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Directors Report of Torrent Power Ltd.

Mar 31, 2023

Your Directors are pleased to present Nineteenth Annual Report of the Company together with the Audited Financial Statements for the Financial Year ended March 31, 2023.

1. OPERATIONAL & FINANCIAL HIGHLIGHTS

The Management Discussion and Analysis Report for FY 23 is part of the Integrated Annual Report and explains the operating and financial performance of the business for the year.

Summary of the Financial Statements of the Company for the year under review is as under:

(H in Crore except per share data)
	Standalone		Consolidated
Particulars	Year ended March 31, 2023	Year ended March 31, 2022	Year ended March 31, 2023	Year ended March 31, 2022
Total income	19,271	14,012	26,076	14,493
Profit before tax and exceptional items	2,931	1,814	3,041	1,864
Exceptional item	--	1,300	--	1,300
Profit before tax	2,931	514	3,041	564
Total comprehensive income for the year (after non-controlling interest)	2,111	412	2,124	456
Add: Balance brought forward	5,700	5,908	5,646	5,841
Balance available for appropriation	7,811	6,320	7,770	6,297
Appropriations
Transfer to / (from) specific reserves	2	(77)	11	(46)
Dividend paid	1,057	697	1,057	697
Balance carried to balance sheet	6,752	5,700	6,702	5,646
Basic and diluted earnings per share (k per share)	44	9	44	9

2. DIVIDEND

As per Dividend Distribution Policy, the Company endeavours to distribute approx. 40% of its consolidated annual profits after tax as dividend in one or more tranches. The Board of Directors, on February 14, 2023, declared interim dividend of I 22.00 per equity share (including I 13.00 per equity share as a Special dividend) on 48,06,16,784 nos. of equity shares for FY23 [PY I 9.00 per equity share, including final dividend].

The Board, on May 29, 2023, has recommended final dividend of I 4.00 per equity share on 48,06,16,784 nos. of equity shares for FY23 [PY NIL per equity share]. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting and if approved, would result in a cash outflow of I 192.25 Crore.

The total outflow on account of dividend is I 1,249.61 Crore [PY I 432.56 Crore]. i.e. 57.57% [PY 93.92%] of consolidated total comprehensive income for FY23.

The Dividend Distribution Policy of the Company can be accessed at the Company''s website https://www.torrentpower.com/pdf/investors/ DividendDistributionPolicv.pdf

3. TRANSFER TO RESERVES

The Company has transferred H87 Crore from Debenture Redemption Reserve to General Reserve during the year under review. An amount of H2 Crore has been transferred to certain specific reserves, as described in the Statement of Changes in Equity being part of the Standalone Financial Statements.

4. FINANCE

During the year, ratings of the Company and its wholly owned subsidiaries were rated by various rating agencies movement of which are reproduced below:

1. CRISIL reaffirmed Companies'' long-term rating and short-term credit rating at AA /Stable and A1 respectively. India Ratings has also reaffirmed short term rating at IND A1 to the Commercial Paper Programme of the Company;

2. Torrent Solargen Limited, a wholly owned subsidiary of the Company, was assigned long term rating of (i) AA/Stable by CRISIL for its nonconvertible debentures of I 550 Crore and (ii) AA/ Stable by India Ratings for Capex LC facility of I 700 Crore;

3. The long-term credit ratings for Jodhpur Wind Farms Private Limited and Latur Renewables Private Limited were reaffirmed by CRISIL at AA (CE)/Stable;

4. Long term rating of Surya Vidyut Limited was upgraded by CARE from A-/Credit watch with developing implications to AA-/Stable;

Finance cost of the Company (on a consolidated basis) increased to I 818 Crore as against I 628 Crore in FY22. The increase in finance cost was on account of higher debt and increase in interest rates commensurate to hardening of interest rates in the economy.

During the year under review, the Company:

(i) t ied-up long term loan of I 1,200 Crore from which I 900 Crore were availed to finance capital expenditure for its distribution business;

(ii) raised I 1,400 Crore by way of issuance of secured non-convertible debentures, mainly to repay part of its existing debt and to partly fund the acquisitions during the year;

(iii) raised I 550 Crore by way of issuance of Green Bonds (unlisted, non-convertible debentures) to finance renewable project in wholly owned subsidiary named Torrent Solargen Limited;

(iv) refinanced long term loan of I375 Crore in wholly owned subsidiary named Surya Vidyut Limited;

(v) prepaid long term loan of I 174 Crore in wholly owned subsidiary named Torrent Saurya Urja 6 Private Limited (formerly known as LREHL Renewables India SPV 1 Private Limited);

The Company has repaid long term debt of I 1,157 Crore (including mandatory prepayments of I 168 Crore).

Outstanding consolidated long term debt as on March 31, 2023 was I 10,521 Crore (Refer Note 25 to the Consolidated Financial Statements). Consolidated debt to equity (including deferred tax liability) ratio as at the end of FY 23 was 0.92 (Previous Year: 0.83). The particulars of loans given, guarantees provided and investments made during the year are disclosed in Note 55 to the Standalone Financial Statements.

The Company, being an infrastructure company, is exempt from the provisions as applicable to loans, guarantees, security and investments under Section 186 of the Companies Act, 2013 (âthe Actâ).

5. SUBSIDIARIES AND ASSOCIATES

The Board has reviewed the affairs of the Company''s Subsidiaries and Associates at regular intervals. In accordance with Section 129(3) of the Act, the Company has prepared Consolidated Financial Statements incorporating the Financial Statements of all Subsidiaries which form part of the Annual Report. Further, a statement containing salient features of the Financial Statements of the Company''s Subsidiaries is given in prescribed Form AOC-1, which forms part of the Integrated Annual Report (Refer Page No. 422).

The said Form also highlights the financial performance of each of the Subsidiaries included in the Consolidated Financial Statements.

The details pertaining to the Companies that have become or ceased to be the Subsidiary or Associate of the Company during the year are provided in Note no. 43 to the Consolidated Financial Statements, forming part of the Integrated Annual Report.

In accordance with Section 136 of the Act, the Financial Statements of the Company, Consolidated Financial Statements alongwith separate Audited Financial Statements in respect of Subsidiaries are available for inspection by the Members at the Registered Office of the Company during the business hours on all working days. Any person desirous of obtaining the said Financial Statements may write at cs@torrentpower. com. The Annual Report of the Company and Audited Financial Statements of each of the Subsidiaries have been placed on the website of the Company at www.torrentpower.com.

6. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

The Members, at the 18^th AGM held on August 8, 2022, approved:

â¢ Appointment of Radhika Haribhakti (DIN: 02409519) as an Independent Director of the Company for a term of 5 consecutive years commencing from August 7, 2021 till August 6, 2026 (both days inclusive), shall not be liable to retire by rotation.

â¢ Appointment of Mamta Verma, IAS (DIN: 01854315) as Director of the Company, liable to retire by rotation.

â¢ Appointment of Ketan Dalal (DIN: 00003236) as an Independent Director of the Company for a term of 5 consecutive years commencing from May 11, 2022 till May 10, 2027 (both days inclusive), shall not be liable to retire by rotation.

â¢ Re-appointment of Samir Mehta (DIN: 00061903) as Chairperson of the Board of Directors and the Company for a period of 5 years w.e.f. April 1, 2023, liable to retire by rotation.

â¢ Re-appointment of Jinal Mehta (DIN: 02685284) as Managing Director of the Company for a period of 5 years w.e.f. April 1, 2023, liable to retire by rotation.

The Board, at its Meeting held on August 8, 2022, appointed Varun Mehta (DIN: 07862034) as an Additional Director of the Company w.e.f. August 8, 2022 till the conclusion of the next General Meeting. Subject to approval of the Members, in the said Meeting, he was also appointed as Wholetime Director of the Company for a period of 5 years effective from August 8, 2022. The Members, vide resolution passed through Postal Ballot on September 20, 2022, approved his appointment as Wholetime Director of the Company for a period of 5 years effective from August 8, 2022.

Samir Barua (DIN: 00211077) completed his second and final term as an Independent Director of the Company on September 30, 2022. The Board placed on record its sincere appreciation for valuable contribution made by him during his tenure as Independent Director of the Company.

In accordance with the provisions of Section 152 of the Act, read with rules made thereunder and Articles of Association of the Company, Jinal Mehta (DIN: 02685284) is liable to retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible offers himself for re-appointment.

The Board, at its Meeting held on April 13, 2023, appointed Saurabh Mashruwala as Chief Financial Officer (CFO) & Whole-time KMP of the Company w.e.f April 14, 2023 in place of Lalit Malik, who resigned as CFO & Whole-time KMP of the Company w.e.f close of business hours of April 13, 2023.

A brief resume and other relevant details of the Director proposed to be re-appointed are given in the Explanatory Statement to the Notice convening the AGM.

7. DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from the Independent Directors confirming that they meet the criteria of independence as prescribed under the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âthe Listing Regulationsâ). The Independent Directors are in compliance with the Code of Conduct prescribed under Schedule IV of the Act and the Code of Business Conduct adopted by the Company.

8. POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION POLICY

The Nomination and Remuneration Committee (âthe NRCâ) has approved following criteria and process for identification / appointment of the Directors:

Criteria for appointment:

i. Proposed Director (âPersonâ) shall meet all statutory requirements and should:

â¢ possess the highest ethics, integrity and values

â¢ not have direct / indirect conflict with present or potential business / operations of the Company

â¢ have the balance and maturity of judgment

â¢ be willing to devote sufficient time and energy

â¢ have demonstrated leadership and vision at senior levels, and have the ability to articulate a clear direction for the Company

â¢ have relevant experience with respect to Company''s business (in exceptional circumstances, specialisation / expertise in unrelated areas may also be considered)

â¢ have appropriate comprehension to understand or be able to acquire that understanding

- relating to Corporate Functioning

- concerning the scale, complexity of business and specific market and environmental factors affecting the functioning of the

Company

ii. The appointment shall be in compliance with the Board Diversity Policy of the Company.

Process for Identification / Appointment of Directors:

i. Board members may (formally or informally) suggest any potential person to the Chairperson of the Company meeting the above criteria. If the Chairperson deems fit, necessary recommendation shall be made by him to the NRC.

ii. Chairperson of the Company can himself also refer any potential person meeting the above criteria to the NRC.

iii. The NRC will process the matter and recommend such proposal to the Board.

iv. The Board will consider such proposal on merit and decide suitably.

Remuneration Policy:

The Company has in place a policy relating to the remuneration of the Directors, KMP and other employees of the Company. The policy is available on the website of the Company at https://www. torrentpower.com/pdf/investors/Remuneration Policv.pdf

9. EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The evaluation of the Board, its Committees and Individual Directors was carried out as per the process and criteria laid down by the Board of Directors.

The proforma formats for facilitating the evaluation process of the Non-Independent Directors and the Board as a whole and the Committees were sent to all the Non-Executive Directors (except Promoter Directors). A presentation on functioning of the Board and the Committees, containing the outcome of their evaluation and feedback was reviewed by the Independent Directors in their separate Meeting and by the Board. Based on the feedback, the Board expressed satisfaction on overall functioning of the Board, the Committees and performance of the Directors.

10. MEETINGS OF THE BOARD, COMMITTEES & COMPLIANCE TO SECRETARIAL STANDARDS

The Board meets at regular interval, with gap between two Meetings not exceeding 120 days. During the year under review, the Board met four times.

The Board has six committees namely Audit Committee (AC), Nomination and Remuneration Committee (NRC), Corporate Social Responsibility and Sustainability Committee (CSRSC), Stakeholders Relationship Committee (SRC), Risk Management Committee (RMC) and Committee of Directors (CoD). A detailed note on the composition of the Board and its Committees (AC, NRC, SRC and RMC) is provided in the Corporate Governance Report, forming part of the Integrated Annual Report. Composition of CSRSC is given in the Report on CSR Activities (Annexure - C). CoD is a Board Committee to facilitate routine executive decisions and exercise of authority granted by the Board in various matters. The Minutes of the Committee Meetings are reviewed at by the Board at the Board Meeting.

During the year under review, the Company has complied with the provisions of Secretarial Standard 1 (relating to Meetings of the Board of Directors) and Secretarial Standard 2 (relating to General Meetings) issued by the Institute of the Company Secretaries of India.

11. DIRECTORS'' RESPONSIBILITY STATEMENT

I n terms of Section 134(3) of the Act, the Board of Directors states that:

a. i n preparation of the Financial Statements, the applicable accounting standards have been followed and there are no material departures;

b. t he directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profits for the year ended March 31, 2023;

c. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the Financial Statements have been prepared on a going concern basis;

e. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. t he Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

12. AUDITORS STATUTORY AUDITORS

The Members, at the 18^th Annual General Meeting (AGM) of the Company held on August 8, 2022, had re-appointed M/s. Price Waterhouse Chartered Accountants LLP as Statutory Auditors of the Company for a period of 5 years from conclusion of 18^th AGM till conclusion of 23^rd AGM.

The Auditors'' Report for FY23 forms part of the Integrated Annual Report and does not contain any qualification, reservation or adverse remark.

COST AUDITORS

Pursuant to Section 148(3) of the Act, M/s. Kirit Mehta & Co., Cost Accountants, Mumbai had been reappointed as the Cost Auditors of the Company for FY23 by the Board of Directors for conducting audit of cost records maintained in respect of electricity. Their remuneration was ratified by the Members at 18^th AGM of the Company.

The Cost Audit Report for FY22 does not contain any qualification and was filed with the Central Government (within the prescribed time limit) on August 26, 2022 pursuant to Section 148(6) of the Act.

SECRETARIAL AUDITORS

Pursuant to Section 204 of the Act read with the Rules thereof, the Board ofDirectors had re-appointed M/s. M. C. Gupta & Co., Company Secretaries, Ahmedabad, as the Secretarial Auditors of the Company for FY23. The Secretarial Audit Report for FY23 is annexed herewith as Annexure - A.

There are no adverse observations in the Secretarial Audit Report which call for explanation.

13. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to the Financial Statements. The Statutory Auditors of the Company have audited such controls with reference to the Financial Reporting and their Audit Report is annexed as Annexure A to the Independent Auditors'' Report under the Standalone Financial Statements and the Consolidated Financial Statements which forms part of the Integrated Annual Report.

14. CORPORATE GOVERNANCE

In compliance with Regulation 34 read with Schedule V of the Listing Regulations, the Report on Corporate Governance forms part of the Integrated Annual Report. Certificate of the Auditors regarding compliance with the conditions of Corporate Governance is annexed to the Board''s Report as Annexure - B.

15. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR Activities undertaken by the Company were under the thrust areas of Community Healthcare, Sanitation & Hygiene, Education & Knowledge Enhancement and Social Care & Concern. During the year, the Company was required to spend T 32.62 Crore (2% of the average net profit of the past three financial years and surplus of T 0.65 Crore arising at implementing agency level from temporary investment of funds for FY 22). The Company contributed to implementing agency T 32.99 Crore (including surplus of T 0.54 Crore arising at implementing agency level from temporary investment of funds for FY 23) during the year. The total amount spent during the year was T 32.02 Crore. Further, the unspent amount at the end of the year was transferred to âUnspent CSR Accountâ of related ongoing projects at the implementing agency

level. The brief details of the major CSR activities are described hereunder:

1) REACH: Driven by the belief of Chairman Emeritus, Sudhir Mehta ''Children are the future of our nation and this future must be well preserved'', the flagship CSR program of the Group âREACHâ - Reach EAch CHild was initiated in the year 2016 under the aegis of UNM Foundation, a Section 8 Company. REACH has three major pillars: (a) Grass Root Interventions (b) Green Field Actions and (c) Other Allied Activities. Salient achievements are:

â¢ Grassroot Intervention Model: It targets to establish baseline health status of children in age group of 6 months to 6 years, through medical camps in villages around Surat, Dahej, Indrad and Balasinor. In Pre-Covid period, over 71,000 children were screened in 351 villages. Post-covid, an additional 649 villages were covered, addressing malnutrition in over 7,500 children with Mauji biscuits, bringing the total to 1,000 villages and over 78,000 children. Appropriate treatment regime resulted in benefiting more than 69% Malnourished children and more than 90% anaemic children. About 73% children having other ailments were also provided appropriate treatment with encouraging outcomes.

During the year, for the 1000 villages covered, fresh baseline medical camps were organized to identify underweight malnourished and anaemic children across all four locations. 748 villages have been covered and more than 37,000 children have been screened. Supplement distribution and follow-up activities for identified malnourished and anaemic children are ongoing.

In order to expand the coverage of REACH initiative, started conducting baseline medical camps in Banaskantha and Radhanpur in Gujarat and more than 7,300 children have been screened in 238 villages across these two locations.

Pilot projects have also been started in Agra, Bhiwandi and Union Territory of Dadra and Nagar Haveli. 14 villages are covered and more than 500 children have been screened across these three locations.

Till FY 23, on cumulative basis, more than 1,24,000 children of 1,214 villages are screened.

â¢ Greenfield Actions: Healthcare services are provided to children up to 18 years. There are three Paediatric Health Centres (PHCs) with basic laboratory and day-care facility at Dahej, Balasinor and Indrad, while fourth major centre near SUGEN Power Plant has a 150 bed paediatric hospital ''UNM

Children Hospital'' which is part of ''Rangtarang'' complex started in FY 20. In FY 23, more than 94,000 OPDs have been carried out across all 4 locations.

Further, 2 PHCs have been started at Waghai and Chhapi during FY 22 and 3 PHCs have been started at Dediapada, Naswadi and Radhanpur during FY 23. Regular OPDs are conducted at Waghai, Dediapada and Chhapi while weekly OPDs are conducted at Naswadi and Radhanpur. In FY 23, more than 14,000 OPDs had been carried out across these PHCs.

These PHCs will be scaled up appropriately in future depending on feedback as well as demand of health care services from the respective local population.

I n FY 23, more than 1,00,000 OPDs had been carried out across all 9 centres. Cumulative OPDs are more than 4,00,000 till March 31, 2023 across these centres.

â¢ Other Allied Initiatives: Counselling and Support was provided to rural adolescent girls around SUGEN, Dahej & Indrad centres covering menstrual hygiene and sanitation, by providing sanitary napkins absolutely free of cost to the beneficiaries. This has resulted in reducing prevalent social taboos and ultimately increasing confidence and self-esteem amongst beneficiaries.

During the year, based on encouraging feedback of pilot experiment for biodegradable and reusable sanitary napkins, more than 27,000 beneficiaries of 615 villages have been switched over to such napkins. More than 7,800 beneficiaries of 167 villages were enrolled and provided regular sanitary napkins on monthly basis.

More than 35,000 beneficiaries have been covered in 800 villages across SUGEN, Dahej & Indrad centers. More than 28,000 beneficiaries of 633 villages have been switched to Bio-degradable reusable sanitary napkins.

â¢ Community Healthcare: Post COVID-19, the OPD and day care clinic âSumangalâ, part of the ''Rangtarang'' hospital complex, has also been scaled up and caters to the communities and villages around. The footfalls at âSumangalâ are now about 300 patients per day. Cumulatively, more than 3,92,000 OPD has been carried out till March 2023. Services being provided include ENT, Dental Care, Physiotherapy, Pathology and Radiology facilities and special consultations in ophthalmology, dermatology, gynaecology etc.

â¢ UNM Children Hospital: Previously known as Balsangam, the hospital underwent a name change to UNM Children Hospital in October 2022. Towards expanding its operations, the focus has been to offer regular as well as complex surgeries.

I n FY 23, more than 44,000 OPD consultations for children were done culminating into an average of 142 per day as opposed to 37 average per day in FY 22. More than 1,400 IPD cases handled during the year.

A total of 209 patients were served through the Neo-natal ICU (NICU) and Paediatric ICU (PICU) for their critical conditions. Looking to the continuous growing need, the capacities of the NICU and PICU were enhanced in February 2023.

The Hospital handled more than 780 surgeries in FY 23, which included major and supra-major operations.

Facilities and services offered under UNM Children Hospital have been enhanced to cover paediatric super specialities like Ophthalmology, Orthopaedic, Neurology, Plastic surgery, Endocrinology, Haematology, and Pulmonology. The number of visiting Doctors in FY 23 have been increased to 27 covering a total of 14 speciality disciplines.

To spread awareness of the hospital, various camps were organized in village schools and temples, targeting areas with less healthcare facilities like Vankal (Mangrol), Sutharvada, Kalwada (Near Valsad), Kamrej, Vyara etc. Team of Doctors screen children and provide treatment. In appropriate cases, counselling is also provided to them. Awareness campaign have also been done via newspapers, leaflets distribution, radio advertisement, hoardings, community meetings.

Through Founder''s Day documentary and video clip regarding Hospital subsequently circulated, we could reach out to patients from Pan India and have recorded 157 patients coming to the hospital for treatment, of which 25 were operated upon in our Hospital.

2) Shiksha Setu: Project Shiksha Setu which literarily means âbridging educationâ aims at reducing the gap in teaching-learning processes in the classroom. Phase 1 of the project was launched in the year 2011 focusing on the integration of technology in the classroom. The project covered 21 schools for language and math subjects. Phase 2 of Project Shiksha

Setu continued focusing on technology integration in 13 schools for five subjects from the year 2016 to 2019. The sudden outbreak of Covid-19 resulted in school closure for almost two academic years. Students'' learning levels were impacted severely. In addition to technology integration in the classroom, UNM Foundation launched Shiksha Setu Phase 3 in August, 2021 focusing on universal age-appropriate reading and arithmetic competencies amongst students from grades 3 to 8, and employable skills for the youth and women. Following are the programs being implemented in phase 3 of Project Shiksha Setu.

Learning Enhancement Program (LEP): LEP program aims at universalization of age appropriate reading and arithmetic competencies amongst children form grade 3 to 8. Students who are not able to read are provided remedial support by Pratham Education Foundation. More than 3000 children have been reached during the FY 2022-23. Considering the feedback from the teachers and principals, UNM Foundation modified the strategy and introduced 19 âShikshaMitraâ, volunteers from the community to provide continuous support to the students as a pilot. This led to higher number of children who could able to read. In order to understand misconceptions amongst students especially in mathematics subject, UNM Foundation initiated a pilot project âSuGanitamâ. Students from grade 6 to 8 were assessed on various learning indicators in math subject in five schools. Common misconceptions were identified. UNM Foundation developed various teaching Learning material and worksheets. School teachers followed the strategies suggested by UNM Foundation.

E-Learning Project: UNM Foundation continued with E-Learning Program at 10 schools. Schools are provided digital content along with 20 smart classes and 37 student labs. Three Field Technical Supervisors were deputed to provide onsite support to the schools. UNM Foundation has conducted third party impact assessment study of the E-Learning project phase 2. Impact Assessment Report of the same is enclosed with the CSR Annual Report FY 2022-23.

Second Chance Program (SCP): Aiming to support dropout students to complete grade 10, UNM Foundation launched Second Chance Programme in August, 2021 at Chhatral cluster. The students were enrolled in National Institute of Open Schooling. Learning classes were organized in the community throughout the year. 66 students successfully passed the examination in the academic year 2021-22. 78 students have enrolled for academic year 2022-23. Life skills sessions and career counselling sessions

were also facilitated with the objective to help student nurture critical thinking, decision making and inculcate aspirations.

Vocational Training Program (VTP): UNM Foundation launched Vocational Training Program in August 2021 to enhance employable skills of youth and women in the Chhatral cluster. More than 320 students were provided vocational skills in different trades like General Duty Assistant, Data Entry Operator, Sewing Machine Operator and Domestic Electrician. 85 plus youth have been provided job opportunities. Many women who were trained on Sewing Machine Operator are now self-employed in their vicinity. UNM Foundation carried out a need assessment cum skill gap study during FY 23. The study covered more than 100 small and medium industrial units to find out technical skills they require in the Chhatral GIDC. UNM Foundation has planned to introduce technical courses like Welder & Fitter for the youth and advanced Sewing Machine Operator trade for women in FY 24.

3) Pratiti-Development and Maintenance of Public Parks:

The PRATITI initiative is supported & funded by the UNM Foundation, and all the gardens are designed and developed with a mission to provide the best environmental conditions to live in, by providing the citizens with recreational areas by creating parks, gardens, ponds, and lakes near their neighbourhood with reduced level of air and noise pollution by improving micro-alignment at the city level, and to recharge groundwater through ponds and lakes.

The Company along with one of India''s best known landscape design firms developed an approach for development of urban public parks. In Ahmedabad, six small sized parks measuring approx. 33,000 sq. mt. have been fully developed and opened for public use during FY19, one small sized park admeasuring 740 sq. mt. was fully developed and opened for public use in FY21 and one large sized park (Victoria Garden) measuring approx. 28,300 sq. mt. was also fully developed and opened for public use in FY22. One more large sized park (Parimal Garden) measuring approx. 36,700 sq. mt. was fully developed and opened for public use in FY23. In Ahmedabad, total 9 nos. of parks measuring more than 98,000 sq. mt. area were fully developed and opened for Public use in last five years. In Surat, the development of Ravi Shankar Maharaj Garden (RSG) measuring approx. 5,700 Sq. mt. and Jyotindra Dave (JDG) measuring approx. 29,000 Sq. mt. are under progress and the development of Lake View Garden measuring approx. 28,600 Sq.mt. to be commenced soon. Maintenance of these public parks is also funded from CSR Contribution of the Company.

4) Sanskardham Equestrian Center: Gujarat historically has been known for horses and horsemanship. Some of the best indigenous horses of the country are raised in both rural and urban Gujarat. This innate and energetic passion for horses can catapult into medals and laurels for the nation at The Olympics, The Commonwealth Games and other World Level Equestrian Competitions.

While Gujarat may have a cultural inclination towards horsemanship, till now the infrastructure was lacking to be able to train the children to make the champion equestrian sportsmen and sportswomen. Gujarat required a world class academy which offers top horses, training areas and the best coaches to groom the children of Gujarat for equestrian sports and more specifically, the three Olympic equestrian disciplines:

1. Dressage

2. Show Jumping

3. Eventing

A plan is being set to harness the equestrian spirit of Gujarat and it is initiated by building the Sanskardham Equestrian Center facility which bring the results in the 2036 Olympics.

Infrastructure Development at Sanskardham Equestrian Center are Riding Arena, Round Yard, Renovation of Stables, New thoroughbred riding horses, Hiring of staff, Beautification of the facility with new Signage Systems, Saddlery & Equipment for children and instructors, Staff Rooms and Feed & Equipment Rooms.

Skill Development being done through Sanskardham Equestrian Center as Hiring of Coaches & Staff, Systems & Process, Staff Training, Feed Program Set Up, Veterinary Guidelines, Safety Guidelines and Training programs for students.

Facilities at Sanskardham Equestrian Center in Phase 1 includes three main disciplines i.e., Riding, Show Jumping and Dressage.

Plan in brief for Phase 2: Create entirely new infrastructure and thereby increase capacity of the equestrian center. With increased enrolment, 40 students can be trained and top students are to be given specialized training for equestrian competitions in the Olympic equestrian disciplines of horse riding, jumping and dressage.

5) Shardashish School: The Company has earmarked donation of I 15 Crore during FY23 and FY24 (I 6 Crore donated in FY20) to UNM Foundation for construction of new school building and related infrastructure at Shardashish School situated in the premises of

AMGEN Power Plant''s housing colony at Sabarmati in Ahmedabad. Nearly 532 students came to this school from economically disadvantaged background, mainly from Sabarmati slums. The new school building will cater facilities like Tutorial room, Computer room, Smart room with Projector, Laboratory, Library, Assembly Hall, additional new classes, Kids play zone, Music room, etc.

The Company spent I 16.23 Lakh during FY 23 to fund the deficit in the school expenditure in excess of government grants. The amount is provided by way of contribution to Amdavad Vidyut Kelavani Samaj, the sponsor trust.

In addition to above, the Company continued other social activities during the year, as described hereunder:

â¢ Differently abled persons (with impaired hearing and speech) are provided employment once trained for routine cleaning of solar panels at GENSU power plant, thus providing them a dignified livelihood. Bus facilities was extended for their daily commute to work.

â¢ Employment opportunities for uneducated and destitute locals for horticulture, house keeping and canteen work at industrial and office facilities have been a continuous source of goodwill amongst the neighbouring villages.

The Report on CSR activities is annexed herewith as Annexure - C.

Donations

The Company has made donations amounting to I 19.91 Crore towards various organisations engaged in activities related to healthcare, education, arts & culture, science, sports, relief to disaster victims; socio-economic development including skill development, self-help groups, upliftment of women, integrated development of tribes, protection of consumer rights, building of toilets etc.

16. ENVIRONMENT, HEALTH AND SAFETY (EHS)

The Company accords utmost importance to EHS in its various operations. The key developments concerning EHS during FY23 include:

â¢ Integrated Management System (IMS) was implemented to ensure a safe, healthy and environmental friendly working which includes Quality Management System (QMS) (ISO 9001:2015), Environment Management System (EMS) (ISO 14001:2015), Occupational Health and Safety Standard (ISO 45001:2018), Energy Management System (EnMS) (ISO 50001:2018), Asset Management

System (AMS) (ISO 55001:2014) at SUGEN, GENSU, DGEN Power Projects, Ahmedabad, Surat, Dahej, Bhiwandi, Shil, Mumbra, Kalwa and Agra Distribution units, Information Security Management System (ISMS) (ISO 27001:2013) at SUGEN and DGEN and were periodically certified with surveillance audit by TUV India. IMS was also implemented in seven newly acquired RE Sites which includes Quality Management System (QMS) (ISO 9001:2015), Environment Management System (EMS) (ISO 14001:2015), Occupational Health and Safety Standard (ISO 45001:2018) and was successfully audited by TUV India and have been recommended for IMS Certification. Now all 19 sites of RE are IMS certified. Bhiwandi''s Meter Testing Lab. received NABL Accreditation for Testing in May 2022 & NABL Accreditation for the calibration renewed for further period of 2 years in September 2022.

â¢ The Company''s residential townships, Shardashish at SUGEN Mega Power Project and Meghdhanush at DGEN Mega Power Project have implemented and maintained township management systems with International Standards of Environment Management System (EMS) (ISO 14001:2015) and Occupational Health and Safety Management Standard (ISO 45001:2018) and are periodically certified with surveillance audit by TUV India. Meghdhanush township of DGEN Mega Power Project is also certified with Platinum certification by Indian Green Building Council (IGBC) under IGBC Green Residential Societies Rating valid up to 2023.

â¢ SUGEN and DGEN Mega power projects have received QCFI and JUSE re-certification in FY23 for Five-S Workplace Management System. SUGEN and DGEN Mega power projects have maintained and excelled in workplace management with implementation of Five S and are awarded Gold Trophies for FY23 by Quality Circle Forum of India (QCFI) under Ankleshwar Chapter Convention of Quality Concept (ACCQC-22) for Kaizen and Five-S categories respectively. Management is determined to enhance it further by implementation of other reputed standards of business excellence. In recent, management had initiated for the deployment of reputed EFQM model.

â¢ A mobile based software application FRO (Field Round Observation) has been implemented across the sites to enhance safety performance of all RE sites by capturing Safety, Quality and 5S observations in the system during field rounds of sites. A uniform safety activity calendar has been implemented for all RE sites to ensure all safety related planned activities are timely completed as per the schedule at all sites. Safety initiatives like; internal audit, workplace safety surveys, periodic inspection of tools and tackles, internal / external mock drills for strengthening emergency preparedness, campaign for encouraging near-miss-reporting, first aid training, daily tool box talk, basic training on electric safety and its hazards etc. were taken throughout the year by RE site teams for positive engagement of work force in safety to further enhance safety culture. Safety weeks were celebrated with participation from ground level workforce, awards were given to identified best safety performers to develop a culture based on sound safety system.

â¢ AMGEN developed online application with help of IT team for maintaining & effective compliance monitoring for safety related observation. Safety commitment yearly drive with the theme of âSafety starts with meâ to emphasise safety ownership and to further strengthen workplace safety to eliminate any potentiality of safety incidents. Several Safety related programmes and celebrations, such as national safety week, road safety week, electrical safety week, and national fire services day, to engage all levels of relevant stakeholders and create a vibrant and motivating environment for safety within AMGEN.

â¢ SUGEN Mega Power Project has continued to record no reportable Lost Time Accident (LTA) in FY23. SUGEN achieved 11.01 million LTA free manhours up to March, 2023 i.e., ~10.2 Years of reportable accident-free days. DGEN Mega Power Project has continued to record no reportable Lost Time Accident FY23. DGEN achieved 4.65 million LTA free manhours up to March, 2023 i.e., ~ 7.5 Years of reportable accident-free days. Renewable sites have achieved ''reportable Lost Time Accident free'' of 6.5 million Hours as on March 31, 2023.

â¢ The Company is committed to its core value âpassions for excellenceâ and in continuation of journey of excellence, in FY 22-23, Torrent Power Limited -Surat & Dahej has successfully implemented 5S Workplace Management System at the Central Warehouse at Surat Unit and whole Dahej Unit and achieved certification of JUSE (Union of Japanese Scientist and Engineers). Subsequently, Surat and Dahej Units had participated in the 36^th National Convection on Quality Concept organized by OCFI-Aurangabad Chapter in December 2022. In this, case study of successful implementation of 5S workplace management system was represented by both the Units and this was appreciated with certification of A-par Excellence. Management is determined to enhance it further by implementation of other reputed standards of business excellence. In recent,

management had initiated for the deployment of reputed EFQM model.

â¢ SUGEN Mega Power Project has implemented various environment conservation initiatives such as organizing stakeholders awareness sessions on environment related topics and Environmental Laws / Legal Compliances / Sustainable Approach, routing of SUGEN Pretreatment water plant and Circulating water pump house roof drains to collect rain water to systems and reuse of Circulating water pump house drainage water into cooling tower makeup, replacement of ODS refrigerant R-22 with alternate non ODS refrigerant R-438, Ammonia Leak sensors installation in Ammonia dosing containers, and process optimization of circulating water pumping system to reduce overall energy consumption and water savings on account of drift losses as well as unit cold start-up optimization without auxiliary steam.

â¢ SUGEN Mega Power Project has implemented various Safety Improvement initiatives such as installation and connection of fire water header pressure transmitter to DCS for continuous monitoring, use of empty IBCs as secondary collection trays, converting scrap frames to safely transport loose gas cylinders, replacement of SFU in Power Block HVAC units with MPCB, installation of cage type ladders for deep raw water line valve pits, reutilizing by shifting and commissioning of 2 X 5 m3 FRP tanks for PAC storage in SUGEN Raw water treatment.

â¢ DGEN Mega Power Project has further improved environment conservation initiative to collect the rain water in reservoir by constructing additional arrangements to route storm water drains. Rain/ Storm Water harvesting system was installed at GENSU which is being used for irrigation of periphery road plantation. Rain water harvesting facility has also been installed at TSU6PL solar site.

â¢ DGEN Mega Power Project has implemented various safety initiatives like platform railing modification for safe maintenance of Motors in all HRSGs, Provision of control supply from upstream of emergency supply to prevent emergency shutdown of HVAC panel in 00UCA, Modification of power control center air conditioner drain line to avoid water carryover to electrical panels, Overflow line of Chemical storage tanks is kept open and extended up to the ground level in the dyke area with NRV to avoid catastrophic failure of the tank, One of the DM tanks is kept under dry preservation with dehumidifier, Partial replacement of the HRSG water is started during FSNL trial to keep the

steam/water system in momentum/circulation or to avoid stagnancy.

â¢ AMGEN had implemented a Safety Kiosk with customized videos to improve worker safety training and competency evaluation. Tool Box Talks were strengthened further by incorporating audits and cross-functional witnesses, including seniors. Robust annual shut down safety system with practical safety gallery for effective tool box talks, 24 X 7 safety monitoring by cross function team and third party safety team for ensuring zero safety related incidents. Continued focus on safety initiatives like; workplace safety surveys, periodic inspection of tools and tackles, unit level and department level mock drills, table top exercises, practical operation training for using fire extinguishers. Online daily Tool Box Talk is conducted with participation from RE site team and senior leadership.

â¢ Ahmedabad Distribution Unit has implemented Safety initiatives like roll-out of EHS Life Saving Rules Posters, EHS engagement session with Licensed Electrical Contractors, workplace EHS audits, periodic inspection of tools and tackles, mock drills for strengthening emergency preparedness, campaign towards Road Safety Week/National Safety Week/Electrical Safety Week/ World remembrance Day/ Energy Conservation Day/ Environment Day; training on reptile awareness, work at height-scaffold inspector, road safety & defensive driving were taken throughout the year for positive engagement of work force to further enhance safety culture. Safety improvement initiatives such as use of Vertical Fall Arrestor System for EHV tower, U-guard fitting on two wheeler towards road safety during kite flying season, development of snake & ladder game based road safety handout, EHS awareness booklet.

â¢ 16432 man-hours training and 172 mock drills were conducted across the RE sites in FY 2022-23. Specialized training programs were organised as per GWO(Global Wind Organisation) standard including Work at Height, Basic First Aid, Fire Safety Awareness, Active and Passive Height Rescue and Manual Handling for reducing risk during work in Wind Turbine Generator across RE sites. Specialized online training capsules were given to site team on electrical safety (10 Modules) & ensured effectiveness of training by training evaluation. Special training and attention were given to identify and close unsafe conditions and acts across RE sites. TBTs are conducted to mitigate safety risk in jobs. Specialized training programs on high-risk activities such as height work, lifting operations, hot works, confined space works were organized for identified company''s employees and contractor''s employee at Systematic Innovative School (SIS) of L&T-Hazira by Surat and Dahej Distribution Units.

â¢ Learning and development was undertaken throughout the year by organising training through external trainers on topics - First Aid training, Scaffold Erection Training, Scaffold Inspector Training, Electrical Fire Prevention training, Confined Space safety training aiming for enhanced Safety performance in work execution. Moreover, specific sessions such as diet control, Nutrition food for better health, heat related hazards, mental health, Ergonomics are conducted to develop consciousness amongst stakeholders and improve overall health performance at SUGEN and DGEN.

â¢ Torrent Power Aapne Dware & School Program on Electrical Safety & Energy conservation are conducted on regular basis.

â¢ Surat and Dahej Distribution units installed Insulated Busbar and Piranha Connectors in LV Mini Section Pillars in power theft prone area. Identification of the power theft prone area and Installation 10 Nos. of insulated connectors in LV Mini Section Pillars as a pilot project. Busbars are insulated, waterproof and theft proof and increased safety and reduced direct power theft. After installation of insulated connectors in September 2022, overall power theft of 176817 Units prevented from these LV Mini Section Pillars of insulated connectors in September 2022.

â¢ SUGEN and DGEN Mega Power Projects have continued Stakeholders engagement encouraging near-miss-reporting and EHS suggestions, Safety committee meetings and special forums such as Samanvay, quarterly publication of âSugEnSustâ environmental sustainability newsletter, implementing digital based application for reporting Safety Corrective Actions that provides ease of reporting safety observations also with use of mobile instrument thus improving safety management system by enhanced data collection, participation and data analysis.

â¢ AMGEN conducted comprehensive health check up for employees at OHU and Apollo Hospitals also conducted Yoga and Zumba sessions during International Yoga Day and Conducted Marathon (AMGETHON) for employees for 5 KMs and 10 KMs at the Sabarmati River Front, Ahmedabad. During the entire year, 34 health-related awareness

sessions pertaining to various diseases like lifestyle diseases, de-addiction from tobacco consumption, Ergonomics, mental health, HIV, prevention of lung diseases, the session on world health day, world diabetes day, world obesity day, First Aider training, special session on health and hygiene for women employees and contract workers. Health magazine âE-Health newsletterâ is published for the employees once a quarter.

â¢ Ahmedabad Distribution unit implemented safety improvement initiatives such as One-day followup audit carried out in September 2022 through British Safety Council on Five Star Occupational Health & Safety recommendations given during previous grading audit in March 2021. The 100% scoring elements increased from 18 to 41 & unit was appreciated for initiatives & management programs. Online health talks on common health problems; such as awareness about tobacco hazard , Cancer awareness, Leprosy day, HI V & AIDS awareness, hypertension, World kidney day, diabetes, health day, Yoga Therapy day, lifestyle diseases. Automated External Defibrillators are procure to overcome the medical emergencies (cardiac attack), AEDs are advanced equipment and provides medical life support system.

â¢ Actions taken to enhance safety in public domain and environment protection:

- Conversion of Oil Type DT to Dry type

- Use of Natural ester oil type distribution

transformer

- Conversion of Oil type RMU to SF6 RMU

- Identification and replacement of unsafe assets

- LT Panel, MSPs and meter boxes.

â¢ Surat and Dahej Distribution Units implemented Robotic Technology for the cleaning of the underground water tank. By this initiative, human intervention in the confined space had been eliminated. It also eliminated the waste of water as no need of emptying water tank. This has enhanced the human safety and saving of 9.30,000 litres of water. Installation of Roof top solar system with PV Capacity @32 KW at Varachha (E) PSC Building along with auto water sprinkler cleaning system. Approximately, 65000 units generation is expected with this system.

â¢ Safety precaution notices were published in local newspapers both in Bhiwandi and SMK. To raise awareness regarding safety a seminar was

organized for all vendor partners of Bhiwandi and SMK in October 2022. Safety awareness training is provided to contract workers at their premises. Safety Awareness training provided to one HT Consumer at their premises during national safety week. Safety poster competition during Celebration of National Safety Week. Safety awareness training is provided to contract workers at their premises. Defensive Driving Training by external faculty was conducted on March 8 and March 9, 2023. Various events organized for employees Celebration of fire service week (April 14 to April 20), Environment Day (June 5), Celebration of Road Safety Week (January 11 to January 17) Celebration of National Safety Week (March 4 to March 10). Letters were distributed to Ganesh Mandals for safe precautions to be taken during celebration of Ganeshotsav Festivals. Publicity campaigns were carried out in various localities and consumers were made aware of the safety measures to be taken. Public Awareness notices regarding maintaining maintenance of safe clearance from overhead conductors / lines were published in newspapers both in Marathi and Hindi languages. Installed Padlocks on all the 100% DTC & FSP to avoid any fatal / non-fatal incident inside DTC premises.

â¢ At Agra Distribution, Compressive Hazard Identification and Risk Assessment (HIRA) and Environmental Aspect and Impact Assessment of all the departmental operations, devising respective control measure, exploration of opportunities further enhancement Occupational Health and Safety and Environmental Sustainability Management System. Distribution units conducted Health check-up programme for all employees & special test like Audiometry test is mandated for all Call centre personnel and Color Vision test & Eye site test for all Drivers. Safety Training (Safety Management including electrical safety, Behavioural Based Safety, Road Safety First Aid and Animal Bite Prevention) were imparted to employees & external

service providers to inculcate safety as behavioural aspect of them.

â¢ To improve environmental sustainability, the concept of an environmental marshal was introduced, and a team comprised of representatives from various departments was formed to improve the plant environment and raise awareness at the department level. Celebration of world water day with aim to increase environment awareness and mass participation. Quarterly publication of the Environment Newsletter initiated for knowledge sharing and awareness improvement. Instead of replacing electronic cards, repaired/refurbished cards are used to minimize e-waste.

17. VIGIL MECHANISM

The Company has in place a Vigil Mechanism / Whistle Blower Policy pursuant to the applicable statutory requirements. The details of the Whistle Blower Policy are explained in the Report on Corporate Governance.

18. I NVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Sections 124 and 125 of the Act and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended from time to time, the Company has, during the year under review, credited unpaid / unclaimed Dividend to IEPF Authority and equity shares to the Demat account of IEPF Authority as per the details mentioned below:

Financial Year	Unpaid / Unclaimed Dividend transferred (in K)	No. of equity shares transferred
2014-15 (Final)	51,17,620.50	40,447
2014-15 (Final) of	3,08,387.00
erstwhile Torrent Cables
Limited

19. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

As stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility and Sustainability Report (BRSR) forms part of the Integrated Annual Report.

20. RISK MANAGEMENT

21. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The particulars of contracts or arrangements with the related parties are given in the prescribed Form AOC-2, annexed herewith as Annexure - D and in the section on the Related Party Transactions in the Report on Corporate Governance.

22. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The details in terms of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, are forming part of this Report as Annexure - E.

23. PROTECTION OF WOMEN AGAINST SEXUAL HARASSMENT AT WORKPLACE

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

24. THE EXTRACT OF THE ANNUAL RETURN

In terms of Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company https://www.torrentpower. com/pdf/investors/FormMGT7 20230620183121.pdf

25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The details relating to conservation of energy, technology absorption, foreign exchange earnings and outgo prescribed under Section 134(3)(m) of the Act read with Companies (Accounts) Rules, 2014 are given in the Annexure - F, which forms part of this Report.

26. OTHER DISCLOSURES

â¢ During the year under review, the Company has neither accepted nor renewed any fixed deposits.

â¢ During the year under review, there are no changes in the nature of business.

â¢ There are no material changes and commitments affecting the financial position of the Company, which has occurred between end of Financial Year i.e. March 31, 2023 and the date of Directors'' Report i.e. May 29, 2023.

â¢ No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operation in future.

27. APPRECIATION AND ACKNOWLEDGEMENTS

The Board of Directors is pleased to place on record its appreciation for the continued support received from all stakeholders including government, regulatory authorities and financing institutions. The Board is thankful to the Members and employees for their unstinted support and contribution.

For and on behalf of the Board of Directors Samir Mehta

May 29, 2023 Chairperson

Ahmedabad DIN: 00061903

Mar 31, 2022

Your Directors are pleased to present Eighteenth Annual Report of the Company together with the Audited Financial Statements for the Financial Year ended March 31, 2022.

1. OPERATIONAL & FINANCIAL HIGHLIGHTS

The Management Discussion and Analysis Report for FY22 is part of the Integrated Annual Report and explains the operating and financial performance of the business for the year.

Summary of the Financial Statements of the Company for the year under review is as under:

(t in Crore except per share data)
Particulars	Standalone		Consolidated
	Year ended March 31, 2022	Year ended March 31, 2021	Year ended March 31, 2022	Year ended March 31, 2021
Total income	14,012	12,027	14,493	12,314
Profit before tax and exceptional items	1,814	1,583	1,864	1,552
Exceptional Item	1,300	-	1,300	-
Profit before tax	514	1,583	564	1,552
Total comprehensive income for the year (after non-controlling interest)	412	1,328	456	1,295
Add: Balance brought forward	5,908	4,775	5,841	4,741
Balance available for appropriation	6,320	6,103	6,297	6,036
Appropriations
Transfer to / (from) specific reserves	(77)	(69)	(46)	(69)
Dividend paid	697	264	697	264
Balance carried to balance sheet	5,700	5,908	5,646	5,841
Basic and diluted earnings per share (T per share)	9	28	9	27

2. DIVIDEND

As per Dividend Distribution Policy, the Company endeavours to distribute approx. 40% of its consolidated annual profits after tax as dividend in one or more tranches. The Board of Directors, on February 03, 2022, declared interim dividend of T9.00 per equity share on 48,06,16,784 nos. of equity shares for FY22 [PY T11.00 per equity share, including final dividend]. The Board has not considered any further dividend for the year.

The total outflow on account of dividend is T432.56 Crore [PY T528.68 Crore] i.e. 93.92% [PY 40.67%] of consolidated total comprehensive income for FY22.

The Dividend Distribution Policy of the Company can be accessed at the Company''s website: https://www.torrentpower.com/pdf/investors/ DividendDistributionPolicv.pdf

Issuer

Description of NCDs

Date of Allotment

Number of NCDs issued

Face Value and Issue Price (3 in Lakh)

Amount raised (3 in Crore)

Coupon Rate (p. a.)

Maturity Date (Series wise)

Torrent

Power

Ltd.

Secured, Rated, Listed, Taxable, Non-Cumulative, Redeemable NCDs

March 03, 2022

2,500

250

7A : 6.50% 7B : 6.90% 7C : 7.25%

7A : March 3, 2025 7B : March 3, 2026 7C : March 3, 2027

3. TRANSFER TO RESERVES

The Company has not transferred any amount to the General Reserve for the year under review, other than f1.91 Crore to certain specific reserves, as described in the Statement of Changes in Equity being part ofthe Standalone Financial Statements. Further, an amount of ?78.96 Crore has been transferred from Debenture Redemption Reserve to Retained Earnings pertaining to partial redemption of debentures during the year under review.

4. FINANCE

During the year under review, CRISIL upgraded the longterm rating of the Company from AA/Positive to AA / Stable and reaffirmed short-term credit rating of the Company at A1 . India Ratings has reaffirmed short term rating at IND A1 to the Commercial Paper Programme of the Company. CRISIL has also upgraded long term rating of the Non-Convertible Debentures (NCDs) issued by Jodhpur Wind Farms Private Limited and Latur Renewable Private Limited, Wholly Owned Subsidiaries of the Company, from AA(CE)/Positive to AA (CE)/Stable, which has resulted in decrease in Coupon rate from 7.00% to 6.75% from the date of rating upgrade.

Finance cost of the Company (on a consolidated basis)

Outstanding consolidated long term debt as on March 31, 2022 was ?8,414 Crore (Refer Note 23 to the Consolidated Financial Statements). Consolidated debt to equity (including deferred tax liability) ratio as at the end of FY22 was 0.83 (Previous Year: 0.73). The particulars of loans given, guarantees provided and investments made during the year are disclosed in Note 56 to the Standalone Financial Statements.

The Company, being an infrastructure company, is exempt from the provisions as applicable to loans, guarantees, security and investments under Section 186 of the Companies Act, 2013 (âthe Actâ).

5. SUBSIDIARIES AND ASSOCIATES

The Board has reviewed the affairs of the Company''s Subsidiaries and Associates at regular intervals. In accordance with Section 129(3) of the Act, the Company has prepared Consolidated Financial Statements incorporating the Financial Statements of all Subsidiaries and Associates, which form part of the Integrated Annual Report. Further, a statement containing salient features of the Financial

was reduced to ?628 Crore as against ?776 Crore in FY21. This is mainly due to lower debt and reduction in interest rates.

During the year under review, the Company has,

i. tied up incremental working capital lines (non-fund based) of ?700 Crore i.e. total working capital limits increased from ?3,950 Crore to ?4,650 Crore;

ii. tied up ?700 Crore in the form of Capex LC facility for 115 MW Wind Power Project being implemented through Subsidiary;

iii. availed ?600 Crore of long-term loan to finance capital expenditure for its distribution business;

iv. raised ?250 Crore of new long-term loan and ?250 Crore by way of issuance of secured NCDs, mainly to repay part of its existing debt and towards General Corporate Purpose of the Company;

v. increased Long term loan of the Company by ?605 Crore pursuant to acquisition of Surya Vidyut Limited and LREHL Renewables India SPV 1 Private Limited; existing debt under the entities.

The Company has repaid long term debt of f1,125 Crore (including prepayments of ?235 Crore).

New long-term debt raised by the Company by issuance of NCDs on private placement basis are mentioned below:

Statements of the Company''s Subsidiaries and Associates is given in prescribed Form AOC-1, which forms part of the Integrated Annual Report (Refer page no. 414).

The said Form also highlights the financial performance of each of the Subsidiaries and Associates included in the Consolidated Financial Statements.

The details pertaining to the Companies that have become or ceased to be the Subsidiary or Associate of the Company during the year are provided in Note no. 41 to the Consolidated Financial Statements, forming part of the Integrated Annual Report.

In accordance with Section 136 of the Act, the Financial Statements of the Company, Consolidated Financial Statements alongwith separate Audited Financial Statements in respect of Subsidiaries and Associates are available for inspection by the Members at the Registered Office of the Company during the business hours on all working days. Any person desirous of obtaining the said Financial Statements may write at [email protected]. The Integrated Annual Report of the Company and Audited Financial Statements of

each of the Subsidiaries and Associates have been placed on the website of the Company at www.torrentpower.com.

6. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

Sunaina Tomar, IAS, Director (DIN: 03435543) tendered her resignation from the Board of the Company consequent to her transfer from the position as Additional Chief Secretary, Energy & Petrochemicals Department and appointment to the position as Additional Chief Secretary, Social Justice and Empowerment Department, Government of Gujarat. The Board has taken her resignation on record effective from June 15, 2021 and placed on record its appreciation for the valuable services rendered by Sunaina Tomar, IAS during her tenure as a Director of the Company.

Government of Gujarat nominated Mamta Verma, IAS (DIN: 01854315) - Principal Secretary, Energy and Petrochemicals Department on the Board of the Company in place of Sunaina Tomar, IAS, and the Board, at its Meeting held on August 06, 2021, appointed her as Additional Director of the Company w.e.f. August 07, 2021 till the commencement of ensuing Annual General Meeting (the AGM). The Board hereby recommends her appointment as Director, liable to retire by rotation, w.e.f. the ensuing AGM i.e. August 08, 2022.

The Members, at their 17^th AGM held on August 06, 2021, approved appointment of Usha Sangwan (DIN: 02609263) as an Independent Director of the Company for a period of 5 consecutive years w.e.f. May 21, 2021 till May 20, 2026 (both days inclusive), not liable to retire by rotation.

The Board, at its Meeting held on August 06, 2021, appointed Radhika Haribhakti (DIN: 02409519) as an Additional Director (Non-Executive Independent) of the Company w.e.f. August 07, 2021 till the commencement of the ensuing AGM. The Board hereby recommends her appointment as an Independent Director for a period of 5 consecutive years from August 07, 2021 till August 06, 2026 (both days inclusive), not liable to retire by rotation. In the opinion of the Board, she possesses requisite expertise, integrity and experience (including proficiency) for appointment as an Independent Director of the Company.

Bhavna Doshi (DIN: 00400508) and Dharmishta N. Raval (DIN: 02792246) completed their second and final term as an Independent Directors of the Company on September 30, 2021. The Board placed on record its appreciation for their valuable contribution during their tenure as Independent Directors of the Company.

The Board, at its Meeting held on May 10, 2022, appointed Ketan Dalal (DIN: 00003236) as an Additional Director (NonExecutive Independent) of the Company w.e.f. May 11, 2022 till the commencement of the ensuing AGM. The Board hereby recommends his appointment as the Independent Director for a period of 5 consecutive years from May 11, 2022 till May 10, 2027 (both days inclusive), not liable to retire by rotation. In the opinion of the Board, he possesses requisite expertise, integrity and experience (including proficiency) for appointment as an Independent Director of the Company.

The Board had further at their aforesaid Meeting, subject to the approval of the Members, re-appointed Samir Mehta (DIN: 00061903) as Chairman of the Company for a period of 5 years and Jinal Mehta (DIN: 02685264) as Managing Director of the Company for a period of 5 years effective from April 01, 2023.

As per the provisions of the Act, Samir Mehta (DIN: 00061903), Director, retires by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment.

A brief resume and other relevant details of the Directors proposed to be appointed / re-appointed are given in the Explanatory Statement to the Notice convening the AGM.

7. DECLARATION BY INDEPENDENT DIRECTORS

8. POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION POLICY

The Nomination and Remuneration Committee (âthe NRCâ) has approved following criteria and process for identification/ appointment of the Directors:

Criteria for appointment:

i. Proposed Director (âPersonâ) shall meet all statutory requirements and should:

â¢ possess the highest ethics, integrity and values

â¢ not have direct / indirect conflict with present or potential business / operations of the Company

â¢ have the balance and maturity of judgment

â¢ be willing to devote sufficient time and energy

â¢ have demonstrated leadership and vision at senior levels, and have the ability to articulate a clear direction for the Company

â¢ have relevant experience with respect to Company''s business (in exceptional circumstances, specialisation / expertise in unrelated areas may also be considered)

â¢ have appropriate comprehension to understand or be able to acquire that understanding

- relating to Corporate Functioning

- concerning the scale, complexity of business and specific market and environmental factors affecting the functioning of the Company

ii. The appointment shall be in compliance with the Board Diversity Policy of the Company.

11. DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 134(3) of the Act, the Board of Directors states that:

a. in preparation of the Financial Statements, the applicable accounting standards have been followed and there are no material departures;

b. the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2022 and of the profits for the year ended March 31, 2022;

d. the financial Statements have been prepared on a going concern basis;

e. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

12. AUDITORS

STATUTORY AUDITORS

The Members at 13^th AGM of the Company had appointed M/s. Price Waterhouse Chartered Accountants LLP (PWC) as the Statutory Auditors of the Company to hold office from the close of 13^th AGM till conclusion of 18^th AGM.

The first term of five years of PWC as Statutory Auditors of the Company will be completed at the ensuing AGM and they are eligible for re-appointment. They have furnished a certificate regarding their eligibility for re-appointment as Statutory Auditors of the Company, pursuant to Section 139(1) of the Act read with relevant Rules. The Board of Directors recommends their re-appointment for another five years i.e. from conclusion of 18^th AGM till the conclusion of 23^rd AGM.

The Auditors'' Report for FY22 forms part of the Integrated Annual Report and does not contain any qualification, reservation or adverse remark.

Process for Identification / Appointment of Directors:

i. Board members may (formally or informally) suggest any potential person to the Chairperson of the Company Meeting the above criteria. If the Chairperson deems fit, necessary recommendation shall be made by him to the NRC.

ii. Chairperson of the Company can himself also refer any potential person Meeting the above criteria to the NRC.

iii. The NRC will process the matter and recommend such proposal to the Board.

iv. The Board will consider such proposal on merit and decide suitably.

Remuneration Policy:

The Company has in place a policy relating to the remuneration of the Directors, KMP and other employees of the Company. The policy is available on the website of the Company at https://www.torrentpower.com/pdf/ investors/Remuneration Policv.pdf.

9. EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The evaluation of the Board, its Committees and Individual Directors was carried out as per the process and criteria laid down by the Board of Directors.

The proforma formats for facilitating the evaluation process of the Non-Independent Directors and the Board as a whole and the Committees were sent to all the Non-Executive Directors (except Promoter Director). A presentation on functioning of the Board and the Committees, containing the outcome of their evaluation and feedback was reviewed by the Independent Directors in their separate Meeting and by the Board. Based on the feedback, the Board expressed satisfaction on overall functioning of the Board, the Committees and performance of the Directors.

10. MEETINGS OF THE BOARD, COMMITTEES & COMPLIANCE TO SECRETARIAL STANDARDS

The Board meets at regular interval, with gap between two Meetings not exceeding 120 days. During the year under review, the Board met five times.

The Board has six committees namely Audit Committee (AC), Nomination and Remuneration Committee (NRC), Corporate Social Responsibility and Sustainability Committee (CSRSC), Stakeholders Relationship Committee (SRC), Risk Management Committee (RMC) and Committee of Directors (CoD). A detailed note on the composition of the Board and its Committees (AC, NRC, SRC and RMC) is provided in the Corporate Governance Report, forming part of the Integrated Annual Report. Composition of CSRSC is given in the Report on CSR Activities (Annexure C). CoD is a Board Committee to facilitate routine executive decisions and exercise of authority granted by the Board in various matters. The Minutes of the Committee Meetings are reviewed at by the Board at the Board Meeting.

COST AUDITORS

Pursuant to Section 148(3) of the Act, M/s. Kirit Mehta & Co., Cost Accountants, Mumbai had been appointed as the Cost Auditors of the Company for FY22 by the Board of Directors for conducting audit of cost records maintained in respect of electricity. Their remuneration was ratified by the Members at 17^th AGM of the Company.

The Cost Audit Report for FY21 does not contain any qualification and was filed with the Central Government (within the prescribed time limit) on August 23, 2021 pursuant to Section 148(6) of the Act.

SECRETARIAL AUDITORS

Pursuant to Section 204 of the Act read with the Rules thereof, the Board of Directors had appointed M/s. M. C. Gupta & Co., Company Secretaries, Ahmedabad, as the Secretarial Auditors of the Company for FY22. The Secretarial Audit Report for FY22 is annexed herewith as Annexure A.

There are no adverse observations in the Secretarial Audit Report which call for explanation.

13. INTERNAL FINANCIAL CONTROLS

14. CORPORATE GOVERNANCE

15. CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the year, the Company was required to spend f28.80 crore (2% of the average net profit of the past three financial years and surplus arising at implementing agency level from temporary investment of funds for FY21). The Company contributed to implementing agency ?28.60 Crore during the year. The total amount spent during the year was f19.66 Crore. Further, unspent amount of at the end of the year at the implementing agency level was transferred to âUnspent CSR Accountâ of related ongoing project. The CSR Activities undertaken by the Company were under the thrust areas of Community Healthcare, Sanitation & Hygiene, Education & Knowledge Enhancement and Social Care & Concern. The brief details of the major CSR activities are described hereunder:

REACH: Driven by the belief of Chairman Emeritus, Sudhir Mehta âChildren are the future of our nation and this future must be well preservedâ, the flagship CSR program of the Group âREACHâ - Reach EAch CHild was initiated in the year

2016 under the aegis of UNM Foundation (earlier known as

Tornascent Care Institute), a Section 8 Company. REACH

has three major pillars: (a) Grass Root Interventions (b)

Green Field Actions and (c) Other Allied Activities. Salient

achievements are:

â¢ Grassroot Intervention Model: it targets to establish baseline health status of children in age group of 6 months to 6 years, through medical camps in communities and villages surrounding the industrial establishments of the Group. In pre-covid period, 71,387 children in 351 villages have been screened. Appropriate treatment regime resulted in benefiting more than ~74% Malnourished children and more than ~90% Anemic children. About ~73% children having chronic illnesses were also provided appropriate treatment with encouraging outcomes.

During FY22, as second wave of Covid-19 ebbed, REACH program was extended to additional 649 villages starting from June, 2021, making total number of villages covered under REACH to 1,000. Anganwadi Model is followed in additional villages to identify and serve Malnourished children. 7,511 Malnourished Children have been provided with Mauji biscuits as special nutritional supplement. Till now 39% of children from additional villages have been treated out of malnourishment. Additionally, intensive Awareness activities about prevention of Malnourishment and Anemia is carried out including audio-visual film show in vernacular language.

â¢ Greenfield Actions: Healthcare services are provided to children up to 18 years. There are three Primary Pediatric Health Centers (PPHCs) with basic laboratory and day care facility at Dahej, Balasinor and Indrad, while fourth major center near SUGEN Power Plant has a 150 bed pediatric hospital âBalsangam'' which is part ofRangtarang'' hospital complex started in FY20. Till Date more than 3,25,000 patients have been treated under OPDs across all four centers since its inception in 2017. More than 40,000 OPD cases have been handled across all Locations in FY22.

Balsangam, a 150-bed state-of-the-art paediatric hospital is fully operational within the Rangtarang complex which also has Sumangal, a multi-disciplinary clinic for patients of all age groups. Activities at Balsangam, which were, affected during covid period, have been scaled up post pandemic at a fast pace from June, 2021.

Additionally, two more multi-purpose Satellite centers have been started at Waghai and Chhappi in Gujarat and three more would be started at Radhanpur, Naswadi and Dediapada, Gujarat. These multi-purpose Satellite centers will be scaled up appropriately in future depending on feedback as well as demand of healthcare services from the respective local population.

â¢ Other Allied Initiatives: Counseling and Support was provided to rural adolescent girls around SUGEN, Dahej & Indrad centers covering menstrual hygiene and sanitation, by providing free health and hygiene kits. This has resulted in reducing prevalent social

In addition to above, the Company continued other social activities during the year, as described hereunder:

Creating livelihoods:

â¢ There has been an ongoing endeavor to empower the youths hailing from immediate vicinity and reach out to the locals who are qualified and remaining unemployed due to limited job opportunities and Covid-19 pandemic. One of the major successes under this program has been identifying interested youths and imparting classroom and physical training for absorption as security guards. Training helps to make them competent and also empowers them to grow in their career. Post covid, training for a batch of 20 locals started in February, 2022 and another batch was started in April, 2022. Similar efforts are being made for jobs like Technicians, Healthcare Workers, Drivers, Horticulture and Housekeeping staff.

Community Healthcare: Post Covid-19, the day care clinic âSumangalâ which is a community health care clinic under the âRangtarang'' hospital complex, has also been scaled up and caters to the communities and villages around. The footfalls at âSumangalâ are now about 150 patients per day. Services being provided include ENT, Dental Care, Physiotherapy, Pathology and Radiology facilities and special consultations in ophthalmology, dermatology, gynaecology etc.

The Report on CSR activities is annexed herewith as Annexure C.

Donations

The Company has made donations amounting to ?27.30 Crore toward various social causes as detailed below:

â¢ f15.75 Crore to various organisations engaged in activities related to healthcare, education, arts & culture, science, sports, relief to disaster victims; socioeconomic development including skill development, self-help groups, upliftment of women, integrated development of tribes, protection of consumer rights, building of toilets etc.

â¢ f11.55 Crore to various charitable organizations to fight effects of COVID -19 pandemic and its fallout on poorer sections of the society.

taboos and ultimately increasing confidence and self-esteem amongst beneficiaries. Hygiene Kits were provided to total 14,000 Adolescent girls from all camp villages, between 11-18 years of age on monthly basis under this programme. Biodegradable and Reusable Sanitary Napkins were provided as a pilot project to solve issue of disposal and Initial feedback from the beneficiaries was encouraging.

Shiksha Setu: Phase-Mi of Shiksha Setu i.e. the Teaching and Learning Support Program, conducted through UNM Foundation, was initiated during FY22. The program covers 45 Government primary schools located near SUGEN power plant, Chhatral, Chhapi, Memadpur and Ahmedabad reaching out to 15,000 students and 480 teachers of 1^st to 8^th standard. Due to Covid, schools were closed for about two years which had adversely impacted student learning levels. Remedial classes for more than 4,000 Students from Grade 3^rd to 8^thwere organized to support students achieve basic reading and arithmetic skills. About 1,500 mothers'' were reached through mothers'' Engagement and School Readiness activities.

During the year âSecond Chanceâ programme was initiated at Chhatral cluster in Mehsana District of Gujarat aiming to support School dropout Students for clearing Grade 10^thexamination and enhance percentage of Students going for Higher Education / Vocational Training. Total 112 Students were enrolled in the Programme out of which 104 Students were mobilized and provided coaching for preparation of Grade 10^th examination. 93 Students appeared for Grade 10^th examination through National Institute of Open School out of which more than 70% students passed.

During the year âVocational Skills Development Programmeâ was initiated at Chhatral cluster in Mehsana District of Gujarat to enhance employable skills of Women and Youth. The Programme aims at enhancing employable skills of 300 Women and Youth and providing them employment opportunities. Total 100 Women and Youth were mobilized and trained on various skills viz. Sewing machine operator, Data entry operator, General duty assistant etc.

Pratiti-Development and Maintenance of Public Parks:

The Company along with one of India''s best known landscape design firm developed an approach for development of urban public parks. In Ahmedabad, six small sized parks measuring approx. 33,000 sq. mt. have been fully developed and opened for public use during FY19, one small sized park admeasuring 740 sq. mt was fully developed and opened for public use in FY21 and one large sized park measuring approx. 28,300 sq. mt. was fully developed and opened for public use in FY22. One more large sized park measuring approx. 36,700 sq. mt. is at advance stage of completion and will be opened for public in FY23 in Ahmedabad.

Moreover, three large sized parks measuring approx. 63,300 sq. mt. situated in the heart of Surat, Gujarat is under redevelopment. Presently, all three public parks are open for public use and maintenance of these public parks is also funded from CSR Contribution of the Company.

Shardashish School: The Company has earmarked Donation of f15 Crore during FY23 and FY24 (?6 Crore donated in FY20) to UNM Foundation for construction of new school building and related infrastructure at Shardashish School situated in the premises of Amgen Power Plant''s housing colony at Sabarmati in Ahmedabad. Majority of students are with economically disadvantaged background from nearby slum areas. The new school building will cater facilities like Tutorial room, Computer room, Smart room with Projector, Laboratory, Library, Assembly Hall, additional new classes, Kids play zone, Music room, etc.

16. ENVIRONMENT, HEALTH AND SAFETY (EHS)

The Company accords utmost importance to EHS in its various operations. The key developments concerning EHS during FY22 include:

â¢ Integrated Management System (IMS) was

implemented to ensure a safe, healthy and environmental friendly working which includes Quality Management System (QMS) (ISO 9001:2015), Environment Management System (EMS) (ISO 14001:2015), Occupational Health and Safety Standard (ISO 45001:2018), Energy Management System (EnMS) (ISO 50001:2018), Asset Management System (AMS) (ISO 55001:2014) at SUGEN, GENSU, DGEN power plants, Ahmedabad, Surat, Dahej, Bhiwandi Shil Mumbra Kalva and Agra Distribution units, Information Security Management System (ISMS) (ISO 27001:2013) at SUGEN and DGEN power plants and were periodically certified with surveillance audit by TUV India.

â¢ SUGEN Mega Power Project continued to excel, demonstrating an outstanding performance and commitment towards Health and Safety Management and has received Five Star rating under British Safety Council Five Star Occupational Health and Safety Audit and won âSword of Honorâ from British Safety Council. SUGEN also added several feathers in its cap for Health and Safety Management by receiving certificates from National Safety Council, India; FICCI, India; and International Safety Award, BSC.

â¢ SUGEN & DGEN Mega Power Project were awarded Gold Trophies for FY22 by Quality Circle Forum of India (QCFI) under Ankleshwar Chapter Convention of Quality Concept (ACCQC) for Kaizen and Five-S categories with implementation of Five S (Workplace Management System) respectively.

â¢ SUGEN and DGEN power plants have maintained âno reportable Lost Time Accident free'' as on March 31, 2022.

â¢ Residential townships: Shardashish at SUGEN power plant and Meghdhanush at DGEN power plant have implemented and maintained township Management systems with International Standards of Environment Management System (EMS) (ISO 14001:2015) and Occupational Health and Safety Management Standard (ISO 45001:2018) and were periodically certified with surveillance audit. Indian Green Building Council

(IGBC) has certified Meghdhanush with Platinum certification under IGBC Green Residential Societies Rating System valid upto 2023.

â¢ AMGEN power plant and Renewable sites has introduced Safety commitment yearly drive to strengthen workplace safety and to nullify any potentiality of safety incidents. To uplift the safety performance the Safety card system is extended for contractors also.

â¢ AMGEN power plant has developed inhouse system for tracking environment compliance by preparing Environment Annual planner with a dashboard for tracking routine as well as critical environmental activities & compliances.

â¢ Ahmedabad, Surat and Dahej distribution units have been awarded Five Star rating from British Safety Council for occupational health & safety practices.

â¢ Ahmedabad, Surat and Dahej distribution units has been awarded prestigious Sword of Honour & Globe of Honour by British Safety Council for its commitment to excellence in Occupational Health and Safety and Environmental Sustainability.

â¢ Establishments of Environment Policy, Sustainability Policy, Energy Policy and Sustainable Procurement Policy for Environmental Sustainability at Surat and Dahej distribution units.

â¢ Implementation of Compressive Hazard Identification and Risk Assessment (HIRA), Environmental Aspect and Impact Assessment of all the departmental operations, devising respective control measure, exploration of opportunities for further Enhancement Occupational Health and Safety and Environmental Sustainability Management System at Surat and Dahej distribution units.

â¢ Safety initiatives like workplace safety awareness, safety quiz, competition for Employees and Vendors, tackles for positive engagement of work force in safety, periodic inspection of tools and tackles, internal / external mock drills for strengthening emergency preparedness, campaign for encouraging near-miss-reporting, basic training on electric safety and its hazards were taken throughout the year to further enhance safety culture.

â¢ Precautionary measures during Monsoon, Diwali & other festivals were published in local newspapers of the Distribution units and relayed on FM radio for public awareness. Public awareness and campaigns for safety measures to be taken by the consumers was organised.

â¢ Safety improvement intitiatives such as use of immobilizer for Confined space work and tripod arrangement for rescue, Tower fall-arrest system, Work at height for LA installation, UG cable laying through HDD, enhancement of PPE like HT face visor, protective eye-wear, Class E safety helmet and rubber hand gloves at Ahmedabad Distribution Unit.

Moreover, the Company has in place the âConviction for Safetyâ policy, which provides for substantial compensation to the personnel (Employees as well as Contractors) and their families, who are adversely affected by accidents and creating more awareness at the workplace about safety and compliance so as to avoid accidents at the workplace.

17. VIGIL MECHANISM

18. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Financial	Unpaid / Unclaimed	No. of equity
Year	Dividend transferred	shares
	(in 3)	transferred
2013-14	22,41,859/-	61,968
(Final)

During the year under review, the Company has also credited following dividend to IEPF Authority against equity shares already transferred:

Financial Year	Dividend (in 3)	Amount credited to IEPF* (in 3)	No. of equity shares already transferred
2020-21 (Final dividend)	5.50 per share	85,73,672.50	19,82,273
2021-22 (Interim dividend)	9.00 per share	1,43,71,293.00	20,30,188

* Net of Tax Deducted at Source (includes Tax Surcharge Cess as applicable) which was 362,29,228/-.

The Members whose shares and unclaimed dividend have been transferred to the IEPF Demat Account and IEPF account respectively, may claim the shares or apply for refund of dividend by making an application to the IEPF Authority in web Form IEPF-5 (available on http://www.iepf.gov.in). The details of Members whose dividend remained unpaid / unclaimed for 7 consecutive years or more may be accessed at Company''s website at www.torrentpower.com.

The details of unpaid / unclaimed dividend lying in unpaid Dividend accounts as on March 31, 2022, are mentioned below:

Sr. No.	Dividend for Financial Year	Due date for transfer to IEPF	Amount of Unpaid / Unclaimed Dividend (in 3)
1.	2014-15 (Final) of erstwhile Torrent Cables Ltd.	September 02, 2022	3,08,387.00
2.	2014-15 (Final) of Torrent Power Ltd.	September 09, 2022	51,36,352.50
3.	2015-16 (Interim) of Torrent Power Ltd.	April 15, 2023	1,58,06,659.50
4.	2016-17 (Final) of Torrent Power Ltd.	September 06, 2024	1,16,56,114.80
5.	2017-18 (Final) of Torrent Power Ltd.	September 06, 2025	1,50,27,060.00

*As the Company has paid dividend through demand draft to those shareholders whose bank account details are not available with the Company and expiry date of such demand draft is on June 1, 2022, and hence there is NIL balance as the Company is not able to identify the unpaid balance in said dividend account as on March 31, 2022.

The actual amount lying in unpaid dividend accounts along with corresponding shares related thereto will be transferred to IEPF Authority within statutory timeline as applicable.

Rahul Shah, Company Secretary, has been appointed as Nodal Officer of the Company and details of the Nodal Officer are available on the website of the Company at https:/ / www.torrentpower.com/index.php/investors/iepf.

Sr. No.	Dividend for Financial Year	Due date for transfer to IEPF	Amount of Unpaid / Unclaimed Dividend (in 3)
6.	2018-19 (Final) of Torrent Power Ltd.	September 10, 2026	1,15,62,775.00
7.	2019-20 (Interim) of Torrent Power Ltd.	March 19, 2027	2,56,63,863.20
8.	2020-21 (Interim) of Torrent Power Ltd.	March 17, 2028	1,03,36,578.50
9.	2020-21 (Final) of Torrent Power Ltd.	September 11, 2028	99,84,037.50
10.	2021-22 (Interim) of Torrent Power Ltd.	March 11, 2029	Nil*

Note: Torrent Cables Limited was amalgamated with Torrent Power Ltd. w.e.f. October 01, 2015.

â¢ Implemented robust annual shut down safety system with initiatives like safety awareness with practical demonstration, deputation of cross function team in addition to third party safety officers for ensuring safe execution and confirmed safe annual shut down with zero safety incident.

â¢ Specialized training programs were organised on prevention and precaution for COVID-19, such as boosting immune system, yoga for daily life, Health Management for healthy and positive lifestyle, managing emotions amid COVID-19 era etc., Online health talks on common health problems; such as hypertension, diabetes, lifestyle diseases, knowledge and competence enhancement for imparting different safety awarenes, chemical handling, fire prevention and emergency preparedness etc. Also, specialized training programs were organised as per GWO (Global Wind Organisation) standard including Work at Height, Basic First Aid, Fire Awareness, Active and Passive Height Rescue and Manual Handling for reducing risk during work in Wind Turbine Generator across all Renewable sites.

â¢ To tackle difficult situation of COVID-19, with proactive and predictive approach adequate necessary measures strategized and implemented like strict surveillance at entrance, frequent sanitiztion of all work places, barriers installation at work desks / vehicles/ cafeteria, compliance of covid protocol with continuous awareness and frequent audits, periodic covid testing of employees, allowing work from home and home to field wherever feasible, contact tracing etc.

19. BUSINESS RESPONSIBILITY REPORT

As stipulated under the Listing Regulations, the Business Responsibility Report forms part of the Integrated Annual Report.

20. RISK MANAGEMENT

The Company has in place a Risk Management framework for a systematic approach to control risks. The Risk Management Policy of the Company lays down procedures for risk identification, assessment, monitoring, review and reporting. The Policy also lists the roles and responsibilities of the Board, Risk Management Committee, Chief Risk Officer, Risk Champions and Risk Co-ordinators. The Risk Management process is reviewed and monitored by the functional heads.

Management Discussion and Analysis Report which forms part of the Integrated Annual Report identifies key risks, which can affect the performance of the Company.

21. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The particulars of contracts or arrangements with the related parties are given in the prescribed Form AOC-2, annexed herewith as Annexure D and in the section on the Related Party Transactions in the Report on Corporate Governance.

22. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

23. PROTECTION OF WOMEN AGAINST SEXUALHARASSMENT AT WORKPLACE

24. THE EXTRACT OF THE ANNUAL RETURN

25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

26. OTHER DISCLOSURES

â¢ During the year under review, the Company has neither accepted nor renewed any fixed deposits.

â¢ During the year under review, there are no changes in the nature of business.

â¢ There are no material changes and commitments affecting the financial position of the Company, which has occurred between end of Financial Year i.e. March 31, 2022 and the date of Directors'' Report i.e. May 10, 2022.

â¢ No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operation in future.

27. APPRECIATION AND ACKNOWLEDGEMENTS

May 10, 2022 Ahmedabad

The Directors express their regret at the loss of human life due to COVID-19 pandemic and have immense respect and gratitude for every person who has risked their life and safety to fight this pandemic.

For and on behalf of the Board of Directors

Samir Mehta

Chairperson DIN: 00061903

Mar 31, 2021

Your Directors are pleased to present Seventeenth Annual Report of the Company together with the Audited Financial Statements for the Financial Year ended March 31, 2021.

1. OPERATIONAL & FINANCIAL HIGHLIGHTS

The Management Discussion and Analysis Report for FY 2020-21 is part of the Annual Report and explains the operating and financial performance of the business for the year.

Summary of the Financial Statements of the Company for the year under review is as under:

to partial redemption of debentures during the year under review.

5. FINANCE

During the year under review, finance cost of the Company (on a consolidated basis) was substantially reduced to ''776 Crore as against ''955 Crore in FY 2019-20. This is mainly due to lower debt and reduction in interest rates. The Company raised long term debt of ''900 Crore (including ''600 Crore in subsidiaries) by way of issuance of secured and unsecured Non-convertible debentures

(âNCDâs), mainly to refinance its existing debt at lower interest rates.

The Company has repaid long term debt of ''1,989 Crore (including prepayments of ''1,125 Crore), resulting in reducing net long-term debt by ''1,089 Crore.

CRISIL has reaffirmed long term and short term credit rating of the Company at CRISIL AA/ Stable and CRISIL A1 respectively. India Ratings has reaffirmed short term rating at IND A1 to the Commercial Paper Programme of the Company.

('' in Crore except per share data)
Particulars	Standalone		Consolidated
	FY 2020-21	FY 2019-20	FY 2020-21	FY 2019-20
Total Income	12,027	13,687	12,314	13,818
Profit Before Tax and Exceptional Item	1,583	1,546	1,552	1,475
Exceptional Item	-	1,000	-	1,000
Profit Before Tax	1,583	546	1,552	475
Total Comprehensive Income for the year (after non-controlling interest)	1,328	1,209	1,295	1,145
Add: Balance brought forward	4,775	4,587	4,741	4,620
Balance available for Appropriation	6,103	5,796	6,036	5,765
Appropriations
Transfer to/(from) Specific Reserves	(69)	62	(69)	62
Dividend Paid (including dividend distribution tax for FY 2019-20)	264	959	264	962
Balance carried to Balance Sheet	5,908	4,775	5,841	4,741
Basic and Diluted Earnings per Share ('' per share)	28	26	27	24

2. SCHEME OF ARRANGEMENT

During the year under review, the Scheme of Arrangement between the Company and TCL Cables Pvt. Ltd., a wholly owned subsidiary of the Company, for transfer and vesting of its Cables Business Undertaking on a going concern basis, with effect from the appointed date being April 01, 2020, by way of slump sale for a cash consideration of ''256.95 Crore was approved by the National Company Law Tribunal (âNCLTâ), Ahmedabad Bench vide its order dated December 17, 2020. The Scheme became operative w.e.f. January 15, 2021.

3. DIVIDEND

The Board Meeting held on May 20, 2021, revised the Dividend Distribution Policy of the Company and the same can be accessed at the Company''s website: https://www.torrentpower.com/pdf/investors/ DividendDistributionPolicy.pdf.

As per the revised Dividend Distribution Policy, the Company shall endeavour to distribute approx. 40% (as per earlier policy - 30%) of its consolidated annual profits after tax as dividend in one or more tranches. The Board of Directors, on February 09, 2021 declared interim

dividend of ''5.50 per equity share on 48,06,16,784 nos. of equity shares for FY 2020-21.

The Board has recommended final dividend of ''5.50 per equity share for FY 2020-21. This final dividend along with normal annual dividend distributed as interim dividend of ''5.50 per equity share works out to total dividend of ''11.00 per equity share for FY 2020-21 [PY ''11.60 per equity share (including ''5.00 per equity share as special dividend)].

The total outflow on account of dividend is ''528.68 Crore (PY ''672.11 Crore including dividend distribution tax of ''114.60 Crore). i.e. 40.67% [PY 33.26% (excluding special dividend of ''5.00 per equity share)] of consolidated total comprehensive income for FY 2020-21.

4. TRANSFER TO RESERVES

The Company has not transferred any amount to the General Reserve for the year under review, other than ''1.87 Crore to certain specific reserves, as described in the Statement of Changes in Equity being part of the Standalone Financial Statements. Further, an amount of ''70.84 Crore has been transferred from Debenture Redemption Reserve to Retained Earnings pertaining

Outstanding consolidated long term debt as on March 31, 2021 was ''7,809 Crore (Refer Note 23 to the Consolidated Financial Statements). Consolidated debt to equity (including deferred tax liability) ratio as at the end of FY 2020-21 was 0.73 (Previous Year: 0.92). The particulars of loans given, guarantees provided and investments made during the year are disclosed in Note 57 to the Standalone Financial Statements.

6. SUBSIDIARIES AND ASSOCIATES

The Board has reviewed the affairs of the Company''s Subsidiaries and Associates at regular intervals. In accordance with Section 129(3) of the Companies Act, 2013 (âthe Actâ), the Company has prepared Consolidated Financial Statements incorporating the Financial Statements of all Subsidiaries and Associates, which form part of the Annual Report. Further, a statement containing salient features of the Financial Statements of the Company''s Subsidiaries and Associates is given in prescribed Form AOC-1, which forms part of the Annual Report (Refer page no. 282).

The said Form also highlights the financial performance of each of the Subsidiaries and Associates included in the Consolidated Financial Statements.

The details pertaining to the companies that have become or ceased to be the Subsidiary or Associate of the Company during the year are provided in Note no. 41 to the Consolidated Financial Statements, forming part of the Annual Report.

During the year, NCLT, Ahmedabad Bench has approved a Scheme of Arrangement (âSchemeâ) in the nature of Amalgamation of UNM Foundation with Tornascent Care Institute (Associate Companies) vide order dated March 23, 2021. The Scheme is effective from April 01, 2020 (âAppointed Dateâ).

I n accordance with Section 136 of the Act, the Financial Statements of the Company, Consolidated Financial Statemnts alongwith separate Audited Financial Statements in respect of Subsidiaries and Associates are available for inspection by the Members at the Registered Office of the Company during the business hours on all

working days. Any person desirous of obtaining the said Financial Statements may write at [email protected]. The Annual Report of the Company and Audited Financial Statements of each of the Subsidiaries and Associates have been placed on the website of the Company at www.torrentpower.com.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

The Members at their 16^th Annual General Meeting (âthe AGMâ) held on August 06, 2020 approved appointment of Sunaina Tomar, IAS (DIN: 03435543) as the Director of the Company.

The Board Meeting held on May 20, 2021 appointed Usha Sangwan (DIN: 02609263) as an Additional Director (Non-Executive Independent) of the Company w.e.f May 21, 2021 till the commencement of the ensuing AGM. The Board hereby recommends her appointment as the Independent Director for a period of 5 consecutive years from May 21, 2021 till May 20, 2026 (both days inclusive), not liable to retire by rotation. In the opinion of the Board, she possesses requisite expertise, integrity and experience (including proficiency) for appointment as an Independent Director of the Company.

As per the provisions of the Act, Jinal Mehta (DIN: 02685284), Director, retires by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment. A brief resume and other relevant details of Jinal Mehta are given in the Explanatory Statement to the Notice convening the AGM.

The Board at its Meeting held on April 08, 2021 appointed Lalit Malik as Chief Financial Officer (CFO) & Whole-time KMP of the Company w.e.f May 01, 2021 in place of Sanjay Dalal, who retired as CFO & Whole-time KMP of the Company w.e.f April 30, 2021.

8. DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from the Independent Directors confirming that they meet the criteria of independence as prescribed under the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âthe Listing Regulationsâ) and they have registered their names in the Independent Director''s Data Bank. The Independent Directors are in compliance with the Code of Conduct prescribed under Schedule IV of the Act and the Code of Business Conduct adopted by the Company.

9. POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION POLICY

The Nomination and Remuneration Committee (âthe NRCâ) has approved following criteria and process for identification / appointment of the Directors:

Criteria for Appointment

i. Proposed Director (âPersonâ) shall meet all statutory requirements and should:

â¢ possess the highest ethics, integrity and values

â¢ not have direct / indirect conflict with present or potential business / operations of the Company

â¢ have the balance and maturity of judgment

â¢ be willing to devote sufficient time and energy

â¢ have demonstrated leadership and vision at senior levels, and have the ability to articulate a clear direction for the Company

â¢ have relevant experience with respect to Company''s business (in exceptional circumstances, specialisation / expertise in unrelated areas may also be considered)

â¢ have appropriate comprehension to understand or be able to acquire that understanding

- relating to Corporate Functioning

- concerning the scale, complexity of business and specific market and environmental factors affecting the functioning of the Company

ii. The appointment shall be in compliance with the Board Diversity Policy of the Company.

Process for Identification / Appointment of Directors

i. Board members may (formally or informally) suggest any potential person to the Chairperson of the Company, meeting the above criteria. If the Chairperson deems fit, necessary recommendation shall be made by him to the NRC.

ii. Chairperson of the Company can himself also refer any potential person meeting the above criteria to the NRC.

iii. The NRC will process the matter and recommend such proposal to the Board.

iv. The Board will consider such proposal on merit and decide suitably.

Remuneration Policy

The Company has in place a policy relating to the remuneration of the Directors, KMP and other employees of the Company. The policy is available on the website of the Company at https://www.torrentpower.com/pdf/ investors/Remuneration_Policy.pdf.

10. EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The evaluation of the Board, its Committees and Individual Directors was carried out as per the process and criteria laid down by the Board of Directors.

A presentation on functioning of the Board and the Committees, containing the outcome of their evaluation and feedback was reviewed by the Independent Directors in their separate Meeting and by the Board. Based on the feedback, the Board expressed satisfaction on overall functioning of the Board, the Committees and performance of the Directors.

11. MEETINGS OF THE BOARD, COMMITTEES & COMPLIANCE TO SECRETARIAL STANDARDS

The Board meets at regular intervals, with gap between two meetings not exceeding 120 days. During the year under review, the Board met four times.

The Board has six committees namely Audit Committee (AC), Nomination and Remuneration Committee (NRC), Corporate Social Responsibility Committee (CSR), Stakeholders Relationship Committee (SRC), Risk Management Committee (RMC) and Committee of Directors (CoD). A detailed note on the composition of the Board and its Committees (AC, NRC, SRC and RMC) is provided in the Corporate Governance Report, forming part of the Annual Report. Composition of CSR Committee is given in the Report on CSR Activities (Annexure C). CoD is a Board Committee to facilitate routine executive decisions and exercise of authority granted by the Board in various matters. The minutes of all the Committee Meetings are reviewed at every Board Meeting.

12. DIRECTORSâ RESPONSIBILITY STATEMENT

In terms of Section 134(3) of the Act, the Board of Directors states that:

a) i n preparation of the Financial Statements, the applicable accounting standards have been followed and there are no material departures;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the

Company as on March 31,2021 and of the profits for the year ended March 31, 2021;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Financial Statements have been prepared on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

13. AUDITORS

Statutory Auditors

The Members at the 13^th AGM of the Company had appointed M/s. Price Waterhouse Chartered Accountants LLP as the Statutory Auditors of the Company to hold office from the close of the 13^th AGM till conclusion of the 18^th AGM.

The Auditors'' Report for FY 2020-21 forms part of the Annual Report and does not contain any qualification, reservation or adverse remark.

Cost Auditors

Pursuant to Section 148(3) of the Act, M/s. Kirit Mehta & Co., Cost Accountants, Mumbai had been appointed as the Cost Auditors of the Company for FY 2020-21 by the Board of Directors for conducting audit of cost records maintained in respect of electricity. Their remuneration was ratified by the Members at the 16^th AGM of the Company.

The Cost Audit Report for FY 2019-20 does not contain any qualification and was filed with the Central Government (within the prescribed time limit) on August 27, 2020 pursuant to Section 148(6) of the Act.

Secretarial Auditors

Pursuant to Section 204 of the Act read with the Rules thereof, the Board of Directors had appointed M/s. M. C. Gupta & Co., Company Secretaries, Ahmedabad, as the Secretarial Auditors of the Company for FY 2020-21. The Secretarial Audit Report for FY 2020-21 is annexed herewith as Annexure A.

There are no adverse observations in the Secretarial Audit Report which call for explanation.

14. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to the Financial Statements. The Statutory Auditors of the Company have audited such controls with reference to the financial reporting and their Audit Report is annexed as Annexure A to the Independent Auditors'' Report under the Standalone Financial Statements and the Consolidated Financial Statements which forms part of the Annual Report.

15. CORPORATE GOVERNANCE

I n compliance with Regulation 34 read with Schedule V of the Listing Regulations, the Report on Corporate Governance forms part of the Annual Report. Certificate of the Auditors regarding compliance with the conditions of Corporate Governance is annexed to the Board''s Report as Annexure B.

16. CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the year, the Company incurred CSR expenditure of ''33.74 Crore, which is 2.50% of the average net profit of the past three financial years as against statutory requirement of 2%. Additionally, ''1.69 Crore was utilised by the CSR implementing agency out of the surplus arising from funds invested temporarily pending the expenditure. This has resulted in total CSR expenditure of ''35.43 Crore for the year. The CSR Activities undertaken by the Company were under the thrust areas of Community Healthcare, Sanitation & Hygiene, Education & Knowledge Enhancement and Social Care & Concern. The Board in its meeting held on May 20, 2021 revised the existing CSR Policy of the Company to harmonize with the amendments carried out by the Ministry of Corporate Affairs in Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The brief details of the major CSR Activities are described hereunder:

REACH: Driven by the belief of Chairman Emeritus, Sudhir Mehta Children are the future of our nation and this future must be well preserved'', the flagship CSR program of the Group âREACHâ - Reach EAch CHild was initiated in the year 2016 under the aegis of Tornascent Care Institute, a section 8 company. REACH has three major pillars: (a) SHAISHAV (b) JATAN and (c) MUSKAN. Salient achievements are:

â¢ âShaishavâ the first pillar of the Programme, targets to establish baseline health status of children in age group of 6 months to 6 years, through medical camps in 351 villages surrounding the industrial establishments of the Group. Till date 71,387 children have been screened, and by providing appropriate treatment more than 74% Malnourished children, more than 90% Anaemic children and 73% children having chronic illnesses were provided appropriate treatment with very encouraging outcomes. During FY 2020-21, inspite of massive challenges posed by

COVID-19 pandemic, maintained an optimum balance of serving the community and at the same time avoiding any exposure by adopting âMinimum Human Intervention Model'', weight assessment of 5,307 Malnourished children was carried out, Mauji Biscuits were provided to beneficiaries and encouraging results have been observed. Similarly, on Anaemic front, Iron supplement were provided to 6,765 children without reassessment.

â¢ âJatanâ, the second pillar of the Programme, encompasses provision of healthcare services to children upto 18 years. There are three primary paediatric health centers (âPPHCsâ) with basic laboratory and day care facility at Dahej, Balasinor and Indrad, while fourth centre near SUGEN power plant was converted into 150 bed paediatric hospital âBalsangam'' (part of âRangtarang'' hospital complex) in FY 2019-20. Due to outbreak of COVID-19 pandemic and consequent nationwide lockdown, in H1 FY 202021 telephonic conversations with 46,000 parents of the beneficiaries across all four PPHCs were arranged for spreading awareness of consumption of healthy diet to boost immune system and maintain proper hygiene to reduce risk of COVID-19.

With all precautions like sanitizing, social distancing and avoiding direct exposure to the patients, PPHC facilities at Balasinor and Indrad were started from September, 2020 and 7,225 beneficiaries were served. From September, 2020 onwards, started audio visual consultation of patients at PPHC facilities near SUGEN power plant and Dahej, and 4,099 beneficiaries have been served.

â¢ Under âMuskanâ, the third pillar of the Programme, counselling and support was provided to rural adolescent girls around SUGEN power plant, Dahej and Indrad centers covering menstrual hygiene and sanitation, by providing free health and hygiene kits. However, due to COVID-19 pandemic, this activity was not carried out till August, 2020 and with appropriate safety measures and also to avoid beneficiaries going back to using conventional practice, health and hygiene kits were provided to around 5,000 beneficiaries in 125 villages.

Shiksha Setu: The Teaching and Learning Programme, conducted through UNM Foundation (amalgamated with Tornascent Care Institute w.e.f. the appointed date being April 01, 2020) completed fifth year of Phase 2. This Programme covers 13 government primary schools located near SUGEN power plant, Chhatral, Chhapi, Memadpur and Ahmedabad having 4,500 students and 150 teachers of 1^st to 8^th standard. During FY 2020-21, practice assignments prepared for students containing questions and activities based on skills of previous standards and current curriculum. These assignments were based on learning outcomes prescribed in National Curriculum Framework on the expected skills / knowledge

for each standard and the same was well received by 4500 students from 3^rd to 8^th standard and 120 teachers.

Various virtual workshops on important concepts of Maths, Science and Computer as per revised curriculum were organised for teachers of 6^th to 8^th standard, in which 78 teachers from 36 schools of Siksha Setu / Chappi / Memadpur / other schools (around Project schools) participated and benefitted. Continuous interaction was carried out with teachers, students and parents to provide support, counsel and address specific concerns regarding education.

Development and Maintenance of Public Parks: The

Company along with one of India''s best known landscape design firm developed an approach for development of urban public parks. Six small sized parks measuring approx. 33,000 sq. mt. have been fully developed and opened for public use since FY 2018-19 and one small sized park was fully developed and opened for public use in FY 2020-21. Another two large parks measuring approx. 66,975 sq. mt. are under development and will be opened for public in FY 2021-22, if situation caused due to COVID-19 allows. Maintenance of above public parks is also funded from CSR funds of the Company.

In addition to above, the Company continued other social activities during the year, as described hereunder:

Creating livelihoods:

â¢ Job opportunities for the local youth commensurate to the education profile and capabilities is a continues process with preference to youth hailing from immediate vicinity, for jobs like Technicians, Healthcare workers, Security Guards, Drivers, Horticulture and Housekeeping. Imparting training to youth hailing from adjacent areas and thereafter, providing them livelihood has been on hold due to the COVID-19 pandemic but will resume once the situation is in control.

â¢ Differently abled persons (with impaired hearing and speech) are provided employemnt once trained for routine cleaning of solar panels at GENSU power plant, thus providing them a dignified livelihood.

Community Healthcare: Sumangal- a daycare Clinic for Adults (the erstwhile âSwadhar''), a community healthcare facility was integrated into âRangtarang'' hospital complex, which caters to medical requirements of nearby 500 villages by providing specialised consultations in the areas of dental care, ophthalmology, dermatology, gynaecology, physiotherapy and orthopeadic. Due to outbreak of COVID-19 pandemic and consequent nationwide

lockdown, a method of Minimum Human Intervention (Audio calls / Tele- Consultation) evolved wherein there is no / minimum contact with the community and hence, all the safety precautions followed to the maximum extend possible and hence, the community is still being served, and there is a constant rapport with the community. This model maintains an optimum balance between serving the beneficiaries and not putting any employee at the risk of exposure to COVID-19.

The Report on CSR Activities is annexed herewith as Annexure C.

Donations

The Company has made donations amounting to ''26.55 Crore toward various social causes as detailed below:

â¢ ''10.05 Crore to various organisations engaged in activities related to healthcare, education, arts & culture, science, relief to disaster victims; socioeconomic development including de-addiction, skill development, self-help groups, upliftment of women, integrated development of tribes, protection of consumer rights, building of toilets etc.

â¢ ''5 Crore to the Prime Minister''s Citisen Assistance and Relief in Emergency Situations Fund (PM CARES Fund).

â¢ ''11.5 Crore to various charitable organisations and Chief Minister''s Relief Fund to fight effects of COVID -19 pandemic and its fallout on poorer sections of the society.

Shardashish School: The Company has earmarked Donation of ''3 Crore (''6 Crore donated in FY 201920) to UNM Foundation (amalgamated with Tornascent Care Institute w.e.f. the appointed date being April 01, 2020) for construction of new school building and related infrastructure at Shardashish School (earlier known as Urja Vidyalaya) situated in the premises of Amgen power plant''s housing colony at Sabarmati in Ahmedabad. Majority of the students are with economically disadvantaged background from nearby slum areas. The new school building will cater facilities like Computer room, Smart room with Projector, Laboratory, Library, Assembly Hall, additional new classes etc.

17. ENVIRONMENT, HEALTH AND SAFETY (EHS)

The Company accords utmost importance to EHS in its various operations. The key developments concerning EHS during FY 2020-21 include:

â¢ Integrated Management System (IMS) to ensure a safe, healthy and environmental friendly working at SUGEN, GENSU and DGEN power plants, which includes Quality Management System (QMS) (ISO 9001:2015), Environment Management System (EMS) (ISO 14001:2015), Occupational Health and Safety

19. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Sections 124 and 125 of the Act and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended from time to time, the Company has, during the year under review, credited unpaid / unclaimed dividend to IEPF Authority and equity shares to the demat account of IEPF Authority as per the details mentioned below:

The Members whose shares and unclaimed dividend have been transferred to the IEPF Demat Account and IEPF account respectively, may claim the shares or apply for refund of dividend by making an application to the IEPF Authority in web Form I EPF-5 (available on http://www.iepf.gov.in). The details of the Members whose dividend remained unpaid / unclaimed for 7 consecutive years or more may be accessed at the Company''s website at www.torrentpower.com.

The details of unpaid / unclaimed dividend lying in unpaid dividend accounts as on March 31, 2021 are mentioned below:

Financial Year		Unpaid / Unclaimed Dividend transferred (in '')	No. of equity shares transferred
2012-13 (Final)		72,82,747/-	84,949
During the year under review, already transferred:	the Company has also credited following dividend to IEPF Authority against equity shares
Financial Year	Dividend (in '')	Amount credited to IEPF* (in '')	No. of equity shares already transferred
2020-21 (Interim dividend)	5.50 per share	87,38,110/-	19,83,174

* Net of Tax Deducted at Source (includes Tax Surcharge Cess as applicable) which was ?21,69,347/-.

Sr. No.	Dividend for Financial Year	Due date for transfer to IEPF	Amount of Unpaid/Unclaimed Dividend (in '')
1.	2013-14 (Final) of erstwhile Torrent Cables Ltd.	September 02, 2021	4,69,359.00
2.	2013-14 (Final) of Torrent Power Ltd.	September 02, 2021	17,93,605.00
3.	2014-15 (Final) of erstwhile Torrent Cables Ltd.	September 02, 2022	3,08,692.00
4.	2014-15 (Final) of Torrent Power Ltd.	September 09, 2022	52,55,281.50
5.	2015-16 (Interim) of Torrent Power Ltd.	April 15, 2023	1,60,94,308.50
6.	2016-17 (Final) of Torrent Power Ltd.	September 06, 2024	1,18,20,729.80
7.	2017-18 (Final) of Torrent Power Ltd.	September 06, 2025	1,53,53,685.00
8.	2018-19 (Final) of Torrent Power Ltd.	September 10, 2026	1,18,20,280.00
9.	2019-20 (Interim) of Torrent Power Ltd.	March 19, 2027	2,62,37,007.60
10.	2020-21 (Interim) of Torrent Power Ltd.	March 17, 2028	1,16,99,632.50
Note: Torrent Cables Ltd. was amalgamated into Torrent Power Ltd. w.e.f. October 01, 2015.

Standard (ISO 45001:2018), Energy Management System (EnMS) (ISO 50001:2018), Asset Management System (AMS) (ISO 55001:2014), Information Security Management System (ISMS) (ISO 27001:2013) and were periodically certified with surveillance audit by TUV India.

â¢ SUGEN power plant has received âInternational Safety Awardâ from British Safety Council for EHS practices and DGEN power plant has been awarded Gold Trophy for FY 2020-21 by ACCQC- Ankaleshwar Chapter Convention of Quality Concept for Five-S (Workplace Management System).

â¢ SUGEN, DGEN and GENSU power plants and all Renewable sites have achieved âreportable Lost Time Accident freeâ man-hours as on March 31,2021.

â¢ Employees at DGEN power plant have participated in capability building workshop organised by the PNGRB (the Petroleum and Natural Gas Regulatory Board) covering the PNGRB Regulations.

â¢ Residential townships: Shardashish at SUGEN power plant and Meghdhanush at DGEN power plant are certified as per Environment Management System (EMS) (ISO 14001:2015) and Occupational Health and Safety Management Standard (ISO 45001:2018). Indian Green Building Council (IGBC) has certified Meghdhanush with Platinum certification under IGBC Green Residential Societies Rating System in August, 2020 for the period of three years.

â¢ Rainwater harvesting system resulted in rainwater collection of 1.50 Lakh m3 at DGEN power plant.

â¢ Vertical Garden on outer periphery of building provided at all new PSC buildings, to protect environment and reduce heat load on airconditioning system at Ahmedabad distribution units.

â¢ AMGEN power plant has introduced safety commitment yearly drive to strengthen workplace safety and to nullify any potentiality of safety incidents.

â¢ Safety initiatives like; workplace safety surveys, periodic inspection of tools and tackles, internal / external mock drills for strengthening emergency preparedness, campaign for encouraging near-miss-reporting, basic training on electric safety and its hazards etc. were taken throughout the year by specific shop floor teams for positive engagement of work force in safety to further enhance safety culture.

â¢ Safety improvement initiatives such as installation of emergency key boxes at all locations inside plants, special tool, Laser Distance Meter, Magnetic Insulation Sheet, Portable Electrical Boards were purchased to prevent injury from electric hazard. Electric (battery operated) Bicycles were purchased for environment friendly transportation within plants.

â¢ Ahmedabad, Surat and Dahej distribution units have been awarded Five Star rating from British Safety Council for occupational health & safety practices.

â¢ Dahej distribution unit has been awarded prestigious Sword of Honour by British Safety Council in December 2020 for its commitment to excellence in occupational health and safety.

â¢ Risk Life Assessment (RLA) of civil structures of office premises and EHV substations were done by structural consultant at Surat and Dahej distribution units.

â¢ Amid COVID-19, implemented robust annual shut down safety system with initiatives like safety awareness with practical demonstration, deputation of cross function team in addition to third party safety officers for ensuring safe execution and confirmed safe annual shut down with zero safety incident.

â¢ Specialised training programs were organised on prevention and precaution for COVID-19, such as boosting immune system, yoga for daily life, health management for healthy and positive lifestyle, managing emotions amid COVID-19 era etc., online health talks on common health problems such as hypertension, diabetes, lifestyle diseases, knowledge and competence enhancement for imparting different safety awareness, chemical handling, fire prevention and emergency preparedness etc. Also, E-learning initiatives taken up for EHS training.

â¢ To tackle difficult situation of COVID-19, with proactive and predictive approach adequate necessary measures strategised and implemented like strict surveillance at entrance, frequent sanitization of all work places, barriers installation at work desks / vehicles / cafeteria, compliance of covid protocol with continuous awareness and frequent audits, periodic covid testing of employees, allowing work from home and home to field wherever feasible, contact tracing etc.

Moreover, the Company has in place the âConviction for Safetyâ policy, which provides for substantial compensation to the personnel (Employees as well as Contractors) and their families, who are adversely affected by accidents and creating more awareness at the work place about safety and compliance so as to avoid accidents at the work place.

18. VIGIL MECHANISM

The Company has in place a Vigil Mechanism / Whistle Blower Policy pursuant to the applicable statutory requirements. The details of the Vigil Mechanism / Whistle Blower Policy are explained in the Report on Corporate Governance.

The actual amount lying in unpaid dividend accounts along with corresponding equity shares related thereto will be transferred to IEPF Authority within statutory timeline as applicable.

Rahul Shah, Company Secretary, has been appointed as the Nodal Officer of the Company and the details of the Nodal Officer are available on the website of the Company at https://www.torrentpower.com/index.php/investors/ iepf.

20. BUSINESS RESPONSIBILITY REPORT

As stipulated under the Listing Regulations, the Business Responsibility Report forms part of the Annual Report.

21. RISK MANAGEMENT

The Company has in place a Risk Management framework for a systematic approach to control risks. The Risk Management Policy of the Company lays down procedures for risk identification, assessment, monitoring, review and reporting. The Policy also lists the roles and responsibilities of the Board, Risk Management Committee , Chief Risk Officer, Risk Champions and Risk Co-ordinators. The Risk Management process is reviewed and monitored by the functional heads.

Management and Discussion Analysis Report of the Annual Report identifies key risks, which can affect the performance of the Company.

22. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

23. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

24. PROTECTION OF WOMEN AGAINST SEXUAL HARASSMENT AT WORKPLACE

25. THE EXTRACT OF THE ANNUAL RETURN

I n terms of Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at https://www.torrentpower. com/index.php/investors/annualreturn.

26. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The details relating to conservation of energy, technology absorption, foreign exchange earnings and outgo prescribed under Section 134(3)(m) of the Act read with

Companies (Accounts) Rules, 2014 are given in the Annexure F, which forms part of this Report.

27. OTHER DISCLOSURES

â¢ During the year under review, the Company has neither accepted nor renewed any fixed deposits.

â¢ During the year under review, there are no changes in the nature of business.

â¢ There are no material changes and commitments affecting the financial position of the Company, which has occurred between end of Financial Year i.e. March 31, 2021 and the date of Board''s Report i.e. May 20, 2021.

â¢ No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operation in future.

28. APPRECIATION AND ACKNOWLEDGEMENTS

For and on behalf of the Board of Directors

Samir Mehta

May 20, 2021 Chairperson

Ahmedabad DIN: 00061903

Mar 31, 2019

Dear Members,

The Directors are pleased to present the Fifteenth Annual Report of the Company together with the Audited Financial Statements for the Financial Year ended 31^st March, 2019.

1. OPERATIONAL & FINANCIAL HIGHLIGHTS

The Management Discussion and Analysis Report for FY 19 is part of the Annual Report and explains the operating and financial performance of the business for the year.

Summary of the financial results of the Company for the year under review is as under:

(Rs, in Crore except per share data)

Particulars	Standalone		Consolidated
	FY 19 FY 18		FY 19 FY 18
Total Income	13,239	11,717	13,341	11,776
Profit Before Tax	1,248	1,376 \|	1,264	1,401
Total comprehensive income for the year (after non-controlling interest)	883	935	893	955
Add: Balance brought forward	3,378	2,606	3,405	2,614
Add: Impact on adoption of Ind AS 115	649	-	648	-
Balance available for Appropriation	4,910	3,541	4,946	3,569
Appropriations
Transfer to specific reserves	36	36	36	36
Dividend paid (including dividend distribution tax)	288	127	290	128
Balance carried to Balance Sheet	4,586	3,378	4,620	3,405
Basic and Diluted Earnings per Share (Rs, per share)	19	19	19	20

2. DIVIDEND

The Company, as a policy, endeavors to distribute approx. 30% of its consolidated annual profits after tax as dividend in one or more tranches. Following the said policy, the Board of Directors have recommended dividend of Rs,5 per equity share having face value of Rs,10/- on 48,06,16,784 equity shares (PY Rs,5 per equity share having face value of Rs,10/- on 48,06,16,784 equity shares), amounting to Rs,240.31 Crore (PY Rs,240.31 Crore).

The Company will pay Dividend Distribution Tax of Rs,49.40 Crore (PY Rs,49.40 Crore) on the above dividend; the total outflow on account of dividend thus is Rs,289.71 Crore (PY Rs,289.71 Crore) i.e. 32.28% (PY 30.01%) of consolidated total comprehensive income for FY 19.

The Dividend Distribution Policy of the Company can be accessed at the Companyâs website: https://www.torrentpower. com/pdf/investors/06-01-2017_hfl6a_Dividend_Distribution_Policy.pdf

3. FINANCE

During the year under review, the Company has tied up Rs,2,355 Crore in the form of Capex LC facility and part of the Rupee Term Loan for 499.8 MW Wind Power Project and Rs,1,680 Crore in the form of term loan for its routine capex requirements, mainly for its Distribution Licensee and Distribution Franchisee businesses as well as cable business of the Company incurred and to be incurred during FY 19 and FY 20.

Outstanding amount towards long term loans, Non-Convertible Debentures (NCDs) and Accelerated Power Development and Reforms Programme (APDRP) loans as on 31^st March, 2019 was Rs,9,455 Crore. Details of long term loans of the Company for the year under review are provided in Note 22 to the Consolidated Financial Statements.

The consolidated debt to equity (including deferred tax liability) ratio as at the end of FY 19 was 0.90 (PY 1.01).

The particulars of loans given, guarantees provided and investments made are disclosed in Note 55 to the Standalone Financial Statements.

Credit Rating of the Companyâs long term loans, cash credit and NCDs has been reaffirmed by CRISIL at AA- / Stable and that of Letters of Credit / Bank Guarantees of the Company has been reaffirmed at A1 on 29^th September, 2018.

4. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The Board reviews the affairs of the Companyâs subsidiaries and associates at regular intervals. In accordance with section 129(3) of the Companies Act, 2013, the Company has prepared Consolidated Financial Statements of the Company which form part of this Annual Report. Further, a statement containing salient features of the Financial Statements of the Companyâs subsidiaries and associates is given in prescribed form AOC-1 which forms part of this Annual report at page no. 238. The said Form also highlights the financial performance of each of the subsidiaries and associate companies included in the Consolidated Financial Statements.

Details pertaining to companies that ceased to be the associates of the Company during the year are provided in Note no. 41 of the notes to the Consolidated Financial Statements, forming part of the Annual Report.

In accordance with section 136(1) of the Companies Act, 2013, the Financial Statements of the subsidiary and associate companies are available for inspection by the members at the Registered Office of the Company during business hours on all days except Saturday, Sunday and Public Holiday. Any person desirous of obtaining said financial statements may write at [email protected]. The Annual Report of the Company and Audited Financial Statements of each of the subsidiary companies have been placed on the website of the Company www.torrentpower.com.

5. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The members of the Company at the 14^th Annual General Meeting (AGM) held on 1^st August, 2018, appointed Shri Samir Mehta as Chairman (with substantial powers of management) and Shri Jinal Mehta as Managing Director of the Company wef 1^st April, 2018, for a term of five years.

The members in the same meeting re-appointed Smt. Bhavna Doshi (from 4^th August, 2018 till 30^th September, 2021), Ms. Dharmishta N Raval (from 16^th October, 2018 till 30^th September, 2021), Shri Samir Barua (from 1^st April, 2019 till 30^th September, 2022), Shri Keki Mistry (from 1^st April, 2019 till 31^st March, 2024) and Shri Pankaj Patel (from 1^st April, 2019 till 31^st March, 2024) as Independent Directors of the Company for second and final term.

Shri Markand Bhatt, Whole-time Director relinquished his position wef 30^th September, 2018.

Shri Kiran Karnik completed his term as an Independent Director of the Company on 31^st March, 2019 and in deference to his wish, was not re-appointed for second term.

The Board meeting held on 7^th February, 2018 appointed Shri Sanjay Dalal as Chief Financial Officer & Whole-time KMP of the Company wef 30^th May, 2018 in place of Shri T. P. Vijayasarathy who was assigned a new role in the Company.

The Board meeting held on 1^st August, 2018 appointed Shri Samir Shah as Company Secretary & Whole-time KMP of the Company wef 2^nd August, 2018.

As per the provisions of the Companies Act, 2013, Shri Jinal Mehta (DIN: 02685284), Director, retires by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment. A brief resume and other relevant details of Shri Jinal Mehta are given in the Explanatory Statement to the Notice convening the 15^th AGM.

6. DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from the Independent Directors confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. Independent Directors are in compliance with the Code of Conduct prescribed under Schedule IV of the Companies Act, 2013.

7. POLICY ON DIRECTORSâ APPOINTMENT AND REMUNERATION POLICY

The Nomination and Remuneration Committee (NRC) has approved the following criteria and process for identification / appointment of Directors:

Criteria for appointment:

i. Proposed Director (âPersonâ) shall meet all statutory requirements and should:

- possess the highest ethics, integrity and values

- not have direct I indirect conflict with present or potential business I operations of the Company

- have the balance and maturity of judgment

- be willing to devote sufficient time and energy

- have demonstrated leadership and vision at senior levels, and have the ability to articulate a clear direction for the Company

- have relevant experience with respect to Companyâs business (in exceptional circumstances, specialization / expertise in unrelated areas may also be considered)

- have appropriate comprehension to understand or be able to acquire that understanding: o relating to Corporate Functioning concerning the scale, complexity of business and specific market and environment factors affecting the functioning of the Company

ii. The appointment shall be in compliance with the Board Diversity Policy of the Company.

Process for Identification / Appointment of Directors:

i. Board members may (formally or informally) suggest any potential person to the Chairman of the Company meeting the above criteria. If the Chairman deems fit, necessary recommendation shall be made by him to the NRC.

ii. Chairman of the Company can himself also refer any potential person meeting the above criteria to the NRC.

iii. NRC will process the matter and recommend such proposal to the Board.

iv. Board will consider such proposal on merit and decide suitably.

Remuneration Policy:

The Company has in place a policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees of the Company. The Company has revised the said policy in its Board Meeting held on 5^th February, 2019. The amended policy is available on the website of the Company at https://www.torrentpower.com/pdf/investors/ Remuneration_Policy.pdf

8. EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The evaluation of Board, its Committees and Individual Directors was carried out as per the process and criteria laid down by the Board of Directors.

The preformed formats for facilitating the evaluation process of Non Independent Directors, Board as a whole and Committees were sent to all Independent Directors. A presentation on functioning of the Board and Committees containing the outcome of their evaluation and feedback was reviewed by the Independent Directors in their separate meeting and by the Board. Based on the feedback, the Board expressed satisfaction on the functioning of the Board, Committees and performance of Individual Directors.

9. MEETINGS OF THE BOARD, COMMITTEES & COMPLIANCE TO SECRETARIAL STANDARDS

The Board meets at regular intervals, with gap between two meetings not exceeding 120 days. During the year under review, the Board met four times.

The Board has five Committees namely Audit and Risk Management Committee (ARMC), Nomination and Remuneration Committee (NRC), Corporate Social Responsibility (CSR) Committee, Stakeholders Relationship Committee (SRC) and Committee of Directors (CoD). A detailed note on the composition of the Board and its Committees (ARMC, NRC and SRC) is provided in the Corporate Governance Report included in this Annual Report. Composition of CSR Committee is given in the Report on CSR Activities (Annexure C). CoD is a Board Committee to facilitate routine executive decisions and exercise of authority granted by the Board in various matters. The minutes of the CoD meetings are reviewed at every Board meeting.

During the year under the review, the Company has complied with the provisions of Secretarial Standard 1 (relating to meeting of the Board of Directors) and Secretarial Standard 2 (relating to General meetings).

10. DIRECTORSâ RESPONSIBILITY STATEMENT

In terms of section 134(3) of the Companies Act, 2013, the Board of Directors state that:

a) in preparation of the Financial Statements, the applicable accounting standards have been followed and there are no material departures;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the financial statements have been prepared on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

11. AUDITORS STATUTORY AUDITORS

The members had at the 13^th AGM of the Company appointed M/s. Price Waterhouse Chartered Accountants LLP as Statutory Auditors of the Company to hold the office from the close of the 13^th AGM till the conclusion of the 18^th AGM, subject to their appointment being ratified by the members in every AGM. The members of the Company approved deletion of the requirement of seeking ratification of appointment of Statutory Auditors at every AGM pursuant to amendment brought by the Companies Amendment Act, 2017.

The Auditorsâ Report for FY 19 forms part of this Annual Report and does not contain any qualification, reservation or adverse remark.

COST AUDITORS

Pursuant to section 148(3) of the Companies Act, 2013, M/s. Kirit Mehta & Co., Cost Accountants, Mumbai had been appointed as the Cost Auditors of the Company for FY 19 by the Board of Directors for conducting audit of cost records maintained in respect of electrical energy and electrical cables. Their remuneration was ratified by members at the 14^th AGM of the Company.

The Cost Audit Report for FY 18 does not contain any qualification and was filed on 29^th August, 2018 with the Central Government (within the prescribed time limit) pursuant to section 148(6) of the Companies Act, 2013.

SECRETARIAL AUDITORS

Pursuant to section 204 of the Companies Act, 2013 read with rules thereof, the Board of Directors had appointed M/s. M. C. Gupta & Co., Company Secretaries, Ahmadabad, as Secretarial Auditors of the Company for FY 19. The Secretarial Audit Report for FY 19 is annexed herewith as Annexure A.

There are no adverse observations in the Secretarial Audit Report which call for explanation.

12. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to Financial Statements. During the year under review, such controls were tested by the Auditors and no reportable material weakness was observed.

13. CORPORATE GOVERNANCE

In compliance with Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Report on Corporate Governance forms part of this Annual Report. Certificate of the Auditors regarding compliance with the conditions of Corporate Governance is annexed to the Boardâs Report as Annexure B.

14. CORPORATE SOCIAL RESPONSIBILITY (CSR)

During FY 19, the Company incurred CSR expenditure of Rs,19.64 Crore which was higher than the obligation to spend 2% of average net profit for the past three financial years amounting to Rs,19.51 Crore. The CSR activities by the Company were under the thrust areas of Community Healthcare, Sanitation & Hygiene, Education & Knowledge Enhancement and Social Care & Concern. The brief outline of the CSR policy of the Company and the details of key CSR programs and activities undertaken at Group level are provided in the Report on CSR Activities annexed herewith as Annexure C.

In addition to above, the Company continued other social activities during the year, the brief details of the same is described hereunder.

- Creating livelihoods :

o 33 working days intensive training module, followed by structured on job training for 28 days, developed in-house by the security team at SUGEN and DGEN Power Plant, covering security, basic firefighting and working knowledge of computers for unemployed youth with basic primary education has been continued in FY19 as well; these youths, numbering 48, have been absorbed in security related jobs at SUGEN and DGEN power plants. As at end of the year, 138 youth were employed as Security Guards at SUGEN and DGEN power plants as part of the security setup.

o 31 differently abled persons (with impaired hearing and speech) were trained for routine cleaning of solar panels at the GENSU Solar Plant, thus providing them a dignified livelihood.

o Employment to uneducated and destitute locals for horticulture, housekeeping and canteen work.

- Community Healthcare :

SWADHAR - the community health care centre at SUGEN Plant, provided primary health care facilities at nominal cost to the surrounding communities. FY 19 witnessed enhanced scope through inclusion of specialized consultations in the areas of Dental care, Ophthalmology, Dermatology, Gynaecology, Physiotherapy and Orthopaedic. The enhancement in scope resulted in a surge in the number of patients served during year to about 85,000. Till 31^st March, 2018 a total of 80,640 patients in general ailment category were benefited whereas during FY 19, total 84,714 patients, including 23,806 patients with specific ailment. The cumulative patients served since inception of the program was 1,65,354.

- Donations :

The Company also made donations amounting to Rs,9.20 Crore to various organizations for activities related to healthcare, education, arts & culture, science, relief to disaster victims; socio-economic development including de-addiction, skill development; self-help groups, youth, upliftment of women, integrated development of tribes; etc.

15. ENVIRONMENT, HEALTH AND SAFETY (EHS)

The Company accords utmost importance to EHS in its various operations. The key developments concerning EHS during FY 19 includes:

- Zero Liquid Discharge (ZLD) since August 2017 at SUGEN plant.

- SUGEN, UNOSUGEN, DGEN and Cable Units have upgraded to the 2015 version of ISO standards. Generation plants have also implemented 5-S programme and got certified by Quality Circle Forum of India (QCFI).

- Implemented âBehavior Based Safetyâ (BBS) to develop and inculcate safety as a behavioral aspect of each individual. Safety trainings were imparted to employees at different locations.

- Health talks related to common health problems such as Hypertension, Diabetes, Life Style Disease, yoga sessions, mini marathon etc. were conducted for employees.

- Drip Irrigation System in AMGEN premises to save water, rainwater harvesting at Meghdhanush housing colony of DGEN, extension of remote calibration facility for Continuous Emission Monitoring System (CEMS) to Central Pollution Control Board (CPCB) as per the applicable regulations.

- E-learning initiative taken up for EHS training in SUGEN, DGEN and GENSU. Specialized external training workshops were organized for critical activities such as lifting and rigging, working at height, hot works, confined space working and safe scaffolding, training for CPR technique (with latest analytical tool) with practical demonstration and practice, Mock drills for different kind of emergency scenarios such as electrical shock, fire in office premise after duty hours, oil spillage in the workshop etc.

- Measurement and monitoring of environmental parameters related to drinking water quality, food quality, work place noise, energy consumption stores, usage of environmentally friendly bio-degradable ester oil in place of mineral oil in distribution transformers in densely populated and congested areas to enhance safety and to prevent land contamination.

- Celebrations of Electrical Safety/ Chemical Safety I National Safety I Anti-Tobacco I Road Safety weeks, World Heart Day, National Fire Service Day, World Environment Day, Earth Day, etc.

16. VIGIL MECHANISM

The Company has in place a Whistle Blower Policy pursuant to the applicable statutory requirements. The details of the Whistle Blower Policy are explained in the Report on Corporate Governance.

During the year under review, the Company has also credited dividend declared for FY 18 amounting to Rs,61,80,205/- to IEPF account arising on 12,36,041 equity shares already transferred to IEPF authority.

Members whose shares and unclaimed dividend, have been transferred to the IEPF Demat Account or IEPF account, as the case may be, may claim the shares or apply for refund of dividend by making an application to the IEPF Authority in Form IEPF-5 (available on http://www.iepf.gov.in). Details of members whose dividend remained unpaid for 7 consecutive years or more may

be accessed at Companyâs website at www.torrentpower.com.

Note: Torrent Cables Limited was amalgamated with Torrent Power Limited wef 1^st October, 2015.

At the above mentioned due dates, the actual amount lying in unpaid dividend accounts alongwith corresponding shares related thereto will be transferred to IEPF authority.

18. BUSINESS RESPONSIBILITY REPORT

As stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report forms part of this Annual Report.

19. RISK MANAGEMENT

The Company has in place a Risk Management framework for a systematic approach to control risks. The Risk Management Policy of the Company lays down procedures for risk identification, assessment, monitoring, review and reporting. The policy also lists the roles and responsibilities of Board, Risk Management Committee, Chief Risk Officer, Risk Champions and Risk Co-ordinators. Internal and external risks with potential impact and likelihood that may impact the Company in achieving its strategic objectives or may threaten its existence have been identified and assessed.

20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The particulars of contracts or arrangements with related parties are given in the prescribed Form AOC-2, appended herewith as Annexure D and in the section on Related Party Transactions in the Report on Corporate Governance.

21. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The details in terms of section 197(12) of the Companies Act, 2013 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time are forming part of this report as Annexure E.

22. PROTECTION OF WOMEN AGAINST SEXUAL HARASSMENT AT WORK PLACE

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 [14 of 2013].

23. THE EXTRACT OF THE ANNUAL RETURN

The extract of the Annual Return in Form MGT-9 is appended herewith as Annexure F to this Report.

24. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The details relating to conservation of energy, technology absorption, foreign exchange earnings and outgo prescribed under section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are given in the Annexure G which forms part of this Report.

25. OTHER DISCLOSURES

- During the year under review, the Company has neither accepted nor renewed any fixed deposits.

- There are no material changes and commitments, affecting the financial position of the Company which has occurred between end of Financial Year i.e. 31^st March, 2019 and the date of Boardâs Report i.e. 15^th May, 2019.

- No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Companyâs operation in future.

26. APPRECIATION AND ACKNOWLEDGEMENTS

The Board of Directors is pleased to place on record its appreciation for the continued support received from all stakeholders including government, regulatory authorities and financing institutions. The Board is thankful to the members and employees for their unstinted support and contribution.

For and on behalf of the Board of Directors

Ahmedabad Samir Mehta

15^th May, 2019 Chairman

DIN: 00061903

Mar 31, 2018

Dear Members,

The Directors are pleased to present the Fourteenth Annual Report of the Company together with the Audited Financial Statements for the Financial Year ended 31^st March, 2018.

1. HIGHLIGHTS

The key highlights for the Financial Year 2017-18 are:

- Financial performance of the Company on consolidated basis: o Increase in Total Income by 15.55% to Rs.11,775.64 Crore o Increase in PBDIT by 27.52% to Rs.3,380.68 Crore

- Increase in Total Comprehensive Income (after Non-controlling interest) by 126.15% to Rs.955.65 Crore

- In the matter of tariff determination for Ahmedabad and Surat Distribution areas, Honâble Gujarat Electricity Regulatory Commission (GERC):

- for FY 2017-18 and true up of FY 2015-16 continued the tariff of FY 2016-17 for FY 2017-18 as well and also directed to discontinue the recovery of Regulatory Charge w.e.f 10^th June, 2017.

- f or FY 2018-19 and true up of FY 2016-17 has not revised the tariff for second year in succession and abolished Meter Rent w.e.f. 1^st April, 2018.

- The Company continued to substantially improve the network and reduce Aggregate Technical & Commercial (AT&C) Losses in Bhiwandi and Agra. The AT&C losses reduced from 22.22% in FY 2016-17 to 17.28% in FY 2017-18 in Bhiwandi and from 26.78% in FY 2016-17 to 20.89% in FY 2017-18 in Agra.

- 400 kV Nikol-2 supply point has been commissioned with state-of-the-art Gas-insulated substation and numerical relays in the city of Ahmedabad; thus enhancing the import capacity of Eastern part of Ahmedabad.

- Geographical Information System (GIS) has been implemented at Ahmedabad, Gandhinagar and Surat distribution areas. New âPlug pointsâ the digital customer service centres were launched in Ahmedabad & Gandhinagar. Over 125 new collection centres have been launched at various geographies across the distribution areas for greater convenience to customers.

- 9 LNG cargoes have been imported till 31^st March, 2018 and another 26 LNG cargoes have been contracted, after following a competitive tender process, with international suppliers for delivery upto December 2020.

- The Company continued to grow its Renewables business and has won the following wind power projects by participating in the competitive bidding and the e-reverse auction process:

a) 499.8 MW held on 13^th February, 2018 by Solar Energy Corporation of India Limited (SECI) (Tranche - III). This is the largest capacity ever won by any bidder in the wind auctions conducted so far in the country.

b) 124.4 MW held on 6^th March, 2018 by Maharashtra State Electricity Distribution Company Limited.

- 164.9 MW Wind Power Projects have been successfully commissioned during the year. The total renewable power generation capacity, including operational and under-construction projects, has crossed the mark of 1,550 MW.

FINANCIAL RESULTS

Summary of the financial results of the Company for the year under review is as under:

(Rs. in Crore)

Particulars	Standalone		Consolidated
Particulars	For the year ended 31^st March, 2018	For the year ended 31^st March, 2017	For the year ended 31^st March, 2018	For the year ended 31^st March, 2017
Total Income	11,716.78	10,153.43	11,775.64	10,190.98
Profit Before Depreciation, Interest and Tax	3,326.36	2,619.92	3,380.68	2,651.18
Depreciation, Amortization & Impairment loss	1,111.14	989.42	1,131.50	1,005.86
Finance Costs	839.69	1,046.56	848.19	1,057.98
Profit Before Tax	1,375.53	583.94	1,400.99	587.34
Current Tax	303.60	121.95	312.48	123.95
Deferred Tax	150.19	29.63	136.39	33.60
Non-controlling Interest	-	-	9.81	0.84
Profit for the period	921.74	432.36	942.31	428.95
Other comprehensive income (net of tax)	13.33	(6.36)	13.34	(6.37)
Total comprehensive income for the year	935.07	426.00	955.65	422.58
Add: Balance brought forward	2,606.17	2,216.07	2,613.78	2,228.05
Balance available for Appropriation	3,541.24	2,642.07	3,569.43	2,650.63
Appropriations
Transfer to Contingency Reserve	1.71	1.68	1.71	1.68
Transfer to Debenture Redemption Reserve	34.22	34.22	34.22	34.22
Transfer to General Reserve	-	-	-	-
Dividends
Dividend (including interim dividend) paid	105.74	-	105.74	-
Dividend distribution tax paid	21.12	-	22.47	0.95
Balance carried to Balance Sheet	3,378.45	2,606.17	3,405.29	2,613.78
Basic and Diluted Earnings per Share (Rs. per share)	19.18	9.00	19.61	8.93

Note: The figures for the previous periods have been regrouped / recast, wherever necessary, to make them comparable with the figures for the current periods.

2. DIVIDEND

The Company, as a policy, endeavours to distribute approx. 30% of its consolidated annual profits after tax as dividend in one or more tranches. Following the said policy, the Board of Directors, on 29^th May, 2018, recommended dividend of Rs.5.00 per equity share having face value of Rs.10/- on 48,06,16,784 equity shares (PY Rs.2.20 per equity share having face value of Rs.10/- on 48,06,16,784 equity shares), amounting to Rs.240.31 Crore (PY Rs.105.74 Crore).

With Dividend Distribution Tax of Rs.49.40 Crore (PY Rs.21.12 Crore), the total outflow on account of dividend works out to Rs.289.71 Crore (PY Rs.126.86 Crore) i.e. 30.32% (PY 30.02%) of consolidated Total Comprehensive Income for FY 201718.

The Dividend Distribution Policy of the Company can be accessed at the Companyâs website: http://www.torrentpower. com/pdf/investors/06-01-2017_hfl6a_Dividend_Distribution_Policy.pdf

3. MANAGEMENT DISCUSSION AND ANALYSIS

As stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report forms part of this Annual Report.

4. CUSTOMER INITIATIVES

The Company constantly strives to adopt customer-driven strategies to provide positive customer experience. Key technology initiatives taken in this regard during FY 2017-18 include (a) Implementation of GIS at Ahmedabad, Gandhinagar and Surat distribution areas; (b) New âPlug pointsâ the digital customer service centres, were launched in Ahmedabad & Gandhinagar; (c) Opening of 100 new collection centres in licensed areas and 25 new collection centres in franchise areas to expand service reach; (d) Implementation of Interactive Voice Response System (IVRS) system for Agra customers; and (e) Launch of upgraded mobile application for customers with more payment options like UPI, Mobikwik and request options for customer account statement.

5. ENVIRONMENT, HEALTH And SAFETY

The Company accords utmost importance to environment, health and safety (EHS) in its various operations. The key developments concerning EHS during FY 2017-18 include:

- Zero Liquid Discharge since August 2017 at SUGEN plant.

- Accreditation of Integrated Management System of DGEN-PLL gas line by Certification Engineers International Limited as per Petroleum and Natural Gas Regulatory Boad (PNGRB) regulations.

- Samanvay (Corporate Office), GENSU plant and Meghdhanush (residential colony) have upgraded to the 2015 version of ISO standards. Other units are in the process of upgradation of their Integrated Management System to the new standards.

- Other key EHS initiatives include Rainwater harvesting system at Samanvay (Corporate Office) & Distribution units; Safety training programs for differently abled persons at GENSU, Safety awareness programs, Usage of environmentally friendly bio-degradable ester oil in place of mineral oil in Distribution transformers in densely populated and congested areas to enhance safety and to prevent land contamination, introduction of Cobalt Free Silica Gel moisture absorbent in place of normal Silica Gel for transformers at SUGEN plant, tree plantation, Celebrations of Electrical Safety / Chemical Safety / National safety / Anti-Tobacco Week, World Heart Day, National Fire Service Day, World Environment Day, Earth Day, etc.

Moreover, the Company has in place the âConviction for Safety Policyâ which provides for substantial compensation to the personnel (Employees as well as Contractors) and their families, who are adversely affected by accidents.

6. HUMAN RESOURCES

At Torrent, we firmly believe that each milestone achieved by the Organization is an outcome of efforts, dedication and conviction demonstrated by its people. Herein, HR has a major role to play as it improves the companyâs bottom line with its knowledge of how human capital affects organizational success. HR participates in corporate decision-making that underlies current staffing assessments and projections for future workforce needs based on business demand. It also helps in the development of organisational culture and climate in which employees have the competency, concern and commitment to serve customers well.

Training and Development initiatives are adjacent focus areas which involve change in attitude, skills or knowledge of a person with the resultant improvement in their behaviour. For training to be effective, it is planned after a thorough need analysis and is targeted at certain competencies and skills required for upgrading to next level.

The significance of HR can be seen in three contexts: Organisational, Social and Professional in following ways:

- Good human resource practice can help in attracting and retaining the best people in the organisation.

- Developing the necessary skills and right attitude amongst the employees through training, development, performance appraisal, etc.

- Securing willing cooperation of employees through motivation, participation, grievance handling, etc.

- Promoting team-work and team-spirit amongst employees

- Providing environment and incentives for developing and utilizing creativity

On the Statutory front, during the year under review, no case was received under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The year also saw reinforcement of the already existing Whistle Blower Policy in order to emphasize and encourage reporting of any wrongdoing or any unethical practice.

On the industrial front, the Company continued to foster cordial industrial relations with its workforce during the year.

The Company has a diverse workforce of 7619 employees as on 31^st March, 2018 vis-a-vis 7,414 employees as on 31^st March, 2017. Going forward, the Company will continue to focus on nurturing the right talent to achieve the business goals.

7. CORPORATE SOCIAL RESPONSIBILITY

The Board has adopted a Corporate Social Responsibility (CSR) Policy for the Company based on which CSR Programs and activities were carried out during the year. The CSR Policy and CSR Plan for FY 2017-18 can be accessed through the following weblinks:

http://www.torrentpower.com/pdf/investors/02-06-2016_rautx_csrpolicy.pdf http://www.torrentpower.com/pdf/investors/03-01-2018_8oc69_CSR_Plan.pdf

The CSR committee comprises of Smt. Bhavna Doshi (Chairperson), Shri Samir Barua and Shri Jinal Mehta. The Committee oversees the CSR activities.

The Company, as part of its CSR activities made focused efforts in the fields of Community Healthcare, Sanitation & Hygiene, Education & Knowledge Enhancement and Social Care & Concern.

The details of key CSR programs and activities undertaken at Group level are provided in the Annual Report on CSR Activities (Annexure A to this Report). The Company has spent Rs.15.11 Crore on CSR programs and activities as compared to the 2% of average net profit for the past three financial years of Rs.15.02 Crore mandated by section 135 of the Companies Act, 2013.

In addition to above, the Company also undertook some additional CSR activities during the year, briefly described hereunder.

- Creating livelihood:

- 42 days intensive training course, developed in-house by the security team at Sugen Power Plant, covering security, basic firefighting and working knowledge of computers for unemployed youth with basic primary education has been continued in FY 2017-18 as well; these youths, numbering 72, have been absorbed in security related jobs at Sugen and Dgen power plants.

- Multi skill trainings were organized for the Companyâs security guards in the areas of CCTV operations, driving, housekeeping, etc. to make them versatile.

- Differently abled persons (with impaired hearing and speech) were trained for routine cleaning of solar panels at the GENSU Solar Plant, thus providing them a dignified livelihood.

- Employment to uneducated and destitute locals for horticulture, house keeping and canteen work.

- Community healthcare:

SWADHAR - the community health care centre at SUGEN Plant, provides primary health care facilities at nominal cost to the surrounding communities. In the latter half of FY 2017-18, additional infrastructure was set up at a cost of Rs.1.78 Crore to cover speciality consulting in Dental, Opthalmology, Dermatology, Gynaecology and Physiotherapy. During FY 2017-18, the Company has spent Rs.0.06 Crore on Swadhar activities benefitting about 47,000 persons.

- Donations

The Company also made donations amounting to Rs.7.67 Crore to various organisations involved in CSR activities related to healthcare, education, arts & culture, science, relief to disaster victims; socio-economic development including de-addiction, skill development; self-help groups, youth, upliftment of women, integrated development of tribes; etc.

8. FINANCE

During FY 2017-18, the Company has tied up long term loans of Rs.830 Crore for routine Capex for its existing areas of operations. Further, loan of Rs.40 Crore was tied up for part funding of the Companyâs Wind Power Projects at Kutch and Bhavnagar districts in Gujarat.

Outstanding amount towards long term loans, Non-Convertible Debentures (NCDs) and Accelerated Power Development and Reforms Programme (APDRP) loans as on 31^st March, 2018 was Rs.9,337.18 Crore. Details of long term loans of the Company for the year under review are provided in Note 23 to the Consolidated Financial Statements.

The consolidated debt to equity (including deferred tax liability) ratio as at the end of FY 2017-18 was 1.01 (PY - 1.06).

Credit Rating of the Companyâs long term loans, cash credit and NCDs has been reaffirmed by CRISIL at AA- / Stable and that of Letters of credit / bank guarantees of the Company has been reaffirmed at A1 .

During the year under review, the Company has neither accepted nor renewed any deposits.

9. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The particulars of contracts or arrangements with related parties are given in the prescribed Form AOC-2, appended herewith as Annexure B and in the section on Related Party Transactions in the Report on Corporate Governance.

10. DIRECTORSâ RESPONSIBILITY STATEMENT

In terms of Section 134(3) of the Companies Act, 2013, the Board of Directors states that:

a) in preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

d) the annual accounts have been prepared on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

11. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to Financial Statements. During the year, such controls were tested and no reportable material weakness was observed.

12. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

Besides the existing subsidiaries of the Company, the Company has acquired 100% equity share capital of two Companies namely; Jodhpur Wind Farms Private Limited and Latur Renewables Private Limited during the year. The Board reviews the affairs of the Companyâs subsidiaries at regular intervals. In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared Consolidated Financial Statements of the Company which form part of this Annual Report. Further, a statement containing salient features of the Financial Statements of the Companyâs subsidiaries and associates is given in prescribed form AOC-1 which forms part of this Annual report at page no. 237

The Company, jointly with Torrent Pharmaceuticals Limited, promoted two Section 8 Companies under the Companies Act, 2013, viz. Tornascent Care Institute and UNM Foundation for the purpose of carrying out CSR activities, which are detailed in section 7 of this report.

13. CORPORATE GOVERNANCE

The Corporate Governance philosophy of the Company rests on five basic principles viz. protection of rights & interests of members, equality in treatment of all members, disclosure of timely & accurate information, strategic guidance & effective monitoring by the Board and accountability of the Board to the Company & its members. As stipulated by Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Report on Corporate Governance forms part of this Annual Report. Certificate of the Auditors regarding compliance with the conditions of Corporate Governance as stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to the Boardâs Report as Annexure C.

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTMENT, RESIGNATION AND RETIREMENT

The Members of the Company had at the 13^th Annual General Meeting held on 1^st August, 2017 appointed Shri Pankaj Joshi, IAS (holding DIN: 01532892), then an Additional Director of the Company, as a Director with effect from 1^st August, 2017 who shall be liable to retire by rotation pursuant to the applicable provisions of the Companies Act, 2013. Shri R. Ravichandran (holding DIN: 06737497) retired at the same meeting and the vacancy caused by such retirement was not filled up.

During the year under review, Shri Markand Bhatt, Whole-time Director of the Company expressed his desire to relinquish his responsibilities, both as Whole-time Director and as member of the Board. Acknowledging the possible implications, Shri Bhatt had consented to work on a transition plan over the course of next few months to install appropriate new arrangements. Considering Shri Bhattâs desire for relinquishment and offer to work on transition plan so as to ensure continuity and minimal disruption, the Board had at its meeting held on 7^th February, 2018 approved that he will continue his term till 30^th September, 2018.

In the same Board meeting held on 7^th February, 2018, Shri Sudhir Mehta, had also expressed his desire to relinquish the position as the Chairman of the Board and the Company, w.e.f. 1^st April, 2018, with a view to spend more time on social, educational and religious activities in which he is involved and also spare more time for himself. The Board has agreed to his request with great reluctance, in view of Shri Sudhir Mehta agreeing to continue as a permanent member of the Board of the Company. The Board conferred upon him the position of Chairman Emeritus w.e.f. 1^st April, 2018 so that his wisdom and counsel on key business and strategic matters would continue to be available to the Board and the Company.

The Board had further at their aforesaid meeting, subject to the approval of the shareholders, appointed Shri Samir Mehta, Vice Chairman, as Executive Chairman of the Company and Shri Jinal Mehta, Whole-time Director as Managing Director of the Company effective from 1^st April, 2018.

Shri T. P. Vijayasarathy, Chief Financial Officer of the Company will be taking up a new role in the Company and had thus requested for his relinquishment as the Chief Financial Officer and Whole-time Key Managerial Personnel of the Company effective from close of working hours of 29^th May, 2018. To fulfill the vacancy caused due to his relinquishment of the position of Chief Financial Officer, the Board had appointed Shri Sanjay Dalal as Chief Financial Officer and Whole-time Key Managerial Personnel of the Company effective from 30^th May, 2018.

Shri Darshan Soni, Company Secretary & Whole-time Key Managerial Personnel had resigned from the services of the Company effective from the close of business hours on 3^rd March, 2018.

The shareholders, at various meetings appointed Smt. Bhavna Doshi (till 3^rd August, 2018), Ms. Dharmishta N. Raval (till 15^th October, 2018 ), Shri Samir Barua (till 31^st March, 2019), Shri Keki Mistry (till 31^st March, 2019) and Shri Pankaj Patel (till 31^st March, 2019) as Independet Directors of the Company. Their above term (being first term) will end between this Annual General Meeting (AGM) and Fifteenth AGM. Therefore, the Board hereby recommends to the shareholders, for their approval, the re-appointment of Independent Directors for second term as mentioned in the Notice forming part of this Annual Report.

As per the provisions of the Companies Act, 2013, Shri Samir Mehta (holding DIN: 00061903), Director, retires by rotation and being eligible, has offered himself for re-appointment.

A brief resume and other relevant details of the Directors proposed to be appointed / re-appointed are given in the Explanatory Statement to the Notice convening the Fourteenth AGM.

DECLARATION BY INDEPENDENT DIRECTORS

Pursuant to section 149(7) of the Companies Act, 2013, the Company has received necessary declaration from each Independent Director confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

15. POLICY ON DIRECTORSâ APPOINTMENT

The Nomination and Remuneration Committee (NRC) has approved the following criteria and process for identification / appointment of Directors:

Criteria for appointment:

i. Proposed Director (âPersonâ) shall meet all statutory requirements and should:

- possess the highest ethics, integrity and values

- not have direct / indirect conflict with present or potential business / operations of the Company

- have the balance and maturity of judgment

- be willing to devote sufficient time and energy

- have demonstrated leadership and vision at senior levels, and have the ability to articulate a clear direction for the Company

- have relevant experience with respect to Companyâs business (In exceptional circumstances, specialisation / expertise in unrelated areas may also be considered)

- have appropriate comprehension to understand or be able to acquire that understanding: o relating to Corporate functioning

- concerning the scale, complexity of business and specific market and environment factors affecting the functioning of the Company.

ii. The appointment shall be in compliance with the Board Diversity Policy of the Company.

Process for Identification / Appointment of Directors:

i. Board Members may (formally or informally) suggest any potential person to the Chairman of the Company meeting the above criteria. If the Chairman deems fit, necessary recommendation shall be made by him to the NRC.

ii. Chairman of the Company can himself also refer any potential person meeting the above criteria to the NRC.

iii. NRC will process the matter and recommend such proposal to the Board.

iv. Board will consider such proposal on merit and decide suitably.

16. CRITERIA FOR PERFORMANCE EVALUATION

The criteria for performance evaluation of itself, that of its Committees and Individual Directors as laid down by the Board of Directors is as follows:

Evaluation of	Criteria for Evaluation
Board	- Degree of fulfilment of key responsibilities including special responsibilities as under: - Focus on strategic and policy issues - Governance and compliance - Stakeholdersâ value and responsibility - Effectiveness of Board process and information sharing - Board culture and dynamics - Quality of decisions - Establishment and delineation of responsibilities to Committees - Facilitation of Independent Directors
Committees	- Degree of fulfilment of key responsibilities - Frequency and effectiveness of meetings - Committee dynamics, especially openness of discussions, including with the Board - Adequacy of Committee composition - Quality of relationship of the Committee with the Board and the Management
Individual Directors	- Fulfillment of functions - Participation in Board in terms of adequacy (time & content) - Contribution at meetings - Guidance / support to Management outside Board / Committee meetings - Independent views and judgement (only for Independent Directors)

17. MANNER OF EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The evaluation of Board, its Committees and Individual Directors was carried out as per the process and criteria laid down by the Board of Directors based on the recommendation of the NRC.

The obtaining and consolidation of feedback from all Directors in this regards, was co-ordinated by the Chairman. Based on this, the Chairman briefed the Board and each of the Individual Directors, as applicable.

18. MEETINGS OF THE BOARD & COMPLIANCE TO SECRETARIAL STANDARDS

The Board meets at regular intervals with gap between two meetings not exceeding 120 days. During FY 2017-18, the Board met five times.

The Company has complied with the provisions of Secretarial Standard 1 (relating to meetings of the Board of Directors) and Secretarial Standard 2 (relating to General meetings) during the year.

19. REMUNERATION

REMUNERATION POLICY

The Company has in place the policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees of the Company which is as under:

Components of Remuneration

i. Fixed Pay comprising Basic Salary, HRA, Car Allowance (applicable to General Managers & above employees), Conveyance Allowances / Reimbursement, Companyâs contribution to Provident Fund, Superannuation Fund, Gratuity, etc.

ii. Variable Pay, which is either in the form of:

- Commission to Managing Directors

- Commission to Whole-time Directors

- Performance Based Pay to General Managers & above based on individual and unit performance

- One-time reward for identified employees in exceptional cases who undertake tasks which go beyond their normal call of duty and play a crucial role in the success of an event.

iii. Retention Pay: In cases, where stability is an issue, part of the CTC is kept as retention pay which is being paid after 3 years or more.

Such remuneration is determined at the time of recruitment based on various factors such as Educational Qualification, Experience, Competence, Current CTC, Internal Equity and / or External Market comparison, changeover cost, etc.

Annual Appraisal Process

i. Annual Appraisals are conducted following which annual increments and promotions in deserving cases are decided once in a year based on:

- Employeesâ self-assessment

- Assessment by Immediate Superior and

- Assessment by Head of Department

ii. Annual Increment leading to an increase in Fixed Pay consists of

- Economic Rise based on All India Consumer Price Index published by the Government of India.

- Performance Rise based on industry and overall business scenario and factoring the following aspects: o Companyâs performance vis-a-vis the industry

- Unitâs performance (based on which the overall ceiling for remuneration and performance based pay at Unit level are determined).

- Individual Performance / track record.

- Promotion Rise

iii. Also, Performance Based Pay i.e. Variable Pay (to General Manager & above employees) is based on annual appraisal process.

iv. The increments as decided for a particular financial year are paid during the subsequent financial year. For example, the performance appraisal of an employee for FY 2017-18 is conducted in FY 2018-19 and his salary rise in FY 2018-19 reflects his performance for FY 2017-18.

Remuneration of Non-Executive Directors:

The Company has formulated a Policy for the remuneration of Non-Executive Directors as follows:

i. Sitting Fees of Rs.1 lakh for each meeting of the Board or any Committee thereof attended by them;

ii. Commission on the basis of participation in the meetings of Board and Audit & Risk Management Committee subject to the condition that total commission paid to all Directors (other than Managing Director or Whole-time Director) including Goods and Services Tax (GST) thereon shall not exceed the limit of 1% of net profits in a financial year as laid down under the provisions of Section 197(1) of the Companies Act, 2013 read with Section 198 of the Act.

iii. Non-Executive Directors will be reimbursed for all the expenses incurred for attending any meeting of the Board or Committees thereof and which may arise from performance of any special assignments given by the Board.

20. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures pertaining to remuneration and other details are provided in the Annexure D to this Report.

21. AUDITORS STATUTORY AUDITORS

The shareholders had at the Thirteenth AGM of the Company appointed M/s. Price Waterhouse Chartered Accountants LLP as Statutory Auditors of the Company to hold office from the close of the Thirteenth AGM till the conclusion of the Eighteenth AGM, subject to their appointment being ratified by the shareholders in every AGM.

The Ministry of Corporate Affairs vide Companies Amendment Act, 2017 omitted the requirement related to ratification of appointment of statutory auditors by members at every AGM w.e.f. 7th May, 2018. Pursuant to the amendment, the Board hereby recommends to the shareholders for their approval that the requirement of seeking ratification of appointment of Statutory Auditors (M/s. Price Waterhouse Chartered Accountants LLP) at every Annual General Meeting (referred in the resolution passed at the Shareholders meeting held on 1st August, 2017), be deleted.

The Auditorsâ Report for FY 2017-18 forms part of this Annual Report and does not contain any qualification, reservation or adverse remark.

COST AUDITORS

Pursuant to section 148(3) of the Companies Act, 2013, M/s. Kirit Mehta & Co., Cost Accountants, Mumbai had been appointed as the Cost Auditors of the Company for FY 2017-18 by the Board of Directors and their remuneration was ratified by members at the Thirteenth AGM of the Company. The Cost Audit Report for FY 2016-17 does not contain any qualification and was filed on 24^th August, 2017 with the Central Government (within the prescribed time limit) pursuant to Section 148(6) of the Companies Act, 2013.

SECRETARIAL AUDITORS

Pursuant to Section 204 of the Companies Act, 2013 read with Rules thereof, the Board of Directors had appointed M/s. M. C. Gupta & Co., Company Secretaries, Ahmedabad, as Secretarial Auditors of the Company for FY 2017-18. The Secretarial Audit Report for FY 2017-18 is annexed herewith as Annexure E.

There are no adverse observations in the Secretarial Audit Report which call for explanation.

22. AUDIT AND RISK MANAGEMENT

The Composition of the Audit and Risk Management Committee is in compliance with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 177 of the Companies Act, 2013. Composition of the Committee as on 31^st March, 2018 is given below:

COMPOSITION OF THE COMMITTEE

Name of the Director	Category of Directorship
Shri Keki Mistry, Chairman	Independent Director
Shri Samir Barua	Independent Director
Shri Kiran Karnik	Independent Director
Smt. Bhavna Doshi	Independent Director
Ms. Dharmishta Raval	Independent Director

During the year, the Board has accepted all the recommendations made by the Audit and Risk Management Committee.

VIGIL MECHANISM

The Company has in place a Whistle Blower Policy pursuant to the applicable statutory requirements. The Policy empowers all the Stakeholders to raise concerns by making Protected Disclosures as defined in the Policy. The Policy also provides for adequate safeguards against victimization of Whistle Blower who uses such mechanism and also provides for direct access to the Chairman of the Audit and Risk Management Committee, in exceptional cases. The functioning of the Whistle Blower mechanism is reviewed by the Audit and Risk Management Committee on a quarterly basis. The details of the Whistle Blower Policy are explained in the Report on Corporate Governance and the Policy is available on the website of the Company at http://www.torrentpower.com/pdf/investors/02-06-2016_6mbme_whistle_ blower_policy.pdf

RISK MANAGEMENT

The Company has in place a Risk Management framework for a systematic approach to control risks. The Risk Management Policy of the Company lays down procedures for risk identification, assessment, monitoring, review and reporting. The Policy also lists the roles and responsibilities of Board, Risk Management Committee, Chief Risk Officer, Risk Champions and Co-ordinators. Internal and external risks, with potential impact and likelihood, that may impact the Company in achieving its strategic objectives or may threaten its existence have been identified and assessed.

23. THE EXTRACT OF THE ANNUAL RETURN

The extract of the Annual Return in Form MGT-9 is appended herewith as Annexure F to this Report.

24. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The details relating to conservation of energy, technology absorption, foreign exchange earnings and outgo prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are given in the Annexure G which forms part of this Report.

25. APPRECIATION AND ACKNOWLEDGEMENTS

The Board of Directors is pleased to place on record its appreciation for the continued guidance and support received from the Government of India, the State Governments, the Central and State Electricity Regulatory Commissions / Authorities, the National, Regional and State Load Dispatch Centres, Regional Power Committees, Gujarat Energy Development Agency, Karnataka Renewable Energy Development Limited, Bureau of Energy Efficiency, Chief Electrical Inspectors of Gujarat, Uttar Pradesh, Maharashtra and Karnataka, State Energy Developers, State Discoms, Central and State Transmission Companies, Solar Energy Corporation of India Limited, NABL (Quality Council of India), Petroleum and Natural Gas Regulatory Board, the Gram Panchayats, Taluka Panchayats, District Collectors, Local Authorities, Corporation and Municipal Authorities of the areas of Companyâs operation, Contractors, Fuel Suppliers and Transporters, Power Exchanges, Banks, Financial Institutions and Security Trustees. The Board is thankful to the Members, Auditors, Consultants, Vendors, Service Providers, Insurers and all its Employees for their unstinted support and contribution. The Board also recognizes the contribution of the esteemed Consumers to the growth of the Company and takes this opportunity to pledge the Companyâs commitment to serve them better.

For and on behalf of the Board of Directors

Ahmedabad Samir Mehta

29^th May, 2018 Chairman

DIN: 00061903

Mar 31, 2017

Dear Members,

The Directors are pleased to present the Thirteenth Annual Report of the Company together with the Audited Accounts for the financial year ended 31^st March, 2017

1. HIGHLIGHTS

The key highlights for the Financial Year 2016-17 are:

- Financial performance of the Company on consolidated basis: o Decrease in Total Income by 14.61% to Rs,10,244.44 Crore o Decrease in PBDIT by 20.71% to Rs,2,651.18 Crore

o Decrease in Total Comprehensive Income (after Non-controlling interest) by 52.70% to Rs,422.58 Crore

- The Distribution Franchise Agreement with MSEDCL for distribution of power in Bhiwandi Circle has been renewed for a further period of 10 years w.e.f. January 26, 2017.

- Honâble GERC, vide Tariff Order dated 31^st March, 2016, had allowed recovery of Regulatory Charge @ ''0.45 per unit to address the gap of earlier years. Subsequently, vide order dated 1^st July 2016, Honâble GERC reduced the same to ''0.18 per unit and ''0.17 per unit for Ahmadabad and Surat respectively against which the Company had filed an appeal before Honâble Appellate Tribunal For Electricity (APTEL). Honâble APTEL, vide order dated 30^th March, 2017 and without expressing any opinion on the merits of the case, set aside the order dated 1^st July 2016 and remanded the matter back to Honâble GERC with a direction that members who passed the original tariff order dated 31^st March, 2016 shall hear afresh the review petitions filed with respect to the order and shall pass appropriate orders. Accordingly, it is expected that the True-up order for FY 2015-16 and Tariff order for FY 2017-18 would be passed by Honâble GERC only after an appropriate order w.r.t the tariff order dated 31^st March, 2016 is issued.

- The Storage-cum-degasification capacity contracted at Petronet LNG Limitedâs Dahej Terminal has commenced from 1^st April, 2017. The Company has contracted 7 LNG cargoes to be imported during April 2017 to December 2017 to meet its generation obligations.

- Honâble Central Electricity Regulatory Commission (CERC) has issued tariff orders dated 18^th August, 2016 and 31^st March, 2017 for the tariff period 2014-19 for UNOSUGEN and DGEN Plants respectively.

- After the successful launch of âTorrent Power Connectâ, the online service portal as well as mobile application, the Company has upgraded the infrastructure and service quality at the new model Service Centre âPLUGPOINTâ in Ahmadabad area, on a pilot basis. The new Service Centre provides a complete digital service experience to the customers at large.

- 216 MW Wind Power Projects, comprising 201.6 MW at Nakhatrana and Jamanwada Sites in Kutch district and 14.4 MW at Mahidad Site in Rajkot district, have been successfully commissioned during the year. Further, wind power projects consisting of 50.4 MW at Mahuva Site in Bhavnagar district and 46.4 MW at Mahidad Site in Rajkot district are under implementation. The Company has also enhanced the capacity at GENSU Solar Power plant from 81 MW to 87 MW. With this, the total operational and under-construction renewable power capacity of the Company has crossed 500 MW.

FINANCIAL RESULTS

Summary of the financial results of the Company for the year under review is as under:

(Rs, in Crore)

	Standalone		Consolidated
Particulars	For the year ended 31^st	For the year ended 31^st	For the year ended 31^st	For the year ended 31^st
	March, 2017	March, 2016	March, 2017	March, 2016
Total Income	10,206.89	11,944.65	10,244.44	11,997.77
Profit Before Depreciation, Interest and Tax	2,619.92	3,296.03	2,651.18	3,343.56
Depreciation	989.42	899.29	1,005.86	915.74
Finance Costs	1,046.56	1,116.24	1,057.98	1,130.78
Profit Before Exceptional Items and Tax	583.94	1,280.50	587.34	1,297.04
Exceptional Items	-	7.41	-	7.41
Profit Before Tax	583.94	1,273.09	587.34	1,289.63
Current Tax	128.30	261.16	130.30	265.63
Deferred Tax	29.63	109.61	33.60	118.55
Short / (Excess) provision of current tax for earlier	(6.35)	3.21	(6.35)	3.21
years
Non-controlling Interest	-	-	0.84	2.04
Profit for the period	432.36	899.11	428.95	900.20
Other comprehensive income(net of tax)	(6.36)	(6.85)	(6.37)	(6.85)
Total comprehensive income for the year	426.00	892.26	422.58	893.35
Add: Balance brought forward	2,216.07	1,695.16	2,228.05	1,706.80
Balance available for Appropriation	2,642.07	2,587.42	2,650.63	2,600.15
Appropriations
Transfer to Contingency Reserve	1.68	1.65	1.68	1.65
Transfer to Debenture Redemption Reserve	34.22	23.81	34.22	23.81
Transfer to General Reserve	-	-	-	-
Dividends
Dividend (including interim dividend) paid	-	288.01	-	288.01
Dividend distribution tax paid	-	57.88	0.95	58.63
Balance carried to Balance Sheet	2,606.17	2,216.07	2,613.78	2,228.05
Basic and Diluted Earnings per Share - (Rs, per share)	9.00	18.71	8.93	18.73

Note: From 1^st April, 2016, the Company has adopted accounting standards notified under Companies (Indian Accounting Standards) Rules, 2015 (âInd ASâ). Accordingly the financial results for the previous periods are restated as per Ind AS.

2. DIVIDEND

The Company, as a policy, endeavours to distribute approx. 30% of its consolidated annual profits after tax as dividend in one or more tranches. Following the said policy, the Board of Directors, on 23^rd May, 2017, recommended dividend of Rs,2.20 per equity share having face value of Rs,10/- on 48,06,16,784 equity shares (PY - Rs,4.50 per equity share having face value of Rs,10/- on 48,06,16,784 equity shares), amounting to Rs,105.73 Crore (PY - Rs,216.28 Crore).

With Dividend Distribution Tax of Rs,21.53 Crore (PY - Rs,44.03 Crore), the total outflow on account of dividend works out to Rs,127.26 Crore (PY - Rs,260.31 Crore) i.e. 30.12% (PY - 29.14%) of consolidated Total Comprehensive Income for FY 2016-17.

The Dividend Distribution Policy of the Company can be accessed at the Companyâs website: http://www.torrentpower. com/pdf/investors/06-01-2017_hfl6a_Dividend_Distribution_ Policy.pdf.

3. MANAGEMENT DISCUSSION AND ANALYSIS

As stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report forms part of this Annual Report.

4. CUSTOMER INITIATIVES

The customer centric approach of the Company ensures highest level of services to the customers through adoption of new technology, processes, and innovative ideas. Some of the key developments in this regard during FY 2016-17 include; (a) opening of 300 new collection centres, (b) up gradation of infrastructure & service quality at the new model Service Centre âPLUGPOINTâ in Ahmadabad, (c) regular SMS / Mobile App notifications regarding bill generation, payment, status on query / complaints, scheduled shutdowns, etc., (d) enabling submission of own meter reading by consumer through Service portal, etc. and (e) Redesigning of the bill format to include more information like past consumption, Security deposit amount, explanation of the billed amount, safety & energy conservation tips etc.

5. ENVIRONMENT, HEALTH AND SAFETY (EHS)

The Company accords utmost importance to environment, health and safety in its various operations. The key developments concerning environment, health and safety during FY 2016-17 include:

- Meghdhanush, the township at Dgen, has been rated in Platinum category (the highest rating) in the green building rating scale, by the Indian Green Building Council.

- IMS implementation at Distribution units (Ahmadabad, Surat and Dahej), GENSU plant and new Corporate Office covering certifications under ISO 14001 (Environment Management System), OHSAS 18001 (Occupational Health and Safety Assessment Series) and ISO 9001 (Quality Management System). Additionally, as part of such implementation, the Distribution units have obtained certifications under ISO 50001 (Energy Management System) and ISO 55001 (Asset Management System).

- Up gradation of existing Occupational Health Unit with advanced equipments and facilities for better diagnosis and monitoring of employeesâ health at AMGEN.

- Integration of various active as well as passive design strategies to ensure a climate responsive and energy efficient design, resulting into ~70% lesser electricity consumption at new Corporate Office.

- Other key EHS initiatives include, Rainwater harvesting system in DGEN; Water filtration and pre-treatment plant at Meghdhanush; Safety training programs for differently abled persons at GENSU, Safety awareness programs, emphasis on e-bill registration, Usage of environmental friendly bio-degradable Ester oil in place of mineral oil in Distribution transformers, Celebrations of EHS / Road / Electrical / Chemical / Mechanical safety week, National Safety Day, National Fire Service Day, World Environment Day, Earth Day, etc.

Moreover, the Company has in place the âConviction for Safetyâ policy which provides for substantial compensation to the personnel (Employees as well as Contractors) and their families, who are adversely affected by accidents.

6. HUMAN RESOURCES

Adapting to change is quintessential to a growing organizationâs longevity. Over the time, Torrent has changed to adapt and evolve with the changing economic landscape, while keeping its core values firmly entrenched.

The Human Resource (HR) Department has strategic and functional responsibilities for all of the HR disciplines in this changing scenario. There are four corresponding roles for HR: a) as a strategic partner working to align HR and business strategy, b) as an administrative expert working to improve organizational processes and deliver basic HR services, c) as an employee champion, listening and responding to employeesâ needs, and d) as a change agent managing change processes to increase the effectiveness of the organization.

Within organization, Human Resource Department has active engagement with employee issues, listening to their concerns, and building a professional and stable relation between employees and employers. Managing expectations, being flexible, communicating and adequate training are few of the most significant factors in keeping employees contented. Human Resource Department conducts performance appraisals, career development and up skilling, developing effective reward systems and designing jobs to fit both the needs of the business and employees.

On the Statutory front, during the year under review, there was no case received under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The year also saw reinforcement of the already existing âWhistle Blowerâ policy in order to emphasize and encourage reporting of any wrongdoing or any unethical practice.

On the industrial front, the Company continued to foster cordial industrial relations with its workforce during the year.

The Company has a diverse workforce of 7,414 employees as on 31^st March, 2017 vis-a-vis 7,296 employees as on 31^st March, 2016. Going forward, the Company will continue to focus on nurturing the right talent to achieve the business goal.

7. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Torrent Group believes in the well being of the society at large. As a social corporate citizen, it has always believed in the philosophy of âThink of others also when you think about yourselfâ.â Over past many years, the Group has contributed to the society in the field of Community Healthcare, Sanitation & Hygiene, Education & Knowledge enhancement and Social Care & Concern.

In line with the provisions of the Companies Act, 2013 and Rules made there under, a Corporate Social Responsibility Committee has been formed by the Board of Directors. The Composition of the CSR Committee is as under:

Name of Director Category of Directorship

Smt. Bhavna Doshi, Chairperson Independent Director

Shri Samir Barua Independent Director

Shri Jinal Mehta Whole-time Director

During FY 2016-17, the CSR programs and activities undertaken at Group level are described hereunder:

- REACH: In January 2016, Torrent Power Limited and Torrent Pharmaceuticals Limited jointly initiated a Child Centric Health Care Program - REACH - Reach EAch CHild under the aegis of Tornascent Care Institute (section 8 company of Torrent Group). The program encompasses three major activities: (a) SHAISHAV for grass root intervention; (b) JATAN for Greenfield action; and (c) MUSKAN for other allied initiatives. The focus during FY 2016-17 was mainly on SHAISHAV, wherein following activities were carried out:

- Identification of villages with underserved population around the four regions where Torrent Group has its manufacturing facilities i.e. Indrad, Nadiad, Surat and Dahej.

- Conducting 157 paediatric camps covering 219 villages and 36,142 children (in the age group of 6 months to 6 years) to obtain their base line health status, identify and treat anaemia and malnutrition and provide specialized treatment to those identified with other ailments like cardiac, neurological and respiratory disorders.

Periodic assessments and follow-up actions for all such cases are being undertaken under the supervision of qualified Pediatricians. The initial results were encouraging with 66% children cured of their anemic condition and around 52% of children pulled out of severe malnourishment. Around 405 children were provided specialized treatment for cardiac, neurological, respiratory, etc. disorder.

During later part of the year, the following activities under Greenfield Action- âJATAN were initiated:

- Procurement of Mobile vans for all the four locations for providing mobile OPDs and reaching out to the villages covered under SHAISHAV.

- Starting of two fully equiped Paediatric Centres at Sugen (near Surat) and Pakhajan (near Dahej) to provide free high quality primary medical treatment to the nearby villages.

- Shiksha Setu - During FY 2016-17 under UNM Foundation, Phase II of the Program was initiated in 13 schools, located in Sugen, Chhatral, Chhapi, Memadpur and Ahmadabad locations covering about 4,300 students and 150 teachers. The following activities were conducted under the programme in FY 2016-17:

- Provision of ~ 1,250 Tablets and 20 smart boards in 13 programme schools.

- Training to the students and teachers on the new educational tools.

- Step by step improvisation in the tools based on the feedbacks received from the teachers and students from different schools

- Community meetings involving more than 1,500 parents to seek their support.

The Annual Report on CSR Activities is given as Annexure A to this Report which indicates that the Company has spent Rs,13.45 Crore (more than 2% of the average net profits of last three financial years) in this regard.

Other CSR initiatives undertaken by the Company during FY 2016-17 include:

- Creating livelihood:

o 42 days intensive training course, developed in-house by the security team at Sugen, covering security, basic firefighting, personality development and working knowledge of computers was conducted. Training was provided to 44 unemployed youths with basic primary education from nearby villages at Sugen and Dgen before absorbing them into security services at the plant sites of Sugen and Dgen.

o Training for multi skilling was organized for security guards:

- To work as âSuraksha Dootsâ during execution of projects.

- Selected guards were put through advanced fire fighterâs training to act as reserve âSecond Line Reserve of Fire Fighters.

- Selected 19 security guards are undergoing driving training to enhance their driving skill and obtain LMV licenses.

- New activity of in-house housekeeping training has been initiated with curriculum incorporating physical fitness, training, personality development, basic housekeeping, handling of light and heavy housekeeping machines, preparation of guest rooms and working in canteens.

- Continuing the initiative since FY 2015-16, 42 differently abled persons (with impaired hearing and speech) were deployed for cleaning of solar panels at the GENSU Solar Plant, thus providing them a dignified livelihood.

- Community healthcare: SWADHAR - the community health care center at SUGEN Plant, not only provided primary health care facilities at very nominal cost to surrounding communities, but also promoted health, hygiene and sanitation through various camps during the year. During FY 2016-17 about 14,500 persons benefitted from SWADHAR activities.

- Sanitation: With a view to build user friendly and long lasting toilets, the Company provided an additional amount of ''23,500 per household, over and above the subsidy of ''12,000/- provided by the Government under âSwachh Bharat Missionâ for construction of individual household toilets, at Akhakhol village near its Sugen plant. An added feature of the project was the active labour work done by the users in the making of such toilets (âShram Daanâ). During FY 2016-17, 125 households benefited under the project.

- The Company also made donations to various organizations involved in activities related to education, health, socio-economic development, culture, integrated development of tribes, relief to disaster victims, promotion of social welfare, etc.

8. SCHEME OF ARRANGEMENT

The Honâble High Court of Gujarat vide its order dated 14^th October, 2016 has sanctioned the Scheme of Arrangement between Torrent Solargen Limited (TSL) and Torrent Power Limited (TPL) (âSchemeâ). The Scheme envisaged transfer of Solar Energy Undertaking and Wind Energy Undertaking from TSL to TPL on a going concern basis by way of slump sale for a lumpsum cash consideration as recommended by an Independent Chartered Accountant with effect from the Appointed Date i.e. 1^st April, 2015. The effective date of the scheme is 1^st December, 2016.

9. FINANCE

During the year under review, the Company raised long term loans to the tune of ''1,087 Crore for refinancing some of its existing loans. The Company has tied up long term loans of ''488.19 Crore for part funding of its renewable projects at Charanka (solar) and Mahidad (wind) in Gujarat. Further, the Company had issued Non-Convertible Debentures (NCDs) of ''245 crore and has also tied up long term loans of Rs,385 Crore, inter alia, for part funding of its wind project at Kutch and Bhavnagar districts in Gujarat.

Outstanding amount towards long term loans, NCDs and APDRP loans as on 31^st March, 2017 was Rs,8,630.89 Crore. Details of long term loans of the Company for the year under review are provided in Note 24 to the Financial Statements.

During the year under review, lenders of the existing long term loans of the Company approved significant reduction in interest rate.

The consolidated debt to equity (including deferred tax liability) ratio as at the end of FY 2016-17 was 1.06 (PY - 1.10).

Credit Rating of the Companyâs long term loans, cash credit and NCDs has been Reaffirmed by CRISIL at AA- / Stable and that of Letters of credit / bank guarantees of the Company has been Reaffirmed at A1 .

During the year under review, the Company has neither accepted nor renewed any deposits.

10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

11. DIRECTORSâ RESPONSIBILITY STATEMENT

In terms of Section 134(3) of the Companies Act, 2013, the Board of Directors states that:

a) in preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

b) t he Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31^st March, 2017 and of the profits for the year ended 31^st March, 2017;

c) t he Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis;

e) t he Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

12. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to Financial Statements. During the year, such controls were tested and no reportable material weakness was observed.

13. SUBSIDIARIES AND JOINT VENTURES

The Company has four subsidiary companies viz. Torrent Solargen Limited (TSL), Torrent Power Grid Limited, Torrent Pipavav Generation Limited and AEC Cements and Constructions Limited (AECCCL).

The Company, jointly with Torrent Pharmaceuticals Limited, has promoted two Section 8 Companies under the Companies Act, 2013, viz. Tornascent Care Institute and UNM Foundation for the purpose of carrying out CSR activities, which are detailed in section 8 of this report.

The Board reviewed the affairs of the Companyâs subsidiaries during the year at regular intervals. In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared Consolidated Financial Statements of the Company and all its subsidiaries except AECCCL (under liquidation), which form part of this Annual Report. Further, a statement containing salient features of the Financial Statements of the Companyâs subsidiaries and the manner in which associates have been dealt with, forms part of Note 64 of Consolidated Financial Statements in the prescribed format.

14. CORPORATE GOVERNANCE

15. DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTMENT, RESIGNATION AND RETIREMENT

The Members of the Company had at the 12^th Annual General Meeting held on 2^nd August, 2016, appointed Shri P. K. Taneja, IAS (holding DIN: 00010589), an Additional Director of the Company, as a Director with effective from 2^nd August, 2016, who shall be liable to retire by rotation pursuant to the applicable provisions of the Companies Act, 2013. The Members had, in the same meeting, also approved the re-appointment of Shri Markand Bhatt (holding DIN: 00061955), as a Whole time Director of the Company with effect from 1^st April, 2016, for a term of five consecutive years.

Shri P. K. Taneja, IAS resigned from the Board w.e.f. 23^rd May, 2017 consequent upon his retirement on superannuation from IAS. The Board places on record its appreciation for the valuable services rendered by Shri P. K. Taneja, IAS during his tenure as Director of the Company.

The Government of Gujarat has nominated Shri Pankaj Joshi, IAS (holding DIN: 01532892) as its nominee on the Board of the Company and the Company has appointed him as an Additional Director on the Board w.e.f. 23^rd May,

2017 till the commencement of ensuing Annual General Meeting (AGM). It is proposed to appoint him as a Director, liable to retire by rotation, with effect from the ensuing AGM i.e. 1^st August, 2017

DECLARATION BY INDEPENDENT DIRECTORS

Pursuant to Section 149(7) of the Companies Act, 2013, the Company has received necessary declaration from each Independent Director confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

POLICY ON DIRECTORSâ APPOINTMENT

The Nomination and Remuneration Committee (NRC) has approved the following criteria and process for identification / appointment of Directors:

Criteria for appointment:

i. Proposed Director (âPersonâ) shall meet all statutory requirements and should:

- possess the highest ethics, integrity and values

- not have direct / indirect conflict with present or potential business / operations of the Company

- have the balance and maturity of judgment

- be willing to devote sufficient time and energy

- have demonstrated leadership and vision at senior levels, and have the ability to articulate a clear direction for the Company

- have relevant experience with respect to Companyâs business (In exceptional circumstances, specialization / expertise in unrelated areas may also be considered)

- have appropriate comprehension to understand or be able to acquire that understanding o relating to Corporate Functioning

- Involved in scale, complexity of business and specific market and environment factors affecting the functioning of the Company

ii. The appointment shall be in compliance with the Board Diversity Policy of the Company.

Process for Identification / Appointment of Directors:

ii. Chairman of the Company can himself also refer any potential person meeting the above criteria to the NRC.

iii. NRC will process the matter and recommend such proposal to the Board.

iv. Board will consider such proposal on merit and decide suitably.

CRITERIA FOR PERFORMANCE EVALUATION

During the year under review, the Board considered and refined the criteria as well as the process for performance evaluation of itself, that of its Committees and Individual Directors as follows:

Evaluation of Criteria for Evaluation

Board - Degree of fulfillment of key responsibilities including special responsibilities as under:

- Focus on strategic and policy issues

- Governance and compliance

- Stakeholdersâ value and responsibility

- Effectiveness of Board process and information sharing.

- Board culture and dynamics.

- Quality of decisions

- Establishment and delineation of responsibilities to Committees

- Facilitation of Independent Directors.

Evaluation of Criteria for Evaluation

Committee - Degree of fulfillment of key responsibilities.

- Frequency and effectiveness of meetings.

- Committee dynamics, especially openness of discussions, including with the Board.

- Adequacy of Committee composition.

- Quality of relationship of the committee with the Board and the Management.

Individual - Fulfillment of functions

^Directors - Participation in Board in terms of adequacy (time & content).

- Contribution at meetings.

- Guidance / support to Management outside Board / Committee meetings. _- Independent views and judgement (only for Independent Directors)_

MANNER OF EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The evaluation of Board, its Committees and Individual Directors was carried out as per the process and criteria laid down by the Board of Directors based on the recommendation of the Nomination and Remuneration Committee.

The obtaining and consolidation of feedback from all Directors in this regards, was co-ordinate by the Vice Chairman. Based on this, Chairman / Vice Chairman briefed the Board and each of the Individual Directors, as applicable.

NUMBER OF MEETINGS OF THE BOARD

The Board meets at regular interval with gap between two meetings not exceeding 120 days. During the year under review, the Board met four times.

REMUNERATION

REMUNERATION POLICY

The Company has in place the policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees of the Company which is as under:

Components of Remuneration

ii. Variable Pay, which is either in the form of:

- Commission to Managing Directors

- Commission to Whole-time Directors

- Performance Based Pay to General Managers & above (up to 20% of CTC), based on unit performance grades

- One-time reward for identified employees in exceptional cases who undertake tasks which go beyond their normal call of duty and play a crucial role in the success of an event.

iii. Retention Pay: In the case where stability is an issue, part of the CTC is kept as retention pay which is being paid after 3 years or more.

Annual Appraisal Process

i. Annual Appraisals are conducted, following which annual increments and promotions in deserving cases are decided once in a year based on:

- Employees self-assessment

- Assessment by Immediate Superior and

- Assessment by Head of Department

ii. Annual Increment leading to an increase in Fixed Pay consists of

- Economic Rise based on All India Consumer Price Index published by the Government of India or Internal Survey wherein inflation on commonly used items is calculated.

- Performance Rise based on industry and overall business scenario and factoring the following aspects: o Companyâs performance vis-a-vis the industry

o Unit performance is generally carried out based on various financial and non-financial parameters and grades assigned are used for working out the overall ceiling for remuneration and performance based pay at Unit level.

o Individual Performance / track record including care for health / balance between quality of work and family life.

- Promotion Rise

iii. Also, Performance Based Pay i.e. Variable Pay (to General Manager & above employees) is based on annual appraisal process.

iv. The increments as decided for a particular financial year are paid during the subsequent financial year. For example, the performance appraisal of an employee for FY 2016-17 is conducted in FY 2017-18 and his salary rise in FY 2017-18 reflects his performance for FY 2016-17.

Remuneration of Non-Executive Directors:

The Company has formulated a policy for the remuneration of Non-Executive Directors as follows:

i. Sitting Fees of ''1 lac for each meeting of the Board or any Committee thereof, attended by them.

ii. Commission on the basis of participation in the meetings of Board and Audit & Risk Management Committee subject to the condition that total commission paid to all Directors (other than Managing Director or Whole time Director) including service tax thereon shall not exceed the limit of 1% of net profits in a financial year as laid down under the provisions of Section 197(1) of the Companies Act, 2013 read with Section 198 of the Act.

iii. Non-Executive Directors will be reimbursed for all the expenses incurred for attending any meeting of the Board or Committees thereof, and which may arise from performance of any special assignments given by the Board.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

I n terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures pertaining to remuneration and other details are provided in Annexure D to this Report.

17 AUDITORS STATUTORY AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, the Statutory Auditors of the Company retire at the ensuing Annual General Meeting.

The Statutory Auditors have completed the maximum tenure to serve as the Statutory auditors according to provisions of the Companies Act, 2013. Hence, the Statutory Auditors need to be rotated at the 13^th Annual General Meeting of the Company. Accordingly, the Board hereby recommends the appointment of Price Waterhouse Chartered Accountants LLP as Statutory Auditors of the Company to hold the office from the close of the 13^th Annual General Meeting till the conclusion of the 18^th Annual General Meeting, subject to their appointment being ratified by the shareholders in every Annual General Meeting.

The Auditorsâ Report for FY 2016-17 forms part of this Annual Report and does not contain any qualification, reservation or adverse remark.

COST AUDITORS

Pursuant to Section 148(3) of the Companies Act, 2013, M/s. Kirit Mehta & Co., Cost Accountants, Mumbai had been appointed as the Cost Auditors of the Company for FY 2016-17 by the Board of Directors and their remuneration was ratified by members at the 12^th Annual General Meeting of the Company. The Cost Audit Report for FY 2015-16 was filed on 31^st August, 2016 with the Central Government (within the prescribed time limit) pursuant to Section 148(6) of the Companies Act, 2013.

SECRETARIAL AUDITORS

Pursuant to Section 204 of the Companies Act, 2013 read with Rules thereof, the Board of Directors had appointed M/s. M. C. Gupta & Co., Company Secretaries, Ahmadabad, as Secretarial Auditors of the Company for FY 2016-17 The Secretarial Audit Report for FY 2016-17 is annexed herewith as Annexure E.

There are no adverse observations in the Secretarial Audit Report which call for explanation.

18. AUDIT AND RISK MANAGEMENT

The Composition of the Audit and Risk Management Committee is in compliance with the provisions of the SEBI (LODR) Regulations, 2015 and Section 177 of the Companies Act, 2013. Composition of the Committee as on 31^st March, 2017 is given below:

COMPOSITION OF THE COMMITTEE Name of the Director Category of Directorship

Shri Keki Mistry, Chairman Independent Director

Shri Samir Barua Independent Director

Shri Kiran Karnik Independent Director

Smt. Bhavna Doshi Independent Director

Ms. Dharmishta Raval_Independent Director_

During the year, the Board has accepted all the recommendations made by the Audit and Risk Management Committee. VIGIL MECHANISM

RISK MANAGEMENT

The Company has in place a Risk Management framework for a systematic approach to control risks. The Risk Management Policy of the Company lays down procedures for risk identification, assessment, monitoring, review and reporting. The Policy also lists the roles and responsibilities of Board, Risk Management Committee, Chief Risk Officer, Risk Champions and Co-coordinators. Internal and external risks, with potential impact and likelihood, that may impact the Company in achieving its strategic objectives or may threaten its existence have been identified and assessed.

19. THE EXTRACT OF THE ANNUAL RETURN

The extract of the Annual Return in Form MGT-9 is appended herewith as Annexure F to this Report.

20. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

21. APPRECIATION AND ACKNOWLEDGEMENTS

The Board of Directors is pleased to place on record its appreciation for the continued guidance and support received from the Government of India, the State Governments, the Central and State Electricity Regulatory Commissions / Authorities, the National, Regional and State Load Dispatch Centres, Regional Power Committees, Gujarat Energy Development Agency, Bureau of Energy Efficiency, Chief Electrical Inspectors of Gujarat, Uttar Pradesh and Maharashtra, State Energy Developers, State Discoms, National and State Transmission Companies, the Gram Panchayats, Taluka Panchayats, District Collectors, Local Authorities, Corporation and Municipal Authorities of the areas of Companyâs operation, Contractors, Fuel Suppliers and Transporters, Power Exchanges, Banks, Financial Institutions and Security Trustees. The Board is thankful to the Members, Auditors, Consultants, Vendors, Service Providers, Insurers and all its Employees for their unstinted support and contribution. The Board also recognizes the contribution of the esteemed Consumers to the growth of the Company and takes this opportunity to pledge the Companyâs commitment to serve them better.

For and on behalf of the Board of Directors

Ahmadabad Sudhir Mehta

23^rd May, 2017 Chairman

DIN: 00061871

Mar 31, 2015

Dear Members,

The Directors are pleased to present the Eleventh Annual Report of the Company together with the Audited Accounts for the financial year ended 31st March, 2015.

1. STATE OF THE AFFAIRS

HIGHLIGHTS

The key highlights for the Financial Year 2014-15 are:

- Financial performance of the Company on standalone basis: o Increase in Revenue by 20.18% to Rs.10,596.92 Crore o Increase in PBDIT by 63.65% to Rs.2,386.18 Crore o Increase in PAT by 682.43% to Rs.742.06 Crore -

- Financial performance of the Company on consolidated basis: o Increase in Revenue by 20.50% to Rs.10,762.27 Crore

o Increase in PBDIT by 59.48% to Rs.2,446.14 Crore o Increase in PAT (after minority interest) by 241.72% to Rs.359.69 Crore

- 1,200 MW combined cycle gas based DGEN Power Project at Dahej SEZ, District Bharuch, Gujarat, has been successfully commissioned during the year by Torrent Energy Limited, a wholly owned subsidiary of the Company. The plant is yet to be allocated domestic gas.

- SUGEN, UNOSUGEN and DGEN have participated in the "Scheme for utilization of Gas based power generation capacity" by submitting the bids for allotment of Re-gasified Liquefied Natural Gas (RLNG) up to the target PLF and related Power System Development Fund support from the Government.

- Hon''ble Central Electricity Regulatory Commission (CERC) has issued interim true-up tariff order for SUGEN on 1st October, 2014; final true-up tariff order of which is awaited.

- Hon''ble Gujarat Electricity Regulatory Commission (GERC) vide its orders dated 31st March, 2015 on the petitions of the Company for true-up of FY 2013-14 and tariff determination for FY 2015-16 has allowed an average increase of 15 paise per kWh (2.36%) in tariff for Ahmedabad and Surat Distribution. The increase is effective from 1st April, 2015 and is not applicable to BPL consumers, Agricultural consumers and Residential consumers using electricity up to 200 units per month.

- Open access availment by consumers has adversely impacted the sales of the Company''s Ahmedabad license area to the tune of ~431 MUs in FY 2014-15.

- Hon''ble CERC and Hon''ble GERC have accorded their approval for composite scheme of amalgamation of Torrent Energy Limited (TEL) and Torrent Cables Limited (TCL) with Torrent Power Limited (Company) ("Scheme") subject to conditions contained in their respective orders and pursuant to the Hon''ble Gujarat High Court''s (High Court) order, meetings of Equity shareholders of the Company & TCL and meetings of secured as well as unsecured creditors of TEL & TCL have been concluded.

FINANCIAL RESULTS

Summary of the financial results of the Company for the year under review is as under*:

(Rs. in Crore) Standalone Consolidated For the year For the year For the year For the year Particulars ended on 31st endedon 31st endedon 31st endedon 31st March, 2015 March, 2014 March, 2015 March, 2014

Total Revenue 10,596.92 8,817.46 10,762.27 8,931.70

Profit Before Depreciation, Interest and Tax 2,386.18 1,458.14 2,446.14 1,533.85

Depreciation 54798 534.52 720.50 554.37

Finance Costs 706.16 67718 962.29 704.62

Profit Before Tax and Exceptional Items 1,132.04 246.44 763.35 274.86

Exceptional Items 22.99 - 22.99 -

Profit Before Tax 1,109.05 246.44 740.36 274.86

Current Tax 22791 33.50 232.85 40.21

Deferred Tax 139.13 124.62 144.89 133.36

(Excess) / Shortfall in provision for current tax (0.05) (6.52) (0.05) (6.61) for earlier years

Minority Interest - - 2.98 2.64

Profit After Tax & Minority Interest 742.06 94.84 359.69 105.26

Add: Balance brought forward 1,504.80 1,462.41 1,516.16 1,465.50

Add: Transfer from Contingency Reserve - - 0.29 - pertaining to previous year

Balance available for Appropriation 2,246.86 1,557.25 1,876.14 1,570.76

Appropriations

Transfer to Contingency Reserve 1.00 1.00 1.62 1.62

Transfer to Debenture Redemption Reserve 23.81 23.81 23.81 23.81

Transfer to General Reserve - - - -

Dividends

Interim Dividend - - - -

Dividend Distribution Tax on Interim Dividend - - 1.26 1.53

Proposed Dividend 70.87 23.62 70.87 23.62

Dividend Distribution Tax on Proposed Dividend 14.43 4.02 15.42 4.02

Balance carried to Balance Sheet 2,136.75 1,504.80 1,763.16 1,516.16

* Pending requisite approvals including from the High Court of Gujarat / National Law Tribunal as applicable, fulfillment of conditions precedent as mentioned in the Composite Scheme of Amalgamation and further actions, the effect of the Scheme has not been considered in the said financial results.

COMPOSITE SCHEME OF AMALGAMATION

The draft Scheme, with 1st April, 2014 as the Appointed Date, under the provisions of Sections 391-394 of the Companies Act, 1956 was approved by the Board of Directors of the Company, TEL and TCL at their respective meetings held on 12th May, 2014. The Scheme is conditional upon, inter alia, various regulatory and other necessary approvals and sanctions from the lenders on re-organisation of consolidated long term financing arrangements and fulfillment of all pre-disbursement conditions for such arrangements.

In this regards, the Company has received, in terms of Clause 24(g) of the Listing Agreement, Observation Letters from National Stock Exchange of India Limited and BSE Limited, the Designated Stock Exchange dated 26th August, 2014 and 27th August, 2014 respectively conveying their "No objection" to the draft Scheme. Hon''ble CERC, vide its order dated 7th January, 2015, has granted its approval to TEL under Section 17(1)(b) of the Electricity Act, 2003 for the amalgamation with the Company subject to the restriction on Electricity Trading with third party; maintaining separate accounts for Transmission business; valuing at book value the assets and liabilities of TEL after merger and reporting of relevant information upon approval of merger by the High Court for assignment of License to TPL.

Hon''ble GERC, vide its order dated 1st April, 2015, has approved amalgamation of TEL with the Company under section 17(1)(b) of Electricity Act, 2003 subject to the High Court''s approval.

Pursuant to the Hon''ble Gujarat High Court''s order dated 24th February, 2015, separate meetings as under were held for considering and approving the draft Scheme:

- Equity Shareholders of the Company and TCL on 30th April, 2015

- Unsecured creditors of TEL and TCL on 30th April, 2015

- Secured creditors of TEL and TCL on 1st May, 2015

The results of the aforesaid meetings shall be declared by the Chairman within the prescribed time limit of 40 days of the meeting.

Simultaneously, the Company has also obtained approval of Public Shareholders by way of Postal Ballot and E-voting as required under SEBI circulars. The results of the same have been posted on the Company''s website.

The Company is in advanced stage of discussions with lenders for finalizing the proposal for re-organization of consolidated long term financing arrangements.

2. DIVIDEND

The Company, as a policy, endeavours to distribute approx. 30% of its annual profits after tax as dividend in one or more tranches.

Following the said policy, the Board of Directors has, on 12th May, 2015, recommended dividend of Rs.1.50 per equity share having face value of Rs.10/- (Previous Year - Rs.0.50 per equity share in aggregate) on 4724,48,308 equity shares for FY 2014-15, amounting to Rs.70.87 Crore (Previous Year - Rs.23.62 Crore). With Dividend Distribution Tax of Rs.14.43 Crore (Previous Year - Rs.4.02 Crore), the total outflow on account of dividend works out to 23.71% (Previous Year - 26.26%) of consolidated annual profits after tax and minority interest.

3. FINANCE

LONG TERM LOANS

Details of long term loans of the Company for the year under review are provided in Note 4 to the Financial Statements. DEPOSITS

During the year under review, the Company has neither accepted nor renewed any deposits.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The particulars of contracts or arrangements with related parties are given in the prescribed Form AOC-2, appended herewith as Annexure A and in the section on Related Party Transactions in the Report on Corporate Governance.

4. SUBSIDIARIES AND JOINT VENTURES

SUBSIDIARIES

The Company has four subsidiary companies viz. Torrent Energy Limited, Torrent Solargen Limited, Torrent Power Grid Limited and Torrent Pipavav Generation Limited.

Torrent Energy Limited

Torrent Energy Limited, a wholly owned subsidiary of the Company, besides commissioning the 1,200 MW gas based DGEN Power Project at Dahej SEZ, District Bharuch, Gujarat also distributed 144.84 MUs to Dahej SEZ units during FY 2014-15 (Previous Year - 85.07 MUs) as a distribution licensee.

Torrent Solargen Limited (formerly known as Torrent Power Bhiwandi Limited)

Torrent Solargen Limited has developed and commissioned the 51 MW Solar Power Project at Charanka Solar Park, District Patan, Gujarat.

Torrent Power Grid Limited

Torrent Power Grid Limited, in which the Company has 74% stake, has received final tariff order for Phase III of the system strengthening scheme associated with the evacuation of power from the SUGEN Plant.

Torrent Pipavav Generation Limited

Coal based Project being developed by Torrent Pipavav Generation Limited in phases at Pipavav village in Amreli District of Gujarat has been stalled since last one year due to non-co-operation from erstwhile land owners.

JOINT VENTURES

Tornascent Care Institute

During the year, Tornascent Care Institute, a Section 8 Company, under the Companies Act, 2013, was promoted and incorporated jointly with Torrent Pharmaceuticals Limited, for the purpose of carrying out charitable activities.

CONSOLIDATED FINANCIAL STATEMENTS

The Board reviewed the affairs of the Company''s subsidiaries during the year at regular intervals. In accordance with section 129(3) of the Companies Act, 2013, the Company has prepared Consolidated Financial Statements of the Company and all its subsidiaries, which form part of this Annual Report. Further a statement containing salient features of the Financial Statements of each subsidiary in Form AOC-1 forms part of the Consolidated Financial Statements. The statement also provides the details of performance and financial position of each subsidiary. Associates have not been considered for consolidation being insignificant to the Company. Tornascent Care Institute has also not been considered for the purpose of consolidation as no economic benefit is expected.

In accordance with section 136 of the Companies Act, 2013, the audited Financial Statements, including the Consolidated Financial Statements and related information of the Company and audited accounts of each of its subsidiaries, are available on our website. These Documents will also be available for inspection at our registered office during normal business hours (9.30 AM to 6.30 PM) on working days, except Saturday, up to and including the date of Annual General Meeting of the Company.

5. DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 134(3) of the Companies Act, 2013, in relation to the Financial Statements for FY 2014-15, the Board of Directors states that: ^

a) in preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company ( as on 31st March, 2015 and of the profits for the year ended 31st March, 2015;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

6. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to Financial Statements. During the year, such controls were tested and no reportable material weakness was observed.

7. AUDITORS STATUTORY AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, the Statutory Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re-appointment. They have furnished a certificate regarding their eligibility for re-appointment as Statutory Auditors of the Company, pursuant to Section 139(1) of the Companies Act, 2013 read with Rules. The Board of Directors recommends their re-appointment for one year.

The Auditors'' Report for FY 2014-15 forms part of this Annual Report and does not contain any qualification, reservation or adverse remark.

COST AUDITORS

Pursuant to Section 148(3) of the Companies Act, 2013, M/s. Kirit Mehta & Co., Cost Accountants, Mumbai have been appointed as the Cost Auditors of the Company for FY 2014-15 by the Board of Directors and their remuneration has been ratified by members at the 10th Annual General Meeting of the Company. The Cost Audit Report for FY 2013-14 was filed on 6th September, 2014 with the Central Government (within the prescribed time limit) pursuant to section 233B of the Companies Act, 1956.

SECRETARIAL AUDITORS

Pursuant to Section 204 of the Companies Act, 2013 read with Rules thereof, the Board of Directors has appointed M/s. M. C. Gupta & Co., Company Secretaries, Ahmedabad, as Secretarial Auditors of the Company for FY 2014-15. A Secretarial Audit Report for FY 2014-15 is annexed herewith as Annexure B.

There are no adverse observations in the Secretarial Audit Report which call for explanation.

The Board has appointed M/s. M. C. Gupta & Co., Company Secretaries, Ahmedabad, as Secretarial Auditors of the Company for FY 2015-16.

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL

APPOINTMENT AND RESIGNATION

Subsequent to the notification of Section 149 and other applicable provisions of the Companies Act, 2013, the members of the Company had at the 10th Annual General Meeting, held on 28th July, 2014, appointed the existing Independent Directors - Shri Pankaj Patel, Shri Samir Barua, Shri Kiran Karnik and Shri Keki Mistry for a term of five consecutive years ending 31st March, 2019. Further, Smt. Renu Challu was appointed as an Independent Director for a term of three consecutive years effective from 28th July, 2014. The members had, in the same meeting, also approved the appointment of Shri Jinal Mehta as Whole-time Director of the Company w.e.f 5th April, 2014 for a term of five consecutive years.

Shri D. J. Pandian, IAS resigned from the Board w.e.f. 30th August, 2014 upon his transfer from Energy & Petrochemicals Department, Government of Gujarat. The Board places on record its appreciation for the valuable services rendered by Shri D. J. Pandian, IAS during his tenure as Director of the Company.

Smt. Bhavna Doshi is proposed to be appointed as Independent Director of the Company to hold office for a term of three consecutive years effective from the conclusion of the ensuing Annual General Meeting. The Board recommends her appointment for the approval of the members at the ensuing Annual General Meeting.

The Board had, at its meeting held on 12th May, 2014, appointed the following persons as Whole-time Key Managerial Personnel:

- Shri Sudhir Mehta, Executive Chairman

- Shri T. P. Vijayasarathy, Chief Financial Officer

- Shri Srinivas Kotra, Company Secretary

Shri Srinivas Kotra, has resigned from the post of Company Secretary w.e.f. 27th February, 2015.

RE-APPOINTMENT OF DIRECTORS

The term of Shri Sudhir Mehta as Executive Chairman and of Shri Samir Mehta as Executive Vice-Chairman, comes to an end on the closing hours of 31st July, 2015. The Board, therefore, recommends their re-appointment as Chairman and Vice-Chairman, respectively, for the approval of the members at the ensuing Annual General Meeting.

DIRECTOR RETIRING BY ROTATION

As per the provisions of the Companies Act, 2013, Shri Markand Bhatt, Whole-time Director, retires by rotation and being eligible, has offered himself for re-appointment.

A brief resume and other relevant details of the Directors proposed to be appointed / re-appointed are given in the Explanatory Statement to the Notice convening the 11th Annual General Meeting.

DECLARATION BY INDEPENDENT DIRECTORS

Pursuant to Section 149(7) of the Companies Act, 2013, the Company has received necessary declaration from each Independent Director for FY 2014-15 confirming that they meet the criteria of independence as prescribed under the Act and Clause 49 of the Listing Agreement.

NUMBER OF MEETINGS OF THE BOARD

The Board meets at regular interval with gap between two meetings not exceeding 120 days. Additional meetings are held as and when necessary. During the year under review, the Board met five times.

POLICY ON DIRECTORS'' APPOINTMENT

The Nomination and Remuneration Committee (NRC) has approved the criteria and process for identification / appointment of Directors which are as under:

Criteria for appointment:

i. Proposed Director ("Person") shall meet all statutory requirements and should:

- possess the highest ethics, integrity and values

- not have direct / indirect conflict with present or potential business / operations of the Company

- have the balance and maturity of judgment

- be willing to devote sufficient time and energy

- have demonstrated high level of leadership and vision, and the ability to articulate a clear direction for an organisation

- have relevant experience (In exceptional circumstances, specialisation / expertise in unrelated areas may also be considered)

- have appropriate comprehension to understand or be able to acquire that understanding o relating to Corporate Functioning

o involved in scale, complexity of business and specific market and environment factors affecting the functioning of the Company

ii. The appointment shall be in compliance with the Board Diversity Policy of the Company.

Process for Identification / Appointment of Directors:

i. Board members may (formally or informally) suggest any potential person to the Chairman of the Company meeting the above criteria. If the Chairman deems fit, necessary recommendation shall be made by him to the NRC.

ii. Chairman of the Company can himself also refer any potential person meeting the above criteria to the NRC.

iii. NRC will process the matter and recommend such proposal to the Board.

iv. Board will consider such proposal on merit and decide suitably.

CRITERIA FOR PERFORMANCE EVALUATION

The Board considered and approved the criteria for performance evaluation of itself, that of its Committees and Individual Directors as follows:

Criteria for Board Evaluation

- Focus on strategic and policy issues

- Effectiveness of Board process and information sharing

- Nature of discussions

- Quality of decisions Criteria for Committee Evaluation

- Adequacy of terms of reference of the Committee

- Fulfilment of key responsibilities

- Frequency and effectiveness of meetings

- Quality / relevance and timeliness of information made available

- Committee dynamics, especially openness of discussions

Criteria for Evaluation of Independent Directors

- Participation in terms of adequacy (time & content)

- Contribution through expertise and perspective

- Guidance / support to Management outside Board / Committee meetings Criteria for Evaluation of Non-Independent Directors

- Participation in terms of adequacy

- Transparency

MANNER OF EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The Evaluation of Board, its Committees and Individual Directors was carried out as per process and criteria laid down by the Board of Directors based on the recommendation of the Nomination and Remuneration Committee.

The obtaining and consolidation of feedback from all Directors in this regards, was co-ordinated by the Chairman of Independent Directors'' meeting for Board and Non-Independent Directors while the process of evaluation of the Independent Directors was co-ordinated by the Chairman of the Company. Based on this, Chairman of the Company briefed the Board and each of the Individual Directors, as applicable.

With respect to the Committees, the Chairperson of each of the Board Committees evaluated the performance of their respective Committee and reported the same to the Board for discussion; from which the final result emerged.

FAMILIARISATION PROGRAMME

The Company undertook various steps to make the Independent Directors have full understanding about the Company. The details of such familiarisation programmes have been disclosed on the Company''s website at - http://www.torrentpower.com/investors/2015/familiarisation_programme.pdf

9. REMUNERATION

REMUNERATION POLICY

The Company has formulated the policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees of the Company which is as under:

Components of Remuneration

i. Fixed Pay comprising Basic Salary, HRA, Car Allowance (applicable to General Managers & above employees), Conveyance Allowances / Reimbursement, Company''s contribution to Provident Fund, Superannuation Fund, Gratuity, etc.

ii. Variable Pay, which is either in the form of:

- Commission to Managing Directors

- Commission to Whole-time Directors

- Performance Based Pay to General Managers & above (up to 20% of CTC), based on unit performance grades

- One-time reward for identified employees in exceptional cases who undertake tasks which go beyond their normal call of duty and play a crucial role in the success of an event.

iii. Retention Pay: In the case where stability is an issue, part of the CTC is kept as retention pay which is being paid after 3 years or more.

Such remuneration is determined at the time of recruitment based on various factors such as Educational Qualification, Experience, Competence, Current CTC, Internal Equity and / or External Market comparison, etc.

Annual Appraisal Process

i. Annual Appraisals are conducted, following which annual increments and promotions in deserving cases are decided once in a year based on:

- Employees self-assessment

- Assessment by Immediate Superior and

- Assessment by Head of Department

ii. Annual Increment leading to an increase in Fixed Pay consists of

- Economic Rise based on All India Consumer Price Index published by the Government of India or Internal Survey wherein inflation on commonly used items is calculated.

- Performance Rise based on industry and overall business scenario and factoring the following aspects: o Company''s performance vis-a-vis the industry

o Unit performance (Grades ranging from A to C-. Higher the grades, higher the rating) is carried out based on various financial and non-financial parameters and grades assigned are used for working out the overall ceiling for remuneration and performance based pay at Unit level. o Individual Performance / track record including care for health / balance between quality of work and family life.

- Promotion Rise

iii. Also Performance Based Pay i.e. Variable Pay (to General Manager & above employees) is based on annual appraisal process.

iv. The increments as decided for a particular financial year are paid during the subsequent financial year. For example the performance appraisal of an employee for FY 2013-14 is conducted in FY 2014-15 and his salary rise in FY 2014-15 reflects his performance for FY 2013-14.

Remuneration of Independent Directors:

The Company has formulated a policy for the remuneration of Independent Directors as follows:

i. Sitting Fees of Rs.1 lac for each meeting of the Board or any Committee thereof, attended by them;

ii. Commission on the basis of participation in the meetings of Board and Audit and Risk Management Committee subject to the condition that total commission paid to all Directors (other than Managing Director or Whole-time Director) including service tax thereon shall not exceed the limit of 1% of net profits in a financial year as laid down under the provisions of Section 197(1) of the Companies Act, 2013 read with Section 198 of the Act.

iii. Independent Directors will be reimbursed for all the expenses incurred for attending any meeting of the Board or Committees thereof, and which may arise from performance of any special assignments given by the Board.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures pertaining to remuneration and other details are provided in the Annexure C to this Report.

10. AUDIT AND RISK MANAGEMENT

During the year, the Board decided that the Audit Committee shall also carry out the role of Risk Management and hence renamed it as Audit and Risk Management Committee and also changed its terms of reference in this context.

COMPOSITION OF THE COMMITTEE

Name of the Director Category of Directorship

Shri Keki Mistry, Chairman Independent Director

Shri Samir Barua Independent Director

Shri Kiran Karnik Independent Director

Smt. Renu Challu(AA) Independent Director

Shri Jinal Mehta($$) Whole-time Director

(AA) Appointed as a member of the Audit and Risk Management Committee w.e.f. 28th July, 2014 ($$) Ceased to be a member of the Committee effective from 28th July, 2014.

During the year, the Board has accepted all the recommendations made by the Audit and Risk Management Committee. VIGIL MECHANISM

The Company has adopted a Whistle Blower Policy since 2011. The same was amended during the year pursuant to the requirements of the Companies Act, 2013 and the Listing Agreement. The revised Policy empowers all the Stakeholders to raise concerns by making Protected Disclosures as defined in the Policy. The Policy also provides for adequate safeguards against victimization of Whistle Blower who avail of such mechanism and also provides for direct access to the Chairman of the Audit Committee, in exceptional cases. The functioning of the Whistle Blower mechanism is reviewed by the Audit Committee on a quarterly basis. The details of the Whistle Blower Policy are explained in the Report on Corporate Governance and the Policy is available on the website of the Company at http://www.torrentpower.com/investors/pdfs/2015/whistle_blower_policy. pdf

RISK MANAGEMENT POLICY

The Board of Directors has developed and implemented Risk Management Policy for the Company. It has identified and assessed internal and external risks, with potential impact and likelihood, that may impact the Company in achieving its strategic objectives or may threaten its existence. The Policy lays down procedures for risk identification, assessment, monitoring, review and reporting. The Policy also lists the roles and responsibilities of Board, Risk Management Committee, Chief Risk Officer, Risk Champions and Co-ordinators.

11. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Concern for Society and Environment is a deeply rooted core value of the Company. As part of its CSR, the Company makes concentrated efforts in the fields of Community Healthcare, Sanitation & Hygiene, Education & Knowledge Enhancement and Social Care & Concern.

In line with the provisions of the Companies Act, 2013 and Rules made thereunder, a Corporate Social Responsibility Committee has been formed by the Board of Directors. The Composition of the CSR Committee is as under:

Name of Director Category of Directorship

Smt. Renu Challu, Chairperson(AA) Independent Director

Shri Samir Mehta($$) Executive Vice-Chairman

Shri Samir Barua Independent Director

Shri Jinal Mehta Whole-time Director

(AA) Appointed as a member of the Committee w.e.f 28th July, 2014.

($$) Ceased to be a member of the Committee effective from 28th July, 2014.

The CSR Policy formulated by the CSR Committee may be accessed at the below web-link: http://www.torrentpower.com/investors/pdfs/2014/csr_policy.pdf

During FY 2014-15, the following CSR initiatives were undertaken at the Group level:

- The Group, having decided to establish a landmark healthcare institute in the area of paediatric care, has formed Tornascent Care Institute (a company formed under Section 8 of the Companies Act, 2013) and contributed alongwith Torrent Pharmaceuticals Limited Rs.12.00 Crore towards its initial corpus.

- Based on the survey conducted during previous year, the Group initiated a Health Care, Sanitation and Hygiene related programme in urban slum areas of Sabarmati ward near AMGEN.

- Shiksha Setu - teaching and learning enhancement programme, in its fourth year, included more than 6,500 students and 230 teachers as direct beneficiaries. Emphasis on capacity building and sustainability resulted into teachers taking lead as advanced trainers.

- The construction of new High School building with state of the art facility for higher studies at Chhapi village in Gujarat is nearing completion. The students from nearby villages will also be benefitted.

The Annual Report on CSR Activities is given as Annexure D to this Report which indicates that the Company has spent Rs.16.30 Crore (more than 2% of the average net profits of last three financial years) in this regard.

Additionally, the following also form part of the CSR initiatives undertaken by the Company during FY 2014-15:

- SWADHAR - the Medical and Health Care Centre at SUGEN continued to cater to the healthcare needs of locals. It also provided medicinal support and supplementary food to children through a School Health Care programme. Various health awareness sessions and camps were also conducted by SWADHAR for nearby residents and contract workers of SUGEN.

- Paved shoulder along with the internal roads were constructed at Akhakhol village near SUGEN to prevent water spreading on the roads.

- The Company had also made donations to various organizations involved in education, healthcare, providing relief to disaster victims and promotion of social welfare, harmony and nationalism.

12. ENVIRONMENT, HEALTH AND SAFETY

The Company accords the highest priority to Environment, Health and Safety. The developments during FY 2014-15 in this context include completion of Lost Time Accident free 1.98 million working hours (812 calendar days) as on 31st March, 2015 at SUGEN.

13. HUMAN RESOURCES

Our underlying belief is that Human Resource Development today is about nurturing human resources and leveraging human capital towards the achievement of business goals. The Company is committed towards creation of opportunities for its employees that help attract, retain and develop a diverse workforce.

During the year, our focus was on strengthening the conducive work culture for our employees. To re-inforce our core values and the belief in the concept of "Family First, various policies for employees'' empowerment were re-defined so as to enrich their professional, personal & social life. As part of our gender diversity initiatives, we continue to encourage employment of women as well as create a positive and safe working environment for them.

Enhancing awareness and reinforcement of the "Whistle Blower Policy" were focus areas to reiterate to employees, that the organization encourages reporting of unethical / wrong practices and is committed to creating a constructive and open work environment.

During the year under review, one case was filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the disposition of which is under process.

On the industrial front, the Company continued to foster cordial industrial relations with its workforce during the year.

The Company has a diverse workforce of 6,835 employees as on 31st March, 2015 vis-a-vis 6,800 employees as on 31st March, 2014.

14. CUSTOMER INITIATIVES

Aligned to the exponential growth in internet penetration, the Company has recently launched a user-friendly Customer Self Service Portal "connect.torrentpower.com" where customers can directly transact with the Company through an online portal. This portal virtually eliminates the need for the customers to visit a service centre or a payment outlet for any service need. The Company has also implemented the Interactive Voice Response (IVR) system, eBill for power consumption, SMS alert system and introduction of Self Service Kiosks for improved customer satisfaction. With a view to further enhance customer experience, all zonal service centres are being upgraded to offer best in class service with well trained staff, climate controlled environment & comfortable infrastructure.

15. CORPORATE GOVERNