JSW ENERGY LIMITED
ANNUAL REPORT 2011-2012
To the Shareholders,
Your Directors are pleased to present the Eighteenth Annual Report and the
Audited accounts of the Company for the year ended 31st March, 2012.
1. FINANCIAL RESULTS
The financial performance of the Company for the year ended 31st March,
2012 is summarized below:
Particulars Standalone Consolidated
2011-12 2010-11 2011-12 2010-11
Sales and Other Income 5,130.44 3,981.15 6,265.44 4,427.54
Profit before Interest, 1,328.24 1,641.98 1,594.39 1,697.23
Depreciation, Tax and
Interest and Finance 508.16 341.00 717.24 432.53
Depreciation 377.22 211.61 503.34 266.80
Exceptional items 151.61 - 161.27 -
Profit before Tax 291.25 1,089.37 212.54 997.90
Provision for Tax 56.61 203.76 41.91 156.15
Profit after Tax before 234.64 885.61 170.63 841.75
Share of Profit/(Loss) of - - 0.58 (0.07)
Profit after Tax 234.64 885.61 170.05 841.82
Add: Profit brought 1,717.85 1,204.43 1,338.12 869.39
forward from previous
Profit available for 1,952.49 2,090.04 1,508.17 1,711.21
Debenture Redemption 139.48 181.57 139.48 181.57
Contingency Reserve - - 0.96 0.90
Dividend 82.00 164.01 82.00 164.01
Dividend Distribution Tax 13.30 26.61 13.30 26.61
Balance Carried to Balance 1,717.71 1,717.85 1,272.43 1,338.12
2. FINANCIAL PERFORMANCE
* The total revenue of the Company for fiscal 2012 stood at Rs. 5,130.44
Crore as against Rs. 3,981.15 Crore for fiscal 2011 showing an increase of
* The EBIDTA (before exceptional items) decreased by 19% from Rs. 1,641.98
Crore in fiscal 2011 to Rs. 1,328.24 Crore in fiscal 2012.
* Profit after Tax declined by 74% from Rs. 885.61 Crore in fiscal 2011 to
Rs. 234.64 Crore in fiscal 2012.
* The net worth of the Company increased to Rs. 6,158.72 Crore at the end
of fiscal 2012 from Rs. 6,025.39 Crore at the end of fiscal 2011.
* The debt gearing of the Company was at 0.87 times as at the end of fiscal
2012 compared to 0.91 times at the end of fiscal 2011.
* The consolidated total revenue of the Company for the fiscal 2012 stood
at Rs. 6,265.44 Crore as against Rs. 4,427.54 Crore for fiscal 2011 showing
an increase of 42%.
* The consolidated EBIDTA (before exceptional items) declined from Rs.
1,697.23 Crore in fiscal 2011 to Rs. 1,594.39 Crore in fiscal 2012 showing
a decrease of 6%.
* The consolidated Profit after tax has also declined from Rs. 841.82 Crore
in fiscal 2011 to Rs. 170.05 Crore in fiscal 2012 showing a decrease of
* The consolidated Net Worth of the Company has increased from Rs. 5,676.48
Crore at the end of fiscal 2011 to Rs. 5,700.07 Crore in fiscal 2012.
* The consolidated debt gearing of the Company is at 1.75 times as at end
of fiscal 2012 compared to 1.70 times in fiscal 2011.
3. CONSOLIDATED FINANCIAL STATEMENTS
The audited Standalone and Consolidated Financial Statements of the
Company, which form part of the Annual Report, have been prepared pursuant
to Clause 41 of the Listing Agreement entered into with the Stock
Exchanges, in accordance with the provisions of the Companies Act, 1956,
the Accounting Standard (AS-21) on Consolidated Financial Statements, the
Accounting Standard (AS-23) on Accounting for Investments in Associates and
Accounting Standard (AS-27) on Financial Reporting of Interests in Joint
Ventures, prescribed by the Companies (Accounting Standards) Rules, 2006.
Your Directors have recommended Dividend of Rs. 0.50/- per share (5%) on
164,00,54,795 Equity Shares of Face Value of Rs. 10 each for FY 2011-2012 [
Rs.1/- per share (10%) in previous year], subject to the approval of the
Members at the ensuing Annual General Meeting. Together with the Dividend
Distribution Tax, the total outflow on account of Equity dividend will be
Rs.95.30 Crore [Rs. 190.62 Crore in previous year].
5. UTILISATION OF IPO PROCEEDS
The Company had come out with an Initial Public Offering (IPO) of Equity
Shares aggregating to Rs. 2,700 Crore and the same were listed on the
Bombay Stock Exchange Limited and the National Stock Exchange of India
Limited. On 28th December, 2010, the Shareholders of the Company had
interalia approved by way of Postal Ballot the utilization of IPO proceeds
for the purposes other than that stated in the Prospectus dated 17th
December, 2009. The IPO proceeds have been fully utilised as on 31st March,
2012 as under:
Sl. Particulars Amount
A. Gross Proceeds Received from IPO 2,700.00
B. Utilisation upto 31st March, 2012 Actual
i. To part finance the construction, development and 2,230.00
commissioning of identified projects aggregating to
2790 MW in capacity, 400 kV Transmission project,
Mining Venture, share issue expenses and general
corporate purpose and for various purposes including
for new projects identified in the States of Karnataka,
West Bengal & Chattisgarh, enhanced cost of the
identified projects, for exploring & pursuing the
opportunities to acquire coal assets, initial
development cost for other strategic projects,
strategic initiatives, partnerships, joint ventures
and acquisitions, equity in foreign company, capital
expenditure of existing plant, repayment of existing
ii. Repayment of Corporate Debt 470.00
Total Utilisation 2,700.00
JSW Energy (Bengal) Limited (JSWEBL)
During the year, your Company divested its entire holding of 74% held in
JSW Energy (Bengal) Limited (JSWEBL) (which was incorporated on 8th
February, 2010 as a SPV between JSW Bengal Steel Limited (JSWBSL) and your
Company with 26% of shareholding held by JSWBSL and 74% by your Company) to
JSWBSL. Thus, JSWEBL ceased to be the subsidiary of the Company.
The details of the Subsidiary Companies are as follows:
a) Raj WestPower Limited (RWPL)
RWPL, a wholly owned subsidiary of the Company, is implementing the 8X135
MW Lignite based Thermal Power Plant in Village Bhadresh, Barmer District,
Rajasthan at a total estimated cost of Rs. 6,865 Crore.
During the year, RWPL commenced commercial operation of its 3rd Unit of 135
MW on 7th November, 2011 and 4th Unit of 135 MW on 4th December, 2011,
thereby increasing its installed capacity to 540 MW. Further, Unit 5 also
achieved Synchronization on oil on 30th March, 2012. The project is now
expected to be fully commissioned in fiscal 2013 in phases.
RWPL had executed Implementation Agreement (IA) with the Government of
Rajasthan on 29th May, 2006 for the implementation, operation and
maintenance of Lignite Mining cum Thermal Power Plant, with associated
facilities, of 8X135 MW Power Plant based on Lignite mined from the Jalipa
and Kapurdi Mines in the Barmer District of Rajasthan.
In accordance with the IA, Barmer Lignite Mining Company Limited (BLMCL)
was incorporated on 19th January, 2007 as a Joint Venture Company between
Rajasthan State Mines & Minerals Limited (RSMML), a Government of Rajasthan
enterprise & RWPL, with equity participation of 51% and 49% respectively to
develop lignite mines in two contiguous blocks viz. Kapurdi and Jalipa in
the district of Barmer for supplying lignite to the mine-head located 1080
MW (8x135 MW) capacity Thermal Power Plant of RWPL. BLMCL will meet the
entire fuel requirement of the Power Plant. Mining lease of Kapurdi mining
block was transferred in favor of BLMCL in October 2011, subsequent to
which BLMCL commenced supply of lignite to RWPL. BLMCL is in the process of
taking possession of the land for the Jalipa Lignite block. BLMCL has also
initiated steps for enhancing the capacity of the Kapurdi Mine to enable it
to supply the lignite required for operating all eight units of the Power
Plant. BLMCL has incurred Rs. 1,223.46 Crore till 31st March, 2012. RWPL
has invested equity of Rs. 9.80 Crore in BLMCL besides providing it
unsecured subordinate debt of Rs. 361.63 Crore as at 31st March, 2012.
During the year, pending fixation of the power tariff & transfer price of
Lignite and due to non availability of tariff based on imported coal, the
Units 1 and 2, which had commenced Commercial operation in November 2009
and October 2010 respectively on imported coal, temporarily suspended
production w.e.f. 23rd April, 2011 and 21st April, 2011 respectively.
Subsequently, after RERC declared the adhoc interim tariff, Units 1 and 2
re-started operations w.e.f 11th October, 2011 using Lignite as fuel.
RWPL achieved Plant Load Factor (PLF) of 77.72% based on operational period
of the plant and has generated 1,641 million units (gross) during the year.
Out of the gross generation, RWPL has sold 1,430 million units to Rajasthan
Distribution Companies (Discoms) and generated revenues of Rs. 534.59 Crore
and loss after tax of Rs. 26.78 Crore on standalone basis and revenues of
Rs. 487.36 Crore and loss after tax of Rs. 70.38 Crore on consolidated
basis during the FY 2011-2012.
RWPL has incurred Rs. 6,394.38 Crore for the project (excluding investment
in BLMCL & towards expansion project) as on 31st March, 2012. Your Company
has invested Rs. 1,726.05 Crore in RWPL (including equity for BLMCL) till
31st March, 2012. Your Company has advanced Rs. 1,139.28 Crore as loan as
at 31st March, 2012.
RWPL has received the in-principle consent for the proposed expansion for
setting up another 2X135 MW Power Plant at the same location. The cost of
this Project was estimated at Rs. 1,350 Crore and was proposed to be
financed with a Debt to Equity ratio of 75:25. RWPL has incurred a cost of
Rs. 61.25 Crore towards the expansion project and the entire amount has
been funded by your Company.
RWPL and BLMCL had filed a tariff petition with RERC and RERC has issued
the order interalia determining the adhoc interim tariff for all the four
units and lignite transfer price on ad-hoc basis for FY 2012-13.
b) JSW Power Trading Company Limited (JSWPTC)
JSWPTC, a wholly owned subsidiary of the Company, is engaged in power
trading activities with a category "I" license, which is the highest Power
Trading license issued by Central Electricity Regulatory Commission (CERC)
to trade in power in whole of India.
During FY 2011-2012, JSWPTC has procured power from the Company and its
associates as well as other suppliers. The Company has achieved total
trading volume of 8,247.30 MUs as against 6,227.10 MUs during the previous
financial year thereby generated total sales turnover of Rs. 3,706.41Crore
with Profit after Tax of Rs. 11.60 Crore. JSWPTC is a member in both the
Power Exchanges namely, India Energy Exchange (IEX) and Power Exchange of
India Limited (PXIL).
JSWPTC has, through its efforts over a period of time, emerged as one of
the leading Power Trading Companies in India. It has been one of the active
members in various Power Committees for discussing and resolving issues
with key regulatory authorities, both at the Central and State level (such
as CEA, CERC, Ministry of Power, RLDC`s, etc.) on behalf of the industry
players. Also JSWPTC represents in the Central Advisory Committee of
c) Jaigad PowerTransco Limited (JPTL)
Your Company had entered into a Joint Venture Agreement with Maharashtra
State Electricity Transmission Company Limited (MSETCL), where your company
has shareholding of 74% and MSETCL has balance 26% equity for development
of Transmission System as an integral part of Intra-state Transmission
System aimed at evacuation of power generated from 1200 MW Ratnagiri Power
Plant and also from other proposed projects in the region.
JPTL was granted Transmission License to establish, maintain and operate
the Transmission System for 25 years by Maharashtra Electricity Regulatory
JPTL is one of the few private players to have entered into development of
Transmission System in the State of Maharashtra under the Public Private
Partnership (PPP) model and has demonstrated exceptional capabilities in
terms of successfully executing and commissioning the Transmission Project
passing through difficult terrain.
The 400kV Double Circuit Quad Jaigad - New Koyna Transmission Line of about
55 route km was commissioned on 7th July, 2010 and the 400kV Double Circuit
Quad Jaigad - Karad Transmission Line of about 110 route km was
commissioned on 2nd December, 2011. With this the entire Transmission
Project has become fully operational. The Transmission Project consisting
of 400kV Double Circuit Quad Jaigad - New Koyna Transmission Line was
completed in a record duration of less than 24 months against the Nation
benchmark of 39 months and 400kV Double Circuit Quad Jaigad - Karad
Transmission Line undertaken by JPTL was completed in less than 39 months
against Nation benchmark of 40 months.
JPTL has incurred Rs. 546.13 Crore on the Project till 31st March, 2012.
Your Company has invested Rs. 101.75 Crore as Equity contribution till 31st
March, 2012. JPTL has generated revenues of Rs. 94.28 Crore and Profit
after tax of Rs. 30.87 Crore during the FY 2011-2012.
The petition for Annual Revenue Requirement (ARR) for the FY 2010-2011 was
approved by Hon`ble MERC on 25th May, 2011. However as MERC had already
issued the tariff order for FY 2010-2011 for other transmission companies
before approval of ARR of JPTL, the cashflows to JPTL will accrue in the
Transmission tariff order for FY 2011-12. The petition for true up of ARR
of FY 2010-2011 and petition for approval of ARR for FY 2011-2012 was filed
This Transmission System is presently evacuating power from 1200 MW
Ratnagiri Power Plant as well as transmitting intra-state power of State
Utilities. JPTL has maintained the availability of Transmission System as
high as 98.11% for the FY 2011-12.
d) JSW Energy (Raigarh) Limited (JERL)
JERL, a wholly owned subsidiary of the Company, was incorporated on 31st
August, 2009 for setting up 1320 MW Power Plant in Raigarh District,
Chhattisgarh based on coal. Total land required for the Project is
approximately 795 acres and major acquisition process is completed.
Environment clearance has been obtained from Ministry of Environment &
Forest. The total Project Cost is estimated at Rs. 6,500 Crore and is
proposed to be financed with a debt equity ratio of 75:25. Your Company has
invested Rs. 93.20 Crore as Equity contribution till 31st March, 2012.
e) JSW Green Energy Limited (JSWGEL)
JSWGEL was incorporated on 12th January, 2011 as a wholly owned subsidiary
of your Company for taking up the business pertaining to Renewable Energy.
Your Company has invested Rs. 0.05 Crore as Equity contribution till 31st
March, 2012 and has advanced Rs. 4.78 Crore as a loan as at 31st March,
f) PT Param Utama Jaya (PTPUJ)
Your Company had acquired controlling interest in FY 2007 in PTPUJ, an
Indonesian Company. PTPUJ is rendering management and technical consultancy
services to Coal Mining Companies in Indonesia.
g) JSW Energy Minerals Mauritius Limited (JEMML)
JEMML was incorporated on 19th April, 2010 in Mauritius as wholly owned
subsidiary of the Company for overseas acquisition of coal assets. It has
downstream equity investment of Rs. 30.69 Crore in JSW Energy Natural
Resources Mauritius Limited (JENRML) and advanced of Rs. 212.73 Crore as
loan as on 31st March, 2012 for acquiring and developing Coal mining assets
in South Africa.
Your Company has equity investment of Rs. 35.55 Crore in JEMML and advanced
Rs. 202.68 Crore as loan as on 31st March, 2012.
h) JSW Energy Natural Resources Mauritius Limited (JENRML)
JENRML was incorporated on 19th April, 2010 in Mauritius as a wholly owned
subsidiary of JEMML for overseas acquisition of coal assets. It has
downstream investment of Rs. 30.48 Crore in equity of JSW Energy Natural
Resources South Africa (PTY) Limited (JSWNRSAL) and advanced Rs. 212.76
Crore as loan as on 31st March, 2012.
i) JSW Energy Natural Resources South Africa (PTY) Limited (JSWNRSAL):
JSWNRSAL has invested an amount of Rs. 48.12 Crore in Equity of Royal
Bafokeng Capital (Proprietary) Limited (RBC) and has also given an advance
of Rs. 6.66 Crore to RBC. Further JSWNRSAL has invested an amount of Rs.
31.52 Crore in Equity of South African Coal Mining Holdings Limited (SACMH)
and advanced Rs. 128.78 Crore as loan to SACMH & its subsidiaries. JSWNRSAL
has invested Rs. 10.47 Crore in Mainsail Trading 55 Proprietary Limited
(Mainsail), an wholly owned subsidiary, as on 31st March, 2012.
j) JSW Energy Natural Resources (BVI) Limited (JENRBL)
JENRBL was incorporated on 3rd December, 2010 in British Virgin Islands as
a wholly owned subsidiary of your Company for achieving the objective of
overseas acquisition of coal assets in Botswana. Your Company had invested
Rs. 3.53 Crore as equity in JENRBL, which has been entirely provided for
during the year, as the acquisition of CIC Energy Corp did not materialise.
k)South African Coal Mining Holdings Limited (SACMH)
Your Company through JSWNRSAL had acquired 49.80% shareholding of Royal
Bafokeng Capital (Proprietary) Limited (RBC), a majority shareholder of
SACMH with 54.06% shareholding. JSWNRSAL has acquired an additional 34.79%
stake in SACMH under the open offer for acquiring the shares of SACMH.
During the year, your Company through JSWNRSAL has acquired the balance
50.20% stake in RBC, upon exercise of the put option by Royal Bafokeng
Ventures Proprietary Limited. It has also acquired through JSWNRSAL the
entire share capital of Mainsail Trading 55 Proprietary Limited (Mainsail)
upon exercise of the put option by RBH Resources Holdings Proprietary
Limited, a subsidiary of Royal Bafokeng Holdings Limited.
Pursuant to the acquisition, the effective shareholding of your Company in
SACMH as at 31st March, 2012 stands at 93.27%.
8. EXEMPTION U/S 212 FOR SUBSIDIARIES
The Company has availed the exemption from attaching a copy of the Balance
Sheet, Profit and Loss Statement, Directors` Report and Auditors` Report of
the subsidiary Companies and other documents required to be attached under
Section 212(1) of the Companies Act, 1956, to the Balance Sheet of the
Company. The said exemption is available vide circular issued by Ministry
of Corporate Affairs dated 8th February, 2011.
Accordingly, the said documents are not being attached with the Balance
Sheet of the Company. A gist of the financial performance of the subsidiary
Companies is contained in the report. The Annual Accounts of the subsidiary
Companies are open for inspection by any Shareholder at the Company`s
Registered Office as also at the Corporate Office and the Company will make
available these documents and the related detailed information upon request
by any Shareholder of the Company or any Shareholder of its subsidiary
Companies who may be interested in obtaining the same.
9. NEW PROJECTS, INITIATIVES AND JOINT VENTURES 240 MW
Kutehr Hydro Project
Your Company is implementing the 240 MW (3X80 MW) run of the river Hydro
Electric Project (HEP) on the upper reaches of river Ravi in district
Chamba of Himachal Pradesh. An Implementation Agreement (IA) is signed with
Himachal Pradesh (HP) Government on 4th March, 2011.
Environment clearance to the project has been accorded by the Ministry of
Environment and Forest (MoEF) on 5th July, 2011 after Forest Stage-I
clearance for diversion of 61.4083 hectares of Forest Land for
implementation of the project on 22nd June, 2011.
Under Section 4 of the Land Acquisition Act, 1894, HP Government has issued
Notification on 16th June, 2011 for acquisition of private land required
for the implementation of the project and the acquisition process is at an
Reputed construction entities, for the construction of the project have
been shortlisted, through International Competitive Bidding (ICB).
The Project is progressing well and your Company has invested Rs. 138 Crore
into the Project upto 31st March, 2012.
660 MW Power Plant at Vijayanagar:
Your Company proposes to expand the capacity at Vijayanagar by setting up
one unit of 660 MW based on super critical technology. Term of Reference
(ToR) has been cleared by Expert Appraisal Committee of Ministry of
Environment and Forest on 4th April, 2011 and soil investigation has been
completed. Further steps have been initiated to obtain necessary consents
to set up and operate the Power Plant. The project is now estimated to cost
Rs. 3,300 Crore and proposed to be financed with a debt equity ratio of
3200 MW Power Plant at Ratnagiri:
Your Company is also considering the development of the 3200 (4X800) MW
super-critical coal-based power plant at Ratnagiri, Maharashtra. The
Environment Clearance for this project is pending on account of the review
being undertaken by Western Ghat Expert Ecology Panel constituted by
Ministry of Environment and Forests.
Your Company has acquired certain portion of the land and also proposes to
acquire/lease further land for this project as may be required / necessary.
The estimated project cost is approximately Rs. 15,000 Crore. Your Company
has invested approximately Rs. 79 Crore on this project as on 31st March,
2012 primarily towards land acquisition.
1620 MW - Coal based Thermal Power Plant at Jharkhand:
Your Company has plans to develop a 1620 MW Power Plant near Baranda,
Jharkhand. The Company is still in the process of finalizing the location
for the Power Plant and initiating steps to secure the fuel linkage for the
proposed power project.
Toshiba JSW Turbine & Generator Private Limited (Toshiba JSW)
Toshiba JSW has been incorporated with a shareholding of 75% by Toshiba
Corporation Limited, Japan (Toshiba) and 25% by JSW Group to design,
manufacture, marketing and maintenance services of large sized
Supercritical Steam Turbines & Generators of size 500 MW to 1000 MW.
Technology transfer agreement was signed between Toshiba and Toshiba JSW
for transferring supercritical turbine manufacturing technology.
Your Company has invested Rs. 64 Crore equivalent to 21.33% of the paid up
equity in Toshiba JSW, the Joint Venture Company (JVC) to carry on the
business of design, manufacture, marketing and maintenance services of mid
to large sized Supercritical Steam Turbines and Generators with JSW Steel
Limited holding 3.67% and Toshiba holding 75%. The JV with Toshiba would
provide the Company with an advantage of being a preferred client for
sourcing of power project equipment.
The construction activities of Turbine-Generator Manufacturing Facility
have been completed and the Factory near Ennore Port, Chennai was
inaugurated on 12th February, 2012 by the Hon`ble Chief Minister of
Toshiba JSW has already secured orders from National Thermal Power
Corporation for Engineering, Manufacturing and Supply of 2x660 MW and 3x800
MW supercritical Turbine Generator sets. Trial production of different
Turbine-Generator components and manufacturing of different types of
Turbine Blades are under progress.
MJSJ Coal Limited (MJSJ):
In terms of the Joint Venture Agreement to develop Utkal-A and Gopal Prasad
(West) Thermal coal block in Odisha, your Company has participated in the
11% equity of MJSJ, Odisha along with four other partners. The Government
of India decided to allot 1,522 acres of Gopal Prasad west area to MJSJ.
Mahanadi Coalfields Limited, a public sector Company holds 60% of the
equity. Land acquisition is under progress. Your Company has invested Rs.
7.71 Crore in MJSJ for 11% stake as on 31st March, 2012.
Power Exchange of India Limited (PXIL):
Your Company has invested Rs. 1.25 Crore in PXIL which provides the
platform for trading in electricity. PXIL is promoted by National Stock
Exchange of India Limited and National Commodities & Derivatives Exchange
10. CREDIT RATING
CARE has reaffirmed `CARE AA-` (Double AA minus) rating to the long-term
bank facilities of your Company aggregating to Rs. 3,466.61 Crore. Non
Convertible Debentures of your Company aggregating to Rs. 1,200 Crore and
Rs. 2,400 Crore also are rated `CARE AA-` (Double AA minus). The rating
reaffirmed to the short-term bank facilities of your Company aggregating to
Rs. 5,188.50 Crore is `A1+` (A One Plus).
11. FIXED DEPOSITS
Your Company has not accepted any fixed deposits from the public and is
therefore not required to furnish information in respect of outstanding
deposits under Non-Banking Financial Companies (Reserve Bank) Directions,
1966 and Companies (Acceptance of Deposits) Rules, 1975.
During the year, your Company received the following awards:
1. The Ministry of Power, Government of India has conferred Bronze Shield
for 2009-2010 and Silver Shield for 2010-2011 to our Toranagallu Thermal
Power Stations (860 MW) in the category of "Performance of Thermal Power
Stations" for meritorious performance in the Power Sector.
2. At the World HRD Congress - for HR Team of the year 2012, Global HR
Excellence Award 2012 for Organization with Innovative HR Practices, for
Institution Building, for HR Leadership, for Leader with HR Orientation and
for Young HR Professional of the year.
3. 2nd Prize for Safe Power Boiler Award in SHE Confluence 2012 organized
by Karnataka State Safety Institute.
13. BOARD OF DIRECTORS
The Board comprises of Eight Directors, of which four are Independent
Directors with one of them being nominee Director.
2. Retirement by Rotation
In accordance with the requirements of the Companies Act, 1956 and Article
129 of the Articles of Association of the Company, Mr. P. Abraham and Mr.
D. J. Balaji Rao, retire by rotation and being eligible, offer themselves
3. Changes in the Composition of Directors
* Mr. Lalit Kumar Gupta resigned as a Director and also ceased to be the
Joint Managing Director & Chief Executive Officer of the Company with
effect from the close of 30th November, 2011. The Board placed on record
the valuable contributions made by Mr. Lalit Kumar Gupta during his tenure.
* Mr. R. R. Pillai was appointed as an Additional Director and Whole-time
Director designated as Director (Technical & Projects) with effect from
30th April, 2012. The Company has received a notice in writing from a
Member proposing the candidature of Mr. R. R. Pillai for the office of
* Mr. S. S. Rao has resigned as a Director and ceases to be the Whole-time
Director of the Company with effect from the close of 30th April, 2012. The
Board places on record the significant contributions made by Mr. S. S. Rao
during his tenure.
4. Board Meetings
The Board met four times during the year on 28th April, 2011, 21st July,
2011, 9th November, 2011 and 21st January, 2012.
14. CORPORATE GOVERNANCE
The Company has complied with the requirements of Corporate Governance as
stipulated under Clause 49 of the Equity Listing Agreement of Stock
Exchange and accordingly, the Report on Corporate Governance forms part of
the Annual Report.
The requisite Certificate from M/s. LODHA & CO., the Statutory Auditors of
the Company regarding compliance with the conditions of Corporate
Governance as stipulated in Clause 49 is annexed to this Report as also the
Management Discussion and Analysis which is given as Annexure to this
15. DIRECTORS` RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies Act,
1956 with respect to Directors` Responsibility Statement, it is hereby
1. That in preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
2. That the Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of the profit of the Company
for the year under review;
3. That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other irregularities;
4. That the Directors have prepared the annual accounts for the year under
review, on a `going concern` basis.
M/s. LODHA & CO., Chartered Accountants, the Auditors of the Company,
retire at the ensuing Annual General Meeting and being eligible, offer
themselves for reappointment.
In accordance with the Order dated 2nd May, 2011 issued by Ministry of
Corporate Affairs (MCA) pursuant to Section 233B of the Companies Act,
1956, your Company is required to get its cost accounting records in
respect of each of its financial year commencing from 1st April, 2011
audited by a Cost Auditor and had appointed M/s. S. R. Bhargave & Co., Cost
Accountants to conduct the audit of the cost accounting records for FY
2011-2012. The Cost Audit Report which is required to be filed within 180
days from the end of FY 2011-2012 is under preparation and will be filed
within the prescribed time limit.
Subject to the approval of the Central Government, your Company has
reappointed M/s. S. R. Bhargave & Co., Cost Accountants to conduct the
audit of the cost accounting records for FY 2012-2013.
17. DISCLOSURES AS PER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956
Disclosure as per Section 217(1)(e) of the Companies Act, 1956 read with
Companies (Disclosure of Particulars in the Report of Board of Directors)
Rules, 1988 are as follows:
A. ENERGY CONSERVATION
a) Measures taken for Conservation of Energy:
i) 3 Nos. 100 KVA & 1 No. 75 KVA lighting transformers winding was modified
to reduce the secondary voltage from 255Volts to 208Volts.
ii) 4 Nos. Solar lights installed.
iii) 2 Nos. partially loaded lighting transformers switched off.
iv) Optimised ESP ash Compressor operation for energy conservation.
i) Optimised the Instrument air compressor operation for all units.
ii) Interconnection provided for LDO pumps and one pump kept in service.
iii) Equipment efficiencies evaluated and optimised
iv) Optimize the ESP ash conveying cycles to ensure dense phase operation.
v) Energy saver for lighting installed at different locations.
b) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy:
Installing mechanical seals for ACW water pumps to reduce friction loss &
c) Impact of the measures at (a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods:
The energy conservation measures have reduced energy consumption by 57KW
The energy conservation measures have reduced energy consumption by 515KW.
d) Total energy consumption and energy consumption per unit of production
as per Form A in Respect of industries specified in the Schedule thereto:
e) Your Company is one of the best in the industry in terms of ash
B. TECHNOLOGY ABSORPTION AND INNOVATION
a) The form for disclosure of particulars with respect to Technology
Absorption in Form `B` is attached as Annexure `A` to this report.
b) The Company has carried out 29 numbers of logic/structural modifications
in plants located at Toranagallu, which has resulted in enhanced plant
c) The Company has carried out 43 numbers of logic/structural modifications
in plants located at Jaigad, which has resulted in enhanced plant
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
The Foreign Exchange earnings of the Company for year under review amounted
to Rs. Nil. The foreign exchange outflow is as under:
Sr. Particulars Rs. Crore
(a) Import of Coal 2,775.68
(b) Plant, Machinery and Spares 65.46
(c) Furniture and Fixtures 1.95
(d) Travelling Expenses 0.34
(e) Legal and Professional 1.52
(f) Interest and Finance charges 7.41
(g) License and Membership Fee 0.59
(h) Dividend Paid 11.10
18. PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 217(2A) of the Companies Act, 1956
("Act") read with the Companies (Particulars of Employees) Rules, 1975, as
amended, the names and other particulars of the employees are set out in
the Annexure to the Directors` Report.
However, having regard to the provisions of Section 219(1) (b)(iv) of the
said Act, the Annual Report excluding the aforesaid information is being
sent to all the Members of the Company and others entitled thereto. Any
Member interested in obtaining such particulars may write to the Company
Secretary at the Registered Office / Corporate Office of the Company.
Your Directors would like to express their appreciation for the co-
operation and assistance received from the Government authorities, the
financial institutions, banks, vendors, customers, debenture holders and
shareholders during the year under review. Your Directors also wish to
place on record their deep sense of appreciation for the committed services
by all the employees of the Company.
For and on behalf of the Board of Directors
Mumbai Sajjan Jindal
30th April, 2012 Chairman & Managing Director
ANNEXURE "A" TO DIRECTORS` REPORT
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION
Research and Development (R & D)
1. Specific area in which R&D As such the Company did not carry out
carried out by the Company any basic R&D work during the year
2011-12. However, following equipment
were installed to improve performance
A. Generator rotor ground fault
B. UPD system for HP-Bypass motors 15KW.
A. Installation of additional CW
B. Installation of Ultrafiltration
2. Benefits derived as a result Vijayanagar:
of the above R & D
A. Protect generator from ground faults.
B. Un-interrupted power for by-pass
valve oil system.
A. By increasing the redundancy to
minimize the outages due to loss of
B. Improved the quality of water thereby
reduction of blow down.
3. Future Plan of Action Vijayanagar:
A. Exciter field ground protection relay
B. AVR replacement in one unit of 130 MW
& one unit of 300 MW.
A. Turbine Fast cooling device to be
B. Coal storage covered shed to be
C. Alternative source of water by
D. Ammonia injection system.
E. Flue gas desulpherisation system.
4. Expenditure on R & D (in Rs. lakhs)
(a) Capital (a) Rs. 158 Lakhs
(b) Recurring (b) Rs. NIL
(c) Total (c) Rs. 158 Lakhs
(d) Total R& D expenditure as a (d) 0.031%
percentage of turnover
Technology absorption, adaptation and innovation:
1. Efforts, in brief, made Vijayanagar:
towards Technology absorption, A. RO plant installed to reuse CW
adaptation and innovation blow down.
B. Fast Cooling device for turbine
C. Installation of Electro-chlorination.
D. Blending of coal.
E. CTMM relays replaced by VAMP relays
in HT Switchgear of 130 MW Units.
A. Cleaner technology for CW treatment
against high cost & chemical intensive.
B. Magnetic separator installation at
C. Implementation of PLC dust
suppression system in coal handling
2. Benefits derived as a result Vijayanagar:
of the above efforts A. Reduces fresh water make up to the
plant and reduce waste water discharge.
B. Reduction in shut down period.
C. Eliminate safety risks involved with
handling liquid chlorine.
D. For optimising power production cost.
E. Increased the reliability of
protection of HT Switchgear.
A. Technology absorbed due to chemical
B. To prevent the metalic foreign
material entry to coal system thereby
increasing the milling system
C. Avoid fugitive emission in coal
handling system and to create better
3. In case of imported technology Not Applicable
(imported during the last five
years reckoned from the beginning
of the FY), following information
may be furnished:
(a) Technology Imported
(b) Year of Import
(c) Has technology been fully
(d) If not fully absorbed, areas
where this has not taken place,
reasons thereof and future plans
Management Discussion and Analysis
GLOBAL ECONOMIC REVIEW
The global economic activity during year 2011-12 witnessed a slowdown
relatively across the world - the socio-economic turbulence in the Middle
East and North Africa, tsunami in Japan, the sovereign debt crisis in the
Eurozone and fragile growth in US. The downturn in the economic activity
during the course of the year had impacted the commodity prices while the
uncertainty in middle-east region lead oil prices to remain firm. In mature
markets, debt crises and slow recovery remain unresolved whilst emerging
markets are grappling with persistent inflation and high energy prices. As
technology advances, competition increases and the balance of economic
power flows to high-growth markets such as Brazil, Russia, China and India,
the global economy is seemingly entering a new phase with continued
INDIAN ECONOMIC REVIEW
Against the backdrop of a turbulent world, the Indian economy is facing its
own share of pain: persistent inflation, ballooning fiscal deficit,
weakening rupee, mediocre industrial performance, sluggish exports and
spiralling fuel prices. The Reserve Bank of India (RBI) was prompted to
hike the interest rates 13 times since 2010 to tame inflation.
The combined impact of all the adverse factors is evident in the GDP
figures. The country`s GDP growth has slumped to 6.5% in 2011-12 from 8.4%
in 2010-11, lowest in nine years. The manufacturing, services and
agriculture sector growth declined to 2.5%, 8.9% and 2.8% from the levels
of 7.6%, 9.3% and 7%, respectively in the previous fiscal.
Annual GDP growth (%)
2007-08 2008-09 2009-10 2010-11 2011-12
9.3 6.7 8.4 8.4 6.5
The government is concerned about the slowdown, but is optimistic about
managing around 6.5-7% GDP growth in 2012-13, owing to the following
* Agricultural sector to maintain momentum on expectation of normal
* Manufacturing sector rebound on the back of expected increase in
* Increased focus on reviving key sectors (mining and power) with emphasis
on increasing coal production
POWER SECTOR OVERVIEW
Power is an essential and critical element in accelerating India`s socio-
economic progress with a direct correlation to the country`s GDP growth.
India has the world`s fifth largest power generation capacity, and is the
sixth largest consumer, accounting for 3.4% of global consumption. However,
India`s per capita power consumption is still quite low as compared to that
of the high-growth developing economies like China, Brazil and Russia (as
seen in the graph below)
Electricity consumption per capita
(Source: IEA, Macquarie Research)
The government has taken initiatives viz. the Rajiv Gandhi Gram
Vidyuthikaran Yojana which aims to provide electricity access to 56% of the
rural population, thereby paving the way for enhanced per capita
consumption. Further, with rapid industrialisation and urbanization, the
consumption of power is expected to increase.
Capacity and Demand
2012 marks the end of the 11th Plan period. By the end of the Plan period,
India achieved capacity addition of 68 GW during the plan period, by far
the highest addition compared to any other previous years. Moreover, India
crossed a landmark figure of 200 GW of installation capacities in April
The power is generated through thermal, hydro, nuclear and other renewable
sources, with thermal comprising the major chunk in the overall generation.
Nuclear power and other sources are becoming popular, and have a
significant potential to improve the power scenario in India and help
reduce green-house gas emissions.
Thermal Hydro Nuclear Renewable Power
(solar, bio mass,
Proportion of 65.8 19.5 2.4 12.3
The state utilities, central utilities and private players account for
India`s power generation. The central utilities, have managed to achieve
competitive efficiency rates. Besides, increased private sector
participation is expected to result in improved efficiencies and higher
generation in the coming years. The sector-wise share in India`s total
installed capacity is given in the chart below:
Sector-wise break-up installed capacity
The private sector participation, which has significantly contributed to
the capacity addition in the 11th plan period, has increased to 27% over
the past five years, an undeniably encouraging factor.
The capacity addition in the 11th plan period has witnessed significant
improvement due to the participation of the private sector. However, the
country`s power sector is facing challenges primarily due to slow reforms
in the transmission & distribution segments, dwindling financial health of
distribution utilities, issues regarding adequate availability of domestic
coal, environmental issues relating to opening of mines, issues related to
increase in costs of imported coal and significant depreciation of rupee.
These issues are constraining growth of this sector and may adversely
impact economic growth.
OPPORTUNITIES AND OUTLOOK
The Indian power sector provides tremendous opportunity for growth
considering the strong underlying economic fundamentals. Though, the sector
is presently confronted with challenges, the Government has taken
cognizance of the key issues facing the power sector and the last quarter
has witnessed steps taken to resolve the issues impacting the sector. Some
of the key positive developments are:
* The State Electricity Regulatory Commissions (SERC) have been given the
authority to raise tariffs on a suo moto basis, if state-owned d/stribution
companies (DISCOMS) do not ask for tariff revision. Several states have
opted for tariff revisions and an encouraging aspect has been tariff
revisions by DISCOMS with critically high losses.
* Shunglu committee has recommended key reforms to improve the financial
health of DISCOMS
* Steps initiated towards execution of Fuel Supply agreements between
developers and Coal India Limited as also to ensure adequate availability
of fuel for the power plants
* Fast tracking of clearances for opening of coal mines
These proactive measures, once instituted, are expected to provide
opportunities for growth within the power sector across generation,
transmission and distribution.
Incorporated in 1994, JSW Energy is the power vertical of the JSW Group. It
ventured into the power generation business in 2000 and gradually forayed
into the trading and transmission business. It has 2,600 MW operational
capacities and 540 MW of capacities in the construction phase and targets
to have a combined installed capacity of 11,770 MW. It sells a significant
portion of the power generated on a merchant basis. It also has lignite
mining rights of 3 million tonnes per annum (MTPA) at Barmer and mineral
rights (coal) of 0.50 MTPA in South Africa.
During the year, the Company achieved a historically high generation
capacity of 2,600 MW translating into an increase in net power generation
by 51% to 13,594 million units as against 9,016 million units in the
previous year. Some of the major developments during the year comprise:
* Achieved COD for the 3rd and 4th unit of 300 MW each at Ratnagiri
* Achieved COD for 3rd and 4th unit of 135 MW each at Barmer
* Commencement of commercial operations of the lignite mines at Kapurdi in
* 400 kV double circuit Jaigad - Karad transmission line commissioned
During FY 2012, the Barmer project received consent from Rajasthan
Electricity Regulatory Commission (RERC) for an adhoc interim tariff which
facilitated the resumption of operations of Unit 1 and Unit 2 at Barmer,
after a shutdown of around 6 months, from 12th October, 2011. RERC is still
in the process of considering the petition to provide the final tariff,
which once granted, will become effective retrospectively. Presently, the
Company has recognized the income based on adhoc interim tariff. In case of
the transmission project, the Company has filed the Annual Revenue
Requirement (ARR) for FY 2012 based on the approval provided by Maharashtra
Electricity Regulatory Commission (MERC) for FY 2011 and revenue for FY
2012 has been recognized based on the ARR filed, though MERC approval had
not been received.
The operations of the Company had been impacted during the year due to
impact on plant performance due to early and unprecedented rainfall,
deferment of power procurement by distribution licensees, frequent back
down of power sold on merchant basis, delay in receipt of approval from
regulatory commission and tariff being granted on adhoc interim basis.
During the year, the Company had entered into banking of power during
certain lean periods and has successfully been able to schedule the power
during the peak season. The Company had entered into a power conversion
agreement with a group Company, to provide power on conversion basis
against the fuel provided by them at the Vijayanagar location.
Plant-wise PLF and Net generation
Plant 2011-12 2010-11
PLF Net PLF Net
(%) Generation (%) Generation
Vijayanagar 84.70 5,905 # 95.93 6,687
Barmer 77.72* 1,430 53.28 795
Ratnagiri 78.09 6,259 77.34 1,534
Total 13,594 9,016
# including power conversion of 895 MU`s
* based on operational period of the plant
Fiscal 2012 witnessed a squeeze in margins resulting from drop in
realizations on merchant sales combined with significant increase in fuel
costs. The significant increase in fuel cost primarily has been on the back
of increase in cost of imported coal, levy of counter-vailing duty on
imported coal and depreciation in the rupee against US dollar. The
enhancement of generation capacity and transmission projects has lead to an
increase in interest and depreciation costs. These factors had a bearing on
the financial performance of the Company.
A detailed financial discussion and analysis is furnished below on the
audited financial statements.
Revenue from Sale of Power (Rs. crore):
Parameters 2011-12 2010-11 % change
Revenue from Sale of 4,731.22 3,661.84 29.20
The significant growth in revenues from sale of power during the year was
mainly due to an increase in generation capacity by 600 MW at Ratnagiri
Revenue from Operation and Maintenance Services (Rs. crore):
Parameters 2011-12 2010-11 % change
Operation and 82.46 49.24 67.47
The growth in revenues from operations and maintenance (O&M) services
during the year was owing to an increase in realizations from services to
existing power plants and extension of O&M services to additional power
plants during the year.
Revenue from Project Management Contracts (PMC) ( Rs. crore):
Parameters 2011-12 2010-11 % change
Project management 78.75 151.52 (48.03)
The PMC revenue has declined because of projects nearing completion or
having completed and moved into Operations and Maintenance phase.
Other Income (Rs. crore):
Parameters 2011-12 2010-11 % change
Other income 114.02 112.10 1.71
Other income primarily comprises of interest income and income from mutual
Cost of Fuel (Rs. crore):
Parameters 2011-12 2010-11 % change
Fuel Cost 3,460.28 2,078.05 66.52
Company`s expenditure on fuel has increased by Rs. 1,382.23 crore during
the year mainly due to higher coal consumption owing to overall increase in
generating volumes and increase in landed cost of fuel.
Employee benefit expenses and Operating Expenses ( Rs. crore):
Parameters 2011-12 2010-11 % change
Employee benefit 80.90 66.94 20.85
Operating expenses 261.02 194.18 34.42
Employee benefit expenses have increased owing to increase in the number of
employees in line with increased capacities and a general increase in
salaries. Operating expenses have increased in line with the increase in
Earnings Before Interest, Depreciation, Exceptional items and Taxes
(EBIDTA) (Rs. crore):
Parameters 2011-12 2010-11 % change
EBIDTA 1,328.24 1,641.98 (19.11)
EBIDTA has declined during the year inspite of overall growth in revenues
owing to reduction in average tariff and an increase in fuel cost.
Finance Costs and Depreciation (Rs. crore):
Parameters 2011-12 2010-11 % change
Finance costs 508.16 341.00 49.02
Depreciation 377.22 211.61 78.26
Finance costs and Depreciation have increased primarily on account of
declaration of commercial operations of 2 additional units of 300 MW each
at Ratnagiri during the year.
Profit after Tax ( Rs. crore):
Parameters 2011-12 2010-11 % change
Profit after Tax (PAT) 234.64 885.61 (73.51)
The lower EBIDTA coupled with higher depreciation and interest costs and
the exceptional foreign exchange loss has resulted in a decline in PAT.
The Net Worth increased from Rs. 6,025.39 crore in 2010-11 to Rs. 6,158.72
crore in 2011-12 whereas the debt equity ratio declined from 0.91 to 0.87.
CONSOLIDATED RESULTS - HIGHLIGHTS
* Power generation increased 50.78% from 9,016 MU`s in 2010-11 to 13,594
MU`s in 2011-12.
* Revenues also increased 41.51% from Rs. 4,427.54 crore in 2010-11 to Rs.
6,265.44 crore in 2011-12.
* EBIDTA declined 6.06% from Rs. 1,697.23 crore in 2010- 11 to Rs. 1,594.39
crore in 2011-12.
* PAT declined 79.80% from Rs. 841.82 crore in 2010-11 to Rs. 170.05 crore
* Net Worth increased from Rs. 5,676.48 crore in 2010-11 to Rs. 5,700.07
crore in 2011-12.
* Debt equity increased from 1.70 in 2010-11 to 1.75 in 2011-12.
The Company has been following the globally recognised Committee of
Sponsoring Organizations (COSO) framework of risk management to proactively
manage risks and opportunities that impact organizational objectives.
The relevant risks are identified, assessed and the responded to, in the
context of the Company`s risk appetite. The framework provides for:
- Timely identification, communication and assessment of risks and
- Risk ownership aimed at comprehensive coverage, impact assessment,
proactive action and regular tracking.
- Training of all risk owners with a view to imbedding risk intelligence
a. Decision-making - to ensure prudence.
b. Performance - to ensure competence and accountability.
- Timely escalation to the Directors` Committee for risk oversight to
ensure prioritisation of initiatives and allocation of resources in
consonance with enterprise objectives.
The Group Chief Risk Officer facilitates the framework. The Company`s key
risks and its mitigation strategies include:
Availability, price volatility and logistical constraints can impact the
movement of coal, the principal fuel, affecting normal plant operations.
* Broad-basing the sourcing countries and increasing the coal vendor base.
* Sourcing coal directly from miners after due diligence.
* Developing multiple port options for landing coal consignments to avoid
delays due to port congestion.
* Ensuring sufficient availability of rakes for rail transport.
* Adequate infrastructure for loading/unloading and storage at the plant
* Maintaining adequate coal stock levels.
2) Power Evacuation
Demand-supply fluctuations, transmission network availability, government
policy on open access as well as interstate sales impact power evacuation.
* Company regularly reviews the market scenario with a view to optimise the
mix of Long Term PPA`s and merchant sales.
* Within merchant units, the Company strives to ensure an optimum mix of
medium, short and spot arrangements.
* Petition the Government through industry associations, for sector
friendly policy measures.
3) Projects, operations and maintenance
Efficiency in project review as well as operations and maintenance review
have a significant impact on productivity as well as revenue and
* Effective integration of vendor, contractor, schedule and cost
* Reverse engineering to develop alternative vendors locally for spares
* Need-based knowledge and resource sharing across plants.
* Ensuring adequate availability of critical inputs like water.
* Preventive maintenance as per predetermined schedule.
* Highest standards of human resource management
* ERP systems and effective processes.
4) Environment, Health and Safety (EHS)
Adverse EHS factors can have a negative impact on human life, property and
operations emphasising the need for continued organisation wide awareness
and maintenance of EHS standards.
* Possession of equipment which meet the highest quality standards, coupled
with processes to control hazardous waste, leakages, structure instability,
natural calamities and health hazards.
* Regular training programmes on latest updations in basic EHS norms.
The Company firmly believes that employees constitute the most vital force
in moving the organisation forward. With an addition of 207 people during
the year 2011-12, the employees` strength at JSW Energy stood to 1123 as on
31st March, 2012. In tune with the business requirements, a number of HR
initiatives were taken by the Company to maintain its position as one of
the leading Employer Brands in the country. Some of the key HR initiatives
undertaken during 2011-12 are as follows:
i. Initiated a new process of background verification check to make hiring
process robust and screen candidates through a professional agency.
ii. Implemented a strong On Boarding process `Aagaman`, `Buddy System` and
monthly Connect Sessions with new joinees which created a feeling of warmth
and facilitated new employees to align with the organisation.
iii. Participated in the World HRD Congress where the Company won six HR
awards which enhanced employer branding of JSW Energy.
iv. Implemented an exit analysis procedure to ascertain the reasons of
employee turnover and implement necessary corrective action. Significantly
reduced attrition from 20.24% in the previous year to 11.44% in the year
v. Introduced a Leadership Development Programme LEAP (Lead Engage
Associate Perform) for Operations & Maintenance in-charge`s of different
vi. Increased focus on training as reflected in the enhanced training man-
hours (18,348 hours in FY 2011-12 vis-a-vis 4,949 hours in FY 2010-11).
CORPORATE SOCIAL RESPONSIBILITY
JSW Foundation plans and implements social development activities of the
JSW Group of companies. It is an independent institution and is governed by
a Board of Trustees, comprising the senior management of the JSW group of
companies. The Foundation is headed by Mrs. Sangita Jindal, Chairperson JSW
* Holistic development of the communities through initiatives in the areas
of education, health, livelihood creation, environment, local sports
development and conservation of our arts and cultural heritage.
* Adapted the `Millennium Development Goals` framework to encourage pre-
primary and primary education, infant mortality and maternal health.
* Activities were conducted in selected locations adjacent to plant
1) Jindal Vidya Mandir (JVM)
JVM, a CBSE Board affiliated school (operating till standard V) at
Ratnagiri, has good teachers and infrastructure. With the addition of JVM,
the JSW Group now operates five schools. Each of these schools adheres to
rigorous academic pursuits and encourages extra-curricular talent.
2) Appointment of local youth as teachers
The Foundation appointed 24 local youth as teachers across 15 schools at
Kutehr, HP, to match the student-teacher ratio. A 30% increase in
attendance is observed in these schools.
3) De-centralized Mid-day Meal programme
The Foundation has partnered with Gram Panchayat, Ratnagiri to enhance the
quality of the available food, both hygienically and nutritionally. After
consultation with a dietician, thrice a week, nutritious supplements
(sprouted legume, eggs and dates) are given to the students. This
initiative reduced the instances of malnutrition among the students,
4) URJA PHC
The Foundation operates a well-lit and ventilated PHC (public health care)
at Ratnagiri with adequate space for registration, record room, drug
dispensing room and waiting area for patients, among others. It also
conducts special camps for women, children and the elderly as well as
routine health check-ups for students.
5) Up-gradation of government-run health centres
The government-run health centres at Bhadresh, Barmer and Kutehr have been
upgraded to strengthen the existing infrastructure. The initiatives
a) Improving water and sewerage systems
b) Renovation of buildings
c) Sanitisation of operation theatre and other rooms
d) Recruitment of doctors, nurses and other staff; also providing new
e) Providing refrigerators for medicines/vaccines and registers for data
collection and MIS
The Foundation collaborates with state health departments and aims to
ensure advanced health outreach to a large rural population through PHCs.
The initiatives have resulted in increased institutional delivery and
adoption of family-planning methods.
6) Sanitation drive
A major sanitation drive was undertaken at Ratnagiri in collaboration with
the government`s Total Sanitation Campaign. Two hundred individual units
have been constructed and the community is providing financial assistance
to this initiative.
7) Self-help groups
Active self-help groups have been organised for local women, which have
started individual and group enterprises. One such enterprise is supplying
chapattis to the Ratnagiri mess. In addition, tailoring classes were
conducted at Kutehr and Barmer.
Earth Care Awards: This is a national initiative to support the growing
consciousness about climate change, emissions reduction, land-and-water
preservation, and the general reduction of environmental hazards. The
awards jury is headed by Dr M S Swaminathan and the Director Generals of
ICFRE and ICRISAT are members.
Water conservation: A community-based water conservation project was
started to enable communities to understand how even small quantities of
rainfall could be conserved. At Barmer, water conservation has been
completed across 90 hectares of land.
9) Sports promotion
The development of playing grounds for rural schools helps encourage
10) Promotion of Arts
Following a major exterior restoration initiative at Mumbai`s Sir J. J.
School of Arts, the Foundation is now completing the restoration of the
Interiors of Fine Arts Building.
JSW ENERGY CENTRE OF EXCELLENCE (JSWECE)
The Company through the JSWECE conducts a one-year Post Graduate Diploma
course in Power Plant Engineering to
develop a trained talent pool for the power sector and JSW Energy in
particular. The course is offered under academic collaboration with M.S.
Ramaiah Institute of Technology, Bangalore, an autonomous Institute under
Visvesvaraya Technological University, Karnataka and is recognised by the
Central Electricity Authority (CEA). JSWECE launched its first batch of
Post Graduate Diploma in Power Plant Engineering (PGDPPE) in August, 2009.
The Company runs JSWECE at OPJ Centre, Vijayanagar, which imparts training
on PC-based dynamic high-fidelity 300 MW Thermal Power Plant Simulators. It
also provides enhanced exposure to students through on-the-job training in
its power plants at Vijayanagar, Ratnagiri and Barmer. It is successfully
running its fifth batch with 60-70 students and has earned recognition from
several power plants across the country. While some of the students are
absorbed by the Company, the rest are employed in other power-generating
In addition to conducting the one-year PGDPPE, JSWECE is also building
capabilities of employees of JSW Energy through continuous learning and
development programmes at its centre. A programme developed for Diploma
Engineers of Ratnagiri has helped improve their skill and employability at
the shop floor. JSWECE is developing a continuous stream of professionals,
groomed with specialized skills, to strengthen India`s power sector and
enhance employability for eligible engineering professionals.
INTERNAL CONTROL AND AUDIT
A) Internal control
The Company has a proper and adequate system of internal control,
commensurate with the size and nature of its business. The internal control
system is integral to the Company`s corporate governance.
Some key features of the internal control system comprise:
* Adequate documentation of policies, guidelines, authorities and approval
procedures, encompassing important functions of the Company.
* Deployment of an organization-wide ERP system covering its operations and
supported by a defined on-line authorization protocol.
* Ensuring complete compliance with laws, regulations, standards and
internal procedures and systems.
* De-risking the Company`s assets/resources from any loss, attrition and
* Ensuring the integrity of the accounting system; the proper and
authorized recording and reporting of all transactions.
* Preparation and monitoring of annual budgets for all operating and
* Ensuring reliability of all financial and operational information.
* The Audit Committee, comprising Independent Directors, regularly reviews
audit plans, significant audit findings, adequacy of internal controls,
compliance with Accounting Standards, among others.
* A comprehensive Information Security Policy and continuous updation of
B) Internal audit
The Company has an internal audit function that inculcates global best
standards and practices of international majors into the Indian operations.
The Company has a strong internal audit department reporting to an Audit
Committee comprising Independent / Nominee Directors who are experts in
their respective fields.
The Company successfully integrated the COSO (Committee of Sponsoring
Organizations of the Treadway Commission) framework with its audit process
to enhance the quality of its financial reporting, compatible with business
ethics, effective controls and governance.
The Company extensively practices delegation of authority across its team,
which creates effective checks and balances within the system to arrest
non-conformance. The internal audit team has access to all organizational
information, facilitated by the ERP mechanism.
C) Audit plan and execution
The Internal Audit department prepares a comprehensive Risk-based Audit
Plan which is executed by the internal audit team across locations. The
frequency of audit is decided on the basis of risk ratings assigned to
areas / functions.
The Audit Plan is subject to periodic review to include areas, which have
assumed significant importance in line with the emerging industry trends
and the aggressive growth of the Company. In addition, the audit department
also relies on internal customer feedback and other external events to
incorporate additional areas into the audit plan.
FORWARD LOOKING AND CAUTIONARY STATEMENTS
In this Annual Report we have disclosed forward-looking information to
enable investors to comprehend our prospects and take informed investment
decisions. This report and other statements - written and oral - that we
periodically make, contain forward-looking statements that set out
anticipated results based on the management`s plans and assumptions. We
have tried wherever possible to identify such statements by using words
such as `anticipates`, `estimates`, `expects`, `projects`, `intends`,
`plans`, `believes` and words of similar substance in connection with any
discussion of future performance.
We cannot guarantee that these forward-looking statements will be realised,
although we believe we have been prudent in our assumptions. The
achievement of results is subject to risks, uncertainties and inaccurate
assumptions. Should known or unknown risks or uncertainties materialise, or
should underlying assumptions prove inaccurate, our actual results could
vary materially from those anticipated, estimated or projected. Readers
should bear this in mind. We undertake no obligation to publicly update any
forward-looking statements, whether as a result of new information, future
events or otherwise.