the Company decidesto open the proposed issue or in case o securities which areconvertible into or exchangable with equity shares at a later date,the date on which the holder o such securities becomes entitledto apply or the said shares, as the case may be.For the reasons a oresaid, an enabling special resolution isthere ore proposed to be passed to give adequate fexibility anddiscretion to the Board to nalise the terms o the issue. The QIPSecurities issued pursuant to the o ering would be listed on theIndian stock exchanges.

The proposed issue o QIP Securities as above may be made inone or more tranches such that the aggregate amount raised by

the issue o QIP Securities shall not result in the increase in theissued and subscribed equity share capital o the Company bymore than 25 per cent o the then issued and subscribed equityshares o the Company as on the relevant date.

The proposed Special Resolution is only enabling in nature andthe Board may, rom time to time, consider the extent, i any, towhich the securities may be issued.

The QIP Securities issued pursuant to the o er, i necessary,may be secured by way o mortgage / hypothecation o the Companys assets as may be nalized by the Board inconsultation with the Security Holders / Trustees in avour o Security Holders / Trustees or the holders o the said securities.The security that may have to be created or the purposes o this issue, as above may come within the purview o Section293(1)(a) o the Companies Act, 1956. Necessary approval hasalready been accorded by Members o the Company or creationo such Security(s) by passing o resolution through postal balloton September 1, 2007.

Section 81(1A) o the Companies Act, 1956 and ListingAgreement entered into with the Stock Exchanges, provide,

inter alia , that where it is proposed to increase the subscribedshare capital o the Company by allotment o urther shares,such urther shares shall be o ered to the persons, who onthe date o the o er are holders o the equity shares o theCompany, in proportion to the capital paid-up on those shares aso that date unless the Members decide otherwise. The SpecialResolution seeks the consent and authorisation o the Membersto the Board o Directors to o er and issue the QIP Securities,in consultation with the Lead Managers, Legal Advisors andother intermediaries to o er and issue the QIP Securities to anypersons, whether or not they are Members o the Company.

The Board o Directors accordingly recommends the specialresolution set out at Item No. 4 o the accompanying Notice orthe approval o the Members.

None o the Directors and Manager o the Company is, in anyway, deemed to be concerned or interested in the said resolution,except to the extent o their shareholding in the Company.

By order o the Board o Directors

Ramaswami KalidasCompany Secretary

Registered o ce:H Block, 1 st FloorDhirubhai Ambani Knowledge CityNavi Mumbai 400710

July 3, 2012


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Reliance Power LimitedDirectors Report

Dear Shareowners,

Your Directors present the 18 th Annual Report and the audited accounts or the nancial year ended March 31, 2012.

Financial Results

The standalone per ormance o the Company or the nancial year ended March 31, 2012 is summarised below;

Particulars Financial Year endedMarch 31, 2012

Financial Year endedMarch 31, 2011

` inlakh

US $in lakh**

` inlakh

US $in lakh**

Total Income 53,185 1,040 47,153 1,056

Pro t be ore tax 31,094 608 25,364 568

Less: Provision or taxation 8 - (2,091) (47)

Pro t a ter tax 31,086 607 27,455 615

Balance o Pro t brought orward rom previous period 39,135 765 61,680 1,381Trans er to General Reserve 35,000 684 50,000 1,120

Balance carried to Balance Sheet 35,221 688 39,135 876

* Figures o previous year have been regrouped and reclassi ed, wherever required.** ` 51.16 = US $ 1 Exchange rate as on March 31, 2012 ( ` 44.65 = US $ 1 as on March 31, 2011)

Financial Per ormance

During the year under review, the total Income o the Companywas ` 53,185 lakh against ` 47,153 lakh in the previous year ona standalone basis. The Company has earned a Pro t a ter tax o ` 31,086 lakh compared to ` 27,455 lakh in the previous year

on a stand alone basis.Dividend

Your Directors have not recommended any dividend on equityshares or the year under review.

Business Operations

The Company is in the business o setting up and operating powerprojects and in the development o coal mines. The Companyhas a large port olio o power projects and is also developingcoal mines in India and Indonesia. O the power projects whichthe Company is developing through its Subsidiaries, 1,540 MWare already operational while the other power projects are undervarious stages o development.

The port olio o projects which the Company is developing isdiversi ed with regard to location, uel and o -take. The projectsare spread across various states in India and its coal mines are alsolocated in Indonesia. A major portion o the power generatingcapacity would be based on coal as the primary uel. The othersinclude gas based power projects, hydro-electric power projectsand power projects based on renewable energy resources suchas solar and wind.

Redemption o FCCBs

The liabilities in respect o the 4.928 per cent Foreign CurrencyConvertible Bonds (FCCBs) amounting to US $ 299.9 million( ` 1,474.93 crore) which had devolved on RPower consequent

on the approval o the Composite Scheme o Arrangement

involving, inter alia, Reliance Natural Resources Limited andReliance Power Limited and others, has been redeemed in ullon their due date o maturity during the year 2011-12.

The Company has no outstanding FCCBs as on March 31, 2012.

Scheme o Arrangement

Sasan Power In rastructure Limited, a wholly owned subsidiary o the Company amalgamated into the Company with e ect romFebruary 23, 2012, in terms o the Scheme o Amalgamationsanctioned by the Honble High Court o Judicature at Bombayvide order dated December 23, 2011. The appointed date wasSeptember 1, 2011.

Management Discussion and Analysis

Management Discussion and Analysis Report or the year underreview as stipulated under Clause 49 o the listing agreementwith the Stock Exchanges in India is presented in a separate

section orming part o this Annual Report.Subsidiary Companies

During the year, Shangling Hydro Power Private Limited, SumteKothang Hydro Power Private Limited, Teling Hydro Power PrivateLimited, Lara Sumta Hydro Power Private Limited, Purthi HydroPower Private Limited and Reliance Clean Energy Private Limited,have become wholly owned subsidiaries o the Company.

During the year, Reliance Biomass Power Private Limited,Reliance Tidal Power Private Limited, Reliance Geothermal PowerPrivate Limited, Reliance Green Power Private Limited, RelianceRenewable Power Private Limited, Solar Generation Company(Rajasthan) Private Limited and Sasan Power In rastructureLimited (since merged), have ceased to be subsidiaries o theCompany.


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Directors Report

In accordance with the general circular issued by the Ministryo Corporate A airs (MCA), Government o India (GOI), BalanceSheet, Statement o Pro t and Loss and other documents o thesubsidiary companies are not attached with the Balance Sheeto the Company. The Company shall make available the copies o annual accounts o the subsidiary companies and related detailedin ormation to the shareholders o the Company seeking thesame. The annual accounts o the subsidiary companies will alsobe kept or inspection by any shareholder at the Registered O ceo the Company and that o respective subsidiary companies.

Further, pursuant to the provisions o Accounting Standard AS-21 and AS-27 prescribed under the Companies (AccountingStandards) Rules, 2006 and Listing Agreement as prescribed bythe Securities and Exchange Board o India, the ConsolidatedFinancial Statements presented by the Company orm part o this Annual Report.

Directors

In terms o the provisions o the Companies Act, 1956,Dr. Yogendra Narain, Independent Director o the Company retiresby rotation and being eligible, o ers himsel or re-appointmentat the ensuing Annual General Meeting.

A brie resume o the Director retiring by rotation at the ensuingAGM, nature o expertise in speci c unctional areas andnames o the companies in which he holds directorship and/or membership/ chairmanships o Committees o the respectiveBoards, shareholding and relationship between Directors inter se as stipulated under Clause 49 o the Listing Agreement with theStock Exchanges in India, is given in the section on CorporateGovernance Report orming part o this Annual Report.

Shri S. L. Rao was appointed as an Independent Director o the Company on September 30, 2007 as a representative o Reliance In rastructure Limited (RIn ra) which is a PromoterCompany with a signi cant equity holding in the Company.

Shri Rao had completed on April 20, 2012, three consecutiveterms o o ce o three years each as an Independent Director inRIn ra. In line with the Groups Corporate Governance Policy andin accordance with the recommendatory provisions o clause 49in the Listing Agreement relating to corporate governance, ShriRao has relinquished o ce as a Director in RIn ra e ective romApril 20, 2012.

In consequence o the above, Shri Rao has also relinquishedhis o ce as a Director in the Company e ective rom April 20,2012.

The Board o Directors have placed on record their sincereappreciation or the valuable contribution made by Shri Raoduring his tenure o association with the Company.

Directors Responsibility Statement

Pursuant to the requirements under Section 217(2AA) o theCompanies Act, 1956 with respect to the Directors ResponsibilityStatement, it is hereby con rmed that:

i. in the preparation o the annual accounts or nancialyear ended March 31, 2012, the applicable AccountingStandards had been ollowed along with proper explanationrelating to material departures;

ii. the Directors had selected such accounting policies andapplied them consistently and made judgments and

estimates that are reasonable and prudent so as to give atrue and air view o the state o a airs o the Company asat March 31, 2012 and o the Pro t o the Company orthat period;

iii. the Directors had taken proper and su cient care or themaintenance o adequate accounting records in accordancewith the provisions o the Companies Act, 1956 orsa eguarding the assets o the Company and or preventingand detecting raud and other irregularities; and

iv. the Directors had prepared the annual accounts or nancialyear ended March 31, 2012 on a going concern basis.

Consolidated Financial Statements

The Audited Consolidated Financial Statements based on theFinancial Statements received rom subsidiaries, as approvedby their respective Board o Directors, have been prepared inaccordance with the Accounting Standard 21 (AS-21) onConsolidated Financial Statements and Accounting Standard 27

(AS-27) on Financial Reporting o Interests in Joint Ventures,noti ed under Section 211(3C) o the Companies Act, 1956read with the Companies (Accounting Standards) Rules, 2006,as applicable.

Auditors and Auditors Report

M/s. Chaturvedi & Shah, Chartered Accountants and M/s. PriceWaterhouse, Chartered Accountants, Auditors o the Company,hold o ce until the conclusion o the ensuing Annual GeneralMeeting and are eligible or re-appointment.

The Company has received letters rom M/s. Chaturvedi & Shah,Chartered Accountants and M/s. Price Waterhouse, CharteredAccountants, to the e ect that their appointment, i made,

would be within the prescribed limits under Section 224(1B) o the Companies Act, 1956, and that they are not disquali ed romsuch appointment in terms o Section 226 o the CompaniesAct, 1956.

The observations and comments given by Auditors in their Reportread together with notes to Accounts are sel explanatory andhence do not call or any urther comments under Section 217o the Companies Act, 1956.

Particulars o Employees

In terms o the provisions o Section 217(2A) o the CompaniesAct, 1956 read with the Companies (Particulars o Employees)Rules, 1975, as amended, the names and other particulars o employees are set out in the Annexure to the Directors Report.However, having regard to the provisions o Section 219(1)(b)(iv) o the Companies Act, 1956, the Annual Report excludingthe a oresaid in ormation is being sent to all the Members o theCompany and others entitled thereto. Any Member interested inobtaining such particulars may write to the Company Secretaryat the Registered O ce o the Company.

Employees Stock Option Scheme

As reported last year, the ESOS Compensation Committee hadapproved to grant up to 200,00,000 Options exercisable intoequal number o ully paid up Equity shares o the Companyto eligible Employees o the Company and its subsidiaries inaccordance with the Scheme. During the year under review, theCompany has not granted any Options to the employees o theCompany.


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Reliance Power LimitedDirectors Report

The particulars as required under clause 12 o SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme)Guidelines, 1999, are as ollows :

Sr. Particulars ESOS Plan 2010

a. Total options granted 85,00,000

b. Pricing ormula decided by ESOS Compensation Committee The exercise price is as per the Planunder the ESOS Scheme

c. Options vested 85,00,000

d. Options exercised Nil

e. Total number o equity shares arising as a result o exercise o Options Nil

. Options lapsed during the year Nil

g. Variation o terms o Options Nil

h. Money realized by exercise o options during the year Nil

i. Total number o Options in orce at the end o the year 85,00,000

j. Employee wise details o Options granted to :

i. Senior Managerial personnel (i.e. Managing Director / Whole-timeDirector/Manager)

Nil

ii. Employee who receives grant in any one year o option amountingto 5 % or more o option granted during the year

Nil

iii. Identi ed Employees who were granted options, during any oneyear equal to or exceeding 1 % o the issued capital (excludingoutstanding warrants and conversions) o the Company at the timeo grant

Nil

k. Diluted Earning Per Share (EPS) pursuant to issue o shares on exerciseo Options calculated in accordance with Accounting Standard (AS) 20

N.A.

There would not be any resh issue o equityshares o the Company upon exercise o Options by

employees

l. The di erence between employee compensation cost using intrinsicvalue method and air value o the Options and impact o this di erenceon

Pro t

EPS o the Company

` 434 lakhs

( ` 0.02)

m. Weighted average exercise prices o Options granted during the yearwhere exercise price is less than market price

-

n. Signi cant assumptions made in computation o air valuei. risk ree interest rateii. weighted average period o optioniii. expected volatilityiv. expected dividends (yield), andv. the price o the underlying share in the market at the time o grant

7.74%7.25 Years41.88%

- ` 140.20

The Company has received a certi cate rom the Auditors o theCompany that the ESOS Plan 2010 has been implemented inaccordance with the Guidelines and as per the resolution passedby the Members o the Company authorizing the issuance o ESOS.

Conservation o Energy, Technology Absorption and ForeignExchange Earnings and Outgo

The particulars as required to be disclosed pursuant to Section217(1)(e) o the Companies Act, 1956, read with the Companies(Disclosure o Particulars in the Report o Board o Directors)Rules, 1988, are given in the Annexure A orming part o thisReport.

Corporate Governance

The Company has adopted the Reliance Group-CorporateGovernance Policies and Code o Conduct which has set outthe systems, processes and policies con orming to internationalstandards. The report on Corporate Governance as stipulatedunder Clause 49 o the listing agreement with the StockExchanges, orms part o this Annual Report.

A Certi cate rom the Auditors o the Company M/s. Chaturvedi& Shah and M/s. Price Waterhouse, con orming compliancewith the conditions o Corporate Governance as stipulated underClause 49, is attached to this Report.


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Directors Report

Acknowledgements

Your Directors would like to express their sincere appreciation or the co-operation and assistance received rom shareholders, bankers,nancial institutions, government authorities, regulatory bodies and other business constituents during the year under review. Your

Directors also wish to place on record their deep sense o appreciation or the commitment displayed by all executives, o cers andsta o the Company, resulting in the success ul per ormance o the Company during the year.

For and on behal o the Board o Directors

Mumbai Anil Dhirubhai Ambani July 3, 2012 Chairman

Annexure A

Conservation o Energy, Technology Absorption and Foreign Exchange Earnings and OutgoIn ormation pursuant to Section 217(1)(e) o the Companies Act, 1956 read with the Companies (Disclosure o Particulars in theReport o the Board o Directors) Rules, 1988, as amended and orming part o the Directors Report or the nancial year endedon March 31, 2012:a. Conservation o Energy: Since the Company has not yet undertaken any manu acturing activity, the particulars with respect to

conservation o energy are not applicable. The Company is making all e orts to conserve energy by monitoring energy costs andperiodically reviews the consumption o energy. It also takes appropriate steps to reduce the consumption through e ciency inusage and timely maintenance / installation / upgradation o energy saving devices.

b. Technology Absorption: The Company continuously makes e orts towards research and developmental activities and has beenconstantly active in harnessing and tapping the latest and best technology in the industry.

c. Foreign Exchange Earnings and Outgo:

Total oreign exchange earnings and outgo or the nancial year is as ollows:a. Total Foreign Exchange earnings : ` 679 lakh (Previous year ` 280 lakh)b. Total Foreign Exchange outgo : ` 5,734 lakh (Previous year ` 3,873 lakh)

Auditors Certifcate on Corporate Governance

ToThe Members o Reliance Power Limited

We have examined the compliance o the conditions o Corporate Governance by Reliance Power Limited (the Company), or theyear ended March 31, 2012, as stipulated in Clause 49 o the Listing Agreements o the Company with the stock exchanges in India.

The compliance o conditions o Corporate Governance is the responsibility o the Companys management. Our examination wascarried out in accordance with the Guidance Note on Certi cation o Corporate Governance (as stipulated in Clause 49 o the ListingAgreement), issued by the Institute o Chartered Accountants o India and was limited to procedures and implementation thereo ,adopted by the Company or ensuring the compliance o the conditions o Corporate Governance. It is neither an audit nor anexpression o opinion on the nancial statements o Company.

In our opinion and to the best o our in ormation and according to the explanation given to us, we certi y that the Company hascomplied with the conditions o Corporate Governance as stipulated o the above mentioned listing agreements.

We urther state that such compliance is neither an assurance as to the uture viability o the Company nor the e ciency ore ectiveness with which the management has conducted the a airs o the Company.

For Price WaterhouseChartered Accountants Firm Regn. No: 301112 E

For Chaturvedi & ShahChartered Accountants Firm Regn. No: 101720 W

Partha Ghosh PartnerMembership No. 55913

Date : July 3, 2012Place : Mumbai

C D Lala PartnerMembership No. 35671

Date : July 3, 2012Place : Bengaluru


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Reliance Power LimitedManagement Discussion and Analysis

Forward looking statements Statements in this Management Discussion and Analysis o Financial Condition and Results o Operations o the Company describing the Companys objectives, expectations or predictionsmay be orward looking within the meaning o applicable

securities laws and regulations. Forward looking statements arebased on certain assumptions and expectations o uture events.The Company cannot guarantee that these assumptions andexpectations are accurate or will be realized. The Company assumes no responsibility to publicly amend, modi y or revise

orward-looking statements, on the basis o any subsequent developments, in ormation or events. Actual results may di er materially rom those expressed in the statement. Important

actors that could in uence the Companys operations includecost o uel, determination o tari and such other chargesand levies by the regulatory authority, changes in government regulations, tax laws, economic developments within the Country and such other actors.The fnancial statements are prepared under historical cost convention, on accrual basis o accounting, and in accordancewith the provisions o the Companies Act, 1956 (the Act) andcomply with the accounting standards notifed under Section211 (3C) o the Act read with Companies (Accounting Standards)Rules, 2006. The management o Reliance Power Limited(Reliance Power or the Company) has used estimates and

judgments relating to the fnancial statements on a prudent andreasonable basis, in order that the fnancial statements re ect ina true and air manner, the state o a airs and proft or the year.The ollowing discussions on our fnancial condition and result o operations should be read together with our audited consolidated

fnancial statements and the notes to these statements includedin the Annual Report.

Unless otherwise specifed or the context otherwise requires, allre erences herein to we, us, our, the Company, Relianceor Reliance Power are to Reliance Power Limited and/or its

subsidiary Companies.Economic OutlookIndias economic growth has slowed to 6.5 per cent in 2011-12 mainly due to weakening industrial growth a ected by anuncertain global environment. With agriculture and service sectorscontinuing to per orm well, the slowdown can be attributedalmost entirely to the continuous weakening o industrial growth.The service sector continues to be a star per ormer as its sharein GDP has climbed rom 58 per cent in 2010-11 to 59 percent in 2011-12 with a growth rate o 9.4 per cent. Similarly,agriculture and allied sectors are also estimated to achieve agrowth rate o 2.5 per cent in 2011-12.The global economic and nancial crisis has had a dampeninge ect on cross border FDI fows and in order to maintain earlierlevels o oreign investment and attract more, it is imperative toenhance Indias competitiveness.Monetary policy continued to be tightened by the Reserve Banko India (RBI) to curb infation which had a lagged impact andinfation ell towards the end o the year. Growth and investmentswere also a ected by global developments, including the Greekand Euro zone debt crisis, and the continuous political turmoilin the Middle East leading to high crude oil prices and de-ratingo the US economy by the rating agencies. As the scal yeardrew to a close, the economic environment showed distinctsigns o improvement with infation starting to all in line with

the projected trajectory. The government is also expected toundertake necessary monetary policy initiatives required toboost growth and investments. The macroeconomic outlook orthe scal year 2012-13 looks positive with modest recovery inGDP growth rate to 7.3 per cent rom 6.9 per cent in 2011-12.

Power SectorE cient in rastructure is a pre-requisite or sustainable andinclusive economic growth and it holds the key to globalcompetitiveness o the Indian economy. The direct co-relation between electricity and economic growth is widelyacknowledged. India needs power to grow and or that reasonthe sector presents a massive opportunity.The private sector has underscored its central role in sustainingpower sector investments, with over 50 per cent o the capacityaddition in the 11th ve-year plan by the private sector. TheElectricity Re orms which started in the 1990s, and took greatershape with the Electricity Act 2003, have been able to attractprivate independent power producers and accelerated capacityaddition. However, the biggest challenge acing the power sectoris uel availability and pricing. This requires immediate attentiono the government and there are clear indications that theadministration is seized o the matter. The other area o hugeconcern or the power sector is distribution re orms, which arecritical or the sector to gather and maintain growth momentum.Again, there is growing realization in the government thatdistribution re orms cannot be delayed any urther. The V.S.Shunglu committee has recommended pragmatic ways o reviving electricity distribution Companies by passing the onus o repaying loans to respective state governments, instructing thestates to ramp up transmission and distribution e ciency and oran allotment o distribution areas on a ranchisee basis.Installed generation capacity

The total installed power generation capacity o India as onMarch 31, 2012 was 199,877 MW o which over 27 per centis contributed by the private sector.Sector wise generation capacity (in MW) as on March 31, 2012*

Sector - wise genera on capacity as on 31st March 2012

59,683,30%

85,919,43%

54,276,27%

STATE

PRIVATE

CENTRAL

* Excluding captive generation capacity connected to grid Source: CEA

India added generation capacity o 26,251 MW in FY11-12, an85 per cent increase over the capacity addition in FY10-11. Theprivate sector was the biggest contributor accounting or over 67per cent o the total capacity added in FY11-12.Sector wise generation capacity added (in MW) in FY 11-12*

5,270,20%

Sector - wise genera on capacity addi on in 2011-12

3,466,13%

17,515,67%

STATE

PRIVATE

CENTRAL

* Excluding captive generation capacity Source: CEA


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15


India has been traditionally dependent on thermal power as asource o power generation, which constitutes about 66 percent o the current capacity. The balance is contributed byhydroelectric power (20 per cent), nuclear (2 per cent), andrenewable energy (12 per cent).

Fuel wise generation capacity (in MW) as on 31st March2012*

Fuel InstalledCapacity (MW)Share o installed

capacity as %Thermal 131,603 65.8

Coal 112,022 56.0Gas 18,381 9.2Diesel 1,200 0.6

Hydroelectric 38,990 19.5Nuclear 4,780 2.4Renewable energy 24,503 12.3

Total 199,877 100.0* Excluding captive generation capacity connected to grid

Source: CEA

Fuel wise generation capacity added (in MW) in FY2011-12

Fuel-wise genera on capacity addi on in 2011-12

6,049,23%

0,0%

1,423,5%

18,779,72%

Thermal

Hydro

Nuclear

Renewable

* Excluding captive generation capacity Source: CEA

With over two-third o the capacity added last year coming romcoal based projects and with the capacities under constructionbiased towards coal based projects, India is expected to remainreliant on coal or achieving its power needs. Consequently,shortage o coal represents the biggest impediment or powergeneration in India.

Generation capacity addition plans

The Government o India had set an ambitious target o adding

78,700 MW* in the Eleventh Five Year Plan period (FY07-12). As part o a mid-term appraisal, the Planning Commission,reduced the target to 62,374 MW. In the end, a capacity o 50,805 MW was added, translating to an over 80 per cent targetbeing achieved. While it is true that even the revised target wasnot met, the capacity addition during the Eleventh Plan was twoand-a-hal times more than what was achieved in the TenthPlan, representing a dynamic phase or the Countrys powersector on the back o increased private sector participation.

*Excluding renewable and captive generation capacity

Power generation

The total power generation in India during FY11-12 was 876.9billion units (8.1 per cent higher than FY10-11) and was 2.6 percent higher than the target estimates set or FY11-12.

Sector wise power generation per ormance in FY2011-12

Sector Powergeneration

(billionunits)

Percentageshare

Percentageo installed

capacityas %

AveragePLF

(thermal)as %

State sector 368.0 42.0 47.0 68.00Central sector 364.0 41.5 34.0 82.12Private sector 139.6 15.9 19.0 76.19Imported 5.3 0.6 - -Total 876.9 100 100 73.32

Source: CEA

Fuel wise power generation per ormance in FY2011-12

FuelPower

generated(MU)

Share ingeneration

as %

Share ingeneration

capacity as %Thermal 708.4 80.8 75.0Hydroelectric 130.4 14.9 22.2Nuclear 32.3 3.7 2.7Imported 5.3 0.6 0Total 876 100 100

Source: CEA

5.28,0%

130.43,15%

32.27,4%

708.45,81%

Thermal

Nuclear

Hydro

Imported

Power Sector Outlook

Demand and supply outlook

India aces a crippling power crisis. The energy de cit inFY11-12 was 8.5 per cent and the peak power de cit was10.6 per cent indicating a huge gap between demand andsupply o electricity. Worryingly, de cits have gone up this

scal a ter alling the previous two years. The ollowing tablehighlights the de cit situation in the last ew years:

Power defcit scenario - all India in the period FY 05-12(in %)18

16

14

12

10

8

6

4

2

0

11.7 12.313.8

16.6

11.913.3

10.3 10.6

7.38.4

9.6 9.911.1

10.1

7.58.5

FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12

Peak Defcit Energy Defcit

Source: CEA


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Long term demand and supply outlook

According to the Ministry o Power, Indias power generationhas to grow ve times its current capacity to deliver asustained GDP growth o 8 per cent till FY31-32. Thisimplies a compound annual growth rate (CAGR) o 8.2 percent over 20 years and an average capacity addition o over38,000 MW every year, nearly three times the capacityaddition rate in the XI th Five Year Plan.

Opportunities and threats

In the past decade, the government has taken various initiativesto increase public as well as private investments in the sectorto enhance generation capacity and eliminate power de cit.A ter enacting the Electricity Act in 2003, the governmenthas ollowed up on the re orm agenda with many other policymeasures to make power generation attractive or investors. TheElectricity Act, 2003, requires the Central Electricity Authority(CEA) to lay out the National Electricity Plan once every ve years,revising it rom time to time in accordance with the NationalElectricity Policy. This Plan serves as a roadmap or acceleratedgrowth o the power sector. Now 100 per cent Foreign DirectInvestment (FDI) is allowed in generation, transmission anddistribution segments. These policy initiatives have resulted inbuilding up investor con dence in the power sector and increasedparticipation by the private sector.

In order to attract urther private participation in the powersector, the Government o India had announced the Ultra MegaPower Projects (UMPP) scheme under which the governmentwould partner with the private sector or developing large powerprojects. The policy ramework or the power sector encouragesdevelopers to put up power projects to sell power through longterm Power Purchase Agreements (PPAs) at attractive and

sustainable returns, and also to sell power through short termcontracts (bilateral contracts) or spot markets (unscheduledinterchange, power exchanges).

India needs to substantially bridge the gap between demandand supply o electricity or sustained economic growth and tokindle hope in the lives o its people and to accomplish thatthe Country needs all sources o power it can get access to.Clean energy rom renewable sources, apart rom being anenvironmentally riendly source o power, can also contribute toIndias power needs. The potential or generating energy romrenewable sources in India is enormous. This potential is currentlyestimated at 48,500 MW or wind energy and 25,000 MW orsolar. Besides, hydroelectric capacity is estimated at 148,700MW, o which so ar only 25 per cent has become operational.

Indias renewable energy capacity has gone up rom 7,761 MW2007 to 24,503 MW now-growth o over 200 per cent in just

ve years. With uel shortage staring India in the ace, it hasbecome imperative or the Country to have a ocused strategy

or renewable energy. The government has initiated steps in thisdirection, including:

Policy envisaging that all states should mandatorily meetRenewable Purchase Obligations (RPO) o 5 per cent o total generation.Launch o Jawaharlal Nehru National Solar Mission (JNNSM),which aims to ensure that solar energy technologies inthe Country achieve grid parity by 2022. It has plans ordeployment o 20 GW o solar power by 2022.

Imposition o carbon cess o Rs. 50 per tonne or alldomestic and imported coal based projects. The undsraised will be utilised to drive development in the renewableenergy sector.Created a ramework or issuance and trading o Renewable

Energy Certi cates (RECs) which will allow generators o renewable energy to obtain additional revenues by sellingthese certi cates to the distribution Companies

With increasing ocus on environment related issues, powerprojects employing clean and environment- riendly technology(hydroelectric and other renewable energy sources) are alsoearning carbon credits, which are traded extensively in theinternational market; thus providing generation Companies anadditional source o revenue.

Key risks and concerns

Power sector is a highly capital intensive business with longgestation periods be ore commencement o revenue streams

(development and construction period o 7-8 years) and aneven longer operating period (over 25 years). Since most o theprojects have such a long time rame, there are some inherentrisks in both the internal and external environment. The Companymonitors the external environment and manages its internalenvironment to mitigate the concerns on a continuous basis.Some o the key concerns being aced by the sector currentlyare:

1. Coal supply position

More than 50 per cent o Indias generation capacity iscoal based. According to the Integrated Energy Policy, byFY31-32, India would require 2,040 million tonnes o coal or power generation, more than ve times its current

consumption levels. The shortage o coal is so acute thatmost o the power generation Companies are looking atimported coal as a viable alternative to domestic coal.

The total imported non coking coal quantity has increasedmore than three times within the last ve years and isexpected to go up at a much aster rate due to the shortagein domestic coal availability. The increase in the prices o imported coal is a matter o serious concern and there is anurgent need to undertake a review o the mechanism orpassing on the increasing coal costs to end-consumers.

Realising this, the government has recently announced somepolicy changes and initiatives in coal mining. Currently coalblocks are awarded to private sector Companies through a

Screening Committee. The government has amended theMines and Minerals (Development and Regulation) Act,1957, so that the allocation process by the ScreeningCommittee is replaced by a transparent bidding process.

2. Gas availability position

Natural gas production in the Country has been allingcontinuously over the last two years primarily due to the

all in production rom KG-D6 rom a high o over 60mmscmd in 2010 to less than 30 mmscmd in 2012.This has not only resulted in a signi cant decrease in theoperating per ormance o existing gas based power plantsin the Country but may also impact the per ormance o upcoming gas based power capacities. High capacity

addition o gas based power projects in the last ew years


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may lead to a large number o stranded assets unless apooling mechanism is implemented by the government.

3. Weak fnancial condition o electricity distributionCompanies

The nancial health o electricity distribution Companies(discoms) is an area o major concern threatening the veryviability o the power sector. The inability o discoms togenerate adequate resources is a ecting their ability tomake capital investment, borrow unds at competitive ratesand make timely payments. Book losses o the utilitiesare rising with increasing power purchase costs withoutcommensurate increase in tari s. Further, the AggregateTechnical and Commercial (AT&C) losses o the utilitiesare still at very high levels. The average o the AT&C lossesreported by Indian distribution utilities is almost 30 percent. AT&C losses in Indian utilities vary rom one state toanother. The cumulative losses incurred by the distributionCompanies is projected to rise to Rs. 116,089 crore by FY

2014-15 assuming 2008 tari level with no increases,according to a Mercados study or the 13 th FinanceCommission. In its report on discoms, Power FinanceCorporation says that 35 out o the 39 utilities studied wereincurring losses, and net worth o 22 utilities was ound tobe negative. Thus, it is imperative that regular tari hikesare allowed, in line with the increase in costs with suitableincentives or improvement in their operational e ciencies.

4. Execution risk

Power projects are highly capital intensive and have a longdevelopment and construction phase thus exposing themto various macroeconomic as well as project speci c risks.During the development phase, a project aces the ollowing

key risks: Delays in statutory approvals and clearances rom the

authorities Delays in land acquisition Non-availability or delays in obtaining uel, water and

transmission linkages Availability and cost o capital - both equity and debt

unding

During the construction stage which covers the period romthe commencement o construction till the commissioningo projects, the key risks that need to be monitored are:

Delays leading to time over-runs

Increase in project costs leading to cost over-runs Challenges in transportation/logistics o equipment Hydrological and geological risks in case o hydroelectric

projects

During the construction phase, ensuring that all the supplyand erection contracts are placed on time and withinthe cost estimates is a critical challenge and therea terensuring that all the vendors and contractors per orm theirresponsibilities as envisaged is a key risk.

Internal control systems and their adequacy

The Company has put in place internal control systems andprocesses commensurate with its size and scale o operations. AnEnterprise Resource Planning System developed by SAP has been

implemented in the Company. The system has control processesdesigned to take care o various control and audit requirements.In addition, the Company has an Internal Audit unction, whichoversees the implementation and adherence to various systemsand processes and preparation o Financial Statements as perGenerally Accepted Principles and Practices. Further, the internalaudit group also appoints reputed audit rms to undertake theexercise o Internal Audit at various locations. The report o theInternal Auditors is placed at the Audit Committee Meetings o the Board.

Reliance Power has put in place a Risk Management Framework,both at the corporate as well as at the project level, whichprovides a process o identi ying, assessing, monitoring, reportingand mitigating various risks at all levels at periodic intervals. Underthe ramework the Company has constituted a Risk ManagementCommittee at both the Corporate Level as well as Project Level tocontinuously monitor, report and mitigate various risks aced. Theoutcome o this monitoring is reported to the Audit Committeeand to the Board o Directors on a quarterly basis.

Discussion on Operations o the Company

The Company is in the business o setting up and operatingpower projects and in the development o coal mines associatedwith such projects. The Company has identi ed a large port olioo power projects and is also developing coal mines. ReliancePowers vision is to become one o the largest integrated powergeneration and coal mining Companies in the world. O thepower projects which the Company is developing, 1,540 MWis already operational while the other power projects are undervarious stages o development.

1. Operational projects i. Rosa Phase 1, a 600 MW coal-based power project

in Uttar PradeshThe 600 MW power plant continued to operate at highoperational and nancial e ciency. For the nancialyear 2011-12, the plant generated 4,233 million unitso electricity, generated revenue o Rs 1,931 croreand net pro t o Rs 339 crore. To ensure continuede cient operations at the plant, the Company hasinstalled world class Operations and Maintenance(O&M) systems. There is a strong O&M team at thesite supported by an experienced O&M team at thecorporate o ce. A training simulator which is a replicao unit distributed control system has been set up atRosa or training operation sta at regular requency.

Employees are provided in house training as well asspecialised training by the equipment manu acturer.

The Company has installed a centralised feet wideoptimisation and per ormance management center

or monitoring, optimising and condition monitoringo assets across the power stations. Latest reliabilitycentred maintenance techniques have been employedin Rosa which gives the project signi cant bene ts interms o diagnostics and preventive maintenance andreduction o outages.

ii. Rosa Phase 2, a 600 MW coal-based power projectin Uttar Pradesh

The year 2012 saw the success ul commissioningo the second phase o 600 MW o the Rosa power


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18


project, our months ahead o schedule, resulting ina total capacity o 1,200 MW. The entire capacity isbeing sold to Uttar Pradesh on a regulated tari basisand it is expected to provide electricity su cient or 30lakh households, thus acting as a signi cant catalyst orthe economic development o Indias largest state

iii. Solar Photovoltaic (PV), a 40 MW solar powerproject in Rajasthan

In line with its vision and commitment to becomeIndias largest clean, energy Company, the Companysuccess ully commissioned Indias largest solarphotovoltaic project, a 40 MW project in Rajasthan inMarch 2012. The project was built in a record timeo just 129 days and will displace more than 60,000metric tonnes o carbon dioxide emissions per year.This is the equivalent o taking 25,000 cars o theroad.

iv. Butibori, a 600 MW coal-based power project inMaharashtra

Vidarbha Industries Power Limited (VIPL), is currentlydeveloping a 600 MW coal-based power project (twounits o 300 MW each) with subcritical technologylocated at Butibori, Maharashtra Industrial DevelopmentCorporation (MIDC) in Nagpur, Maharashtra. The rst300 MW unit has been success ully synchronized andthe power plant is expected to be ully commissionedin 2012.

2. Projects under development and execution

Reliance Power is developing a number o large and mediumsized power projects making it one o the largest port olios

o power generation assets under development in India.These power projects are planned to be diverse ingeographic location, uel type, uel source and o -take, andeach project is planned to be strategically located near anavailable uel supply or load center. The Company intendsto sell the power generated rom these projects under acombination o long-term and short-term PPAs to state-owned and private distribution companies and industrialconsumers.

A brie on the developments on these projects ollows.

Coal-based Projects

i. Sasan Ultra Mega Power Project, a 3,960 MWpithead coal-based Project in Madhya Pradesh

The project is being developed by Sasan PowerLimited (SPL), a wholly owned subsidiary o ReliancePower. Reliance Power was awarded the Sasan project

ollowing an international competitive bidding processand the project will be selling power to 14 Procurerscomprising seven states. The project will use coal romthe captive coal blocks allocated or the project. Thecommissioning o the units at Sasan would commencein the nancial year 2012-13. The constructionactivities at the project are progressing as per plans.The Company has also made signi cant progress in thedevelopment o coal mines allocated or the Sasan

project. Coal production rom the mines is expected to

commence be ore the commissioning o the rst unito Sasan UMPP.

ii. Krishnapatnam Ultra Mega Power Project, a 3,960MW imported coal-based Project in Andhra Pradesh

Coastal Andhra Power Limited (CAPL), a wholly ownedsubsidiary o the Company is developing the project.Reliance Power was awarded the Krishnapatnamproject ollowing an International Competitive Biddingprocess and it will be selling power to 11 Procurerscomprising our states. However, the project is acingissues relating to change in regulations in Indonesiaand the Company had issued notice to the procurers

or an amicable resolution o the issues under thePower Purchase Agreement (PPA). Since the procurersdid not respond to the notice or dispute resolution, theCompany has led a statement o claim in the IndianCouncil o Arbitration under the Indian Arbitration andConciliation Act 1996. The procurers on the other

hand have initiated the process or terminating the PPAagainst which the Company is pursuing its appeal in theDelhi High court and the matter is sub-judice.

iii. 3,960 MW coal-based power project in MadhyaPradesh

Chitrangi Power Private Limited (CPPL), a wholly ownedsubsidiary o Reliance Power, has plans to developa 3,960 MW coal-based power project at MadhyaPradesh. The coal required or the project is likely tobe sourced rom the captive coal mines allocated toReliance Power. The Company intends to sell the powerthrough long term contracts.

iv. Tilaiya Ultra Mega Power Project, a 3,960 MWpithead coal-based power project in Jharkhand

Jharkhand Integrated Power Limited (JIPL), a whollyowned subsidiary o Reliance Power is developing theTilaiya Ultra Mega Power Project at Hazaribagh Districtin Jharkhand. The project was awarded to ReliancePower under international competitive bidding processand will be selling power to 18 procurers rom tenstates in Northern, Western and Eastern India. Theproject would be using coal rom the captive coal mineblocks awarded along with the project.

Gas Based Power Projects

v. Samalkot Power Project, a 2,400 MW gas basedproject, in Andhra PradeshThe Company is implementing, Indias largest gasbased power project, the 2,400 MW Samalkot project,in Andhra Pradesh and the project is awaiting allocationo gas rom the government or generating power.

Hydroelectric Power Projects

The Company is developing various hydroelectric powerprojects located in Arunachal Pradesh, Himachal Pradeshand Uttarakhand. These projects are in di erent stageso development. Hydroelectric power projects by naturehave long gestation periods and require clearances romvarious authorities be ore commencement o construction

activities. Some o these projects have achieved various


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milestones and are likely to be developed in the next ewyears. The 700 MW Tato II power project in ArunachalPradesh has received the Techno- Economic Clearance romthe Central Electricity Authority.

Renewable Power Projects

The Company has plans to have a port olio o projectswhich are based on renewable energy such as Wind andSolar. Rajasthan Sun Technique Energy Private Limited(RSTEPL), a wholly-owned subsidiary, is developing a 100MW Concentrated Solar Power project (CSP) in Jaisalmer,Rajasthan. Solar power generated rom this plant will besold to NTPC Vidyut Vyapar Nigam (NVVN). The projectis scheduled or commissioning in 2013. Reliance CleanPower Private Limited, another subsidiary, is developing a45 MW wind arm in Maharashtra which is expected to becommissioned in 2012.

Coal Mines

The Company has been allocated coal mines in India alongwith the Ultra Mega Power Projects. The Company hasprepared mine plans or taking out coal rom these minesand the mine plans have been approved by the Ministry o Coal or producing up to 65 MTPA. The Company has alsoacquired coal mine concessions in Indonesia or which it is

nalising plans to produce up to 30 MTPA. The developmento the mines are in di erent stages and are linked to theschedule o the projects or which the coal would be used.

Coal Bed Methane (CBM) Blocks

The Company has stakes in our Coal Bed Methane (CBM)blocks and one oil and gas block. Drilling work has beencompleted in one o the CBM blocks while exploratory work

is in progress in all the blocks.Clean Development Mechanism (CDM)

Clean Development Mechanism (CDM) is one o the threemarket based mechanisms agreed under the Kyoto Protocolto reduce Greenhouse Gases (GHG). CDM encouragesproject developers, in the developing countries, to adoptenvironmental riendly technologies and/or uels so thatthe GHG emissions can be reduced. Such reduced GHGemissions will enable the developers o those projects togenerate Certi ed Emission Reductions (CERs). Such a moveallows developing countries to implement GHG emissionreduction projects in a manner that they assist developedcountries to meet their GHG limitation targets in a cost-e ective manner.The Company has success ully registered all its three UltraMega Power Projects (UMPPs) with the CDM ExecutiveBoard. The three UMPPs would together generateapproximately 55 million CERs in the rst ten years o theirrespective operations.

Health, sa ety and environment

The Company attaches utmost importance to sa ety standardsat all its installations. Necessary steps are regularly undertakento ensure the sa ety o employees and equipment. Both externaland internal sa ety audits are regularly conducted. Mock drillsare conducted to gauge emergency and crisis management

preparedness. The Board has also constituted a committee

comprising o Independent Directors to have oversight on theseissues and to monitor and report to the Board actions beingtaken in this regard.

Human Resources

The Company has been building up its human resources or theimplementation o its large power capacity addition program.The Company has over 1,200 pro essionals. Teams have beenput in place both at the Corporate O ce and in all the projectlocations. The Company has adopted a strategy o putting seniorand experienced (in the power sector) pro essionals as ProjectLeaders and Functional Heads and teams are being built aroundthem. Considering the act that many o the power projects arelocated in remote areas, suitable compensation schemes as wellas acilities or townships with education and medical acilitiesare being planned. The Company also has a Graduate EngineerTrainee Program under which Graduate Engineers are recruitedand trained or working in Power Plants. These GraduateEngineers are recruited through a national level competition

o ering opportunities to all the meritorious candidates across thecountry. The selection process involves online screening o thecandidates ollowed by group discussion and personal Interviews.The Company is planning to have simulators at various projectlocations where operational training services can be provided.

Discussion on Financial Condition and Financial Per ormance

Financial Condition

Reliance Power is the Holding Company with the ollowingsubsidiary companies which have developed/are developingvarious power projects.

Company Project

Rosa Power Supply CompanyLimited Rosa Stage I andStage IIVidarbha Industries Power Limited ButiboriSasan Power Limited Sasan UMPPCoastal Andhra Power Limited Krishnapatnam UMPPChitrangi Power Private Limited Chitrangi

Jharkhand Integrated Power Limited Tilaiya UMPPSiyom Hydro Power Private Limited SiyomUrthing Sobla Hydro Power PrivateLimited

Urthing Sobla

Tato Hydro Power Private Limited Tato II

Kalai Power Private Limited Kalai IIAmulin Hydro Power Private Limited AmulinEmini Hydro Power Private Limited EminiMihundon Hydro Power PrivateLimited

Mihundon

Samalkot Power Limited SamalkotRajasthan Sun Technique EnergyPrivate Limited

Solar CSP

Dahanu Solar Power Private Limited Solar PVReliance Clean Power PrivateLimited

Wind Power


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An extract o the Consolidated Balance Sheet is placed below:

Rupees in LakhsParticulars 2011-12 2010-11Shareholders' Fund 1,757,112 1,683,344

Long Term Borrowings 1,426,271 552,526Other Non Current Liabilities 387,257 39,669Current Liabilities 355,254 313,596Total 3,925,894 2,589,135Fixed Assets 2,836,902 913,473Other Non Current Assets 519,088 872,643Current Investments 141,046 465,599Other Current Assets 428,858 337,420Total 3,925,894 2,589,135

Long term borrowings have increased to ` 14,262.71 crore rom ` 5,525.26 crore.

Fixed assets have increased to ` 28,369.02 crore rom ` 9,134.37 crore.

Current investments were at ` 1,410.46 crore in FY12 end ascompared to ` 4,655.99 crore in FY11 end.

Financial Per ormanceAn extract o the Consolidated Pro t and Loss Account Statementis placed below:Particulars 2011-12 2010-11IncomeSale o energy 195,839 102,368Income rom Other Operations 6,082 3,108Dividend Income 16,663 19,095Pro t on redemption o MFs 19,780 53,149Miscellaneous Income 38,314 14,083Total 276,678 191,803ExpenditureCost o Fuel 112,854 55,965Other Operating Expenditure 4,537 2,324Employee Bene ts Expenses 5,961 7,690General, Administration & OtherExpenses 16,180 16,595Depreciation / Amortization 12,145 10,088Finance Cost 29,762 21,952Total 181,439 114,614PBT 95,239 77,189Taxes 8,561 1,145PAT 86,678 76,044EPS (Rupees) (basic and diluted) 3.09 2.94

Corporate Governance Report

Our corporate governance philosophy

Reliance Power ollows the highest standards o corporategovernance principles and best practices by adopting theReliance Group Corporate Governance Policies and Codeo Conduct as is the norm or all constituent companiesin the group. These policies prescribe a set o systems andprocesses guided by the core principles o transparency,disclosure, accountability, compliances, ethical conduct and thecommitment to promote the interests o all stakeholders. Thepolicies and the code are reviewed periodically to ensure theircontinuing relevance, e ectiveness and responsiveness to theneeds o our stakeholders.

Governance practices beyond regulatory requirementsOur governance practices go beyond the mere letter o statutoryand regulatory requirements. With this in mind, we have

ormulated a number o policy documents and introduced theollowing set o governance practices:

A. Values and commitmentsWe have set out and adopted policy documents on valuesand commitments o Reliance Power. We believe that anybusiness conduct can be ethical only when it rests on thenine core values viz. honesty, integrity, respect, airness,purpose ulness, trust, responsibility, citizenship and caring.

B. Code o ethicsOur policy document on code o ethics demands that ouremployees conduct the business with impeccable integrityand by excluding any consideration o personal pro t or

advantage.

C. Business policies

Our Business Policies cover a comprehensive range o issuessuch as air market practices, insider in ormation, nancialrecords and accounting integrity, external communication,work ethics, personal conduct, policy on prevention o sexual harassment, health, sa ety. environment and quality.

D. Separation o the Boards supervisory role rom theexecutive managementIn line with the best global practices, we have adopted thepolicy o separating the Boards supervisory role rom theexecutive management. We have also split the o ces o Chairman and the Chie Executive O cer.

E. Prohibition o insider trading policyThis document contains the policy on prohibiting tradingin the equity shares o the Company, based on inside orprivileged in ormation.

F. Policy on prevention o sexual harassmentOur policy on prevention o sexual harassment aims atpromoting a productive work environment and protectsindividual rights against sexual harassment.

G. Whistle Blower policyOur Whistle Blower policy encourages disclosure in good

aith o any wrong ul conduct on a matter o generalconcern and protects the whistle blower rom any adversepersonnel action.

H. Environment policy

The Company is committed to achieving excellence in



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environmental per ormance, preservation and promotion o clean environment. These are o undamental concern in allour business activities. A dedicated Committee o the Boardcomprising o majority o Independent Directors was set upin the last year to address environmental aspects, health,sa ety, security, rehabilitation and resettlement o personsa ected by the Companys projects. As a voluntary initiative,the above is indicative o the Companys commitment as aresponsible corporate citizen to promote a clean and greenenvironment and discharge its responsibilities to the Society.

I. Risk managementOur risk management procedures ensure that themanagement controls various business related risks throughmeans o a properly de ned ramework.

J. Boardroom practices

i. ChairmanIn line with the highest global standards o corporategovernance, the Board has delinked the Chairmansrole rom that o an executive in managing day-to-day business a airs.

ii. Board charterThe Board o Directors has adopted a comprehensivecharter, which sets out clear and transparent guidelineson matters relating to the composition o the Board,the scope and unctions o various Board committees,etc.

iii. Board committeesThe Board has, inter alia , constituted the AuditCommittee, Nomination/Remuneration Committee,Shareholders/Investors Grievance Committee and

Environment, Health, Sa ety, Security, Rehabilitationand Resettlement Committee. The Board rotates theChairmen o these Committees.

iv. Tenure o independent DirectorTenure o independent Directors on the Board o theCompany shall not extend beyond nine years, subjectto their re-appointment on retirement by rotation asper statutory provisions.

v. Independent Directors interaction with shareholdersMember(s) o the Shareholders / Investors GrievanceCommittee interact with shareholders on theirsuggestions and queries, i any, which are orwarded tothe Company Secretary.

vi. Lead independent DirectorRecognizing the need or a representative andspokesperson or the independent Directors, the boardhas appointed an independent Director as the leadindependent Director.The lead independent Director per orms the ollowingroles, in addition to playing the role o a non-executiveindependent Director:a. presides over all executive sessions o the Boards

independent Directors;b. works closely with the Chairman to nalise the

in ormation fow, meeting agendas and meeting

schedules;

Corporate Governance Report

c. liaises between the Chairman and the independentDirectors on the Board; and

d. takes a lead role along with the Chairman, in theBoard evaluation process.

Dr. Yogendra Narain is the lead independent Directoras designated by the Board. The position o the leadindependent Director is rotated.

vii. Training o Board MembersThe Board members are periodically given ormalorientation and training with respect to the Companysvision, strategic direction, core values including ethics,corporate governance practices, nancial mattersand business operations. The Directors are acilitatedto get amiliar with the Companys unctions at theoperational levels. Periodic presentations are made atthe Board

Documents

RPower Report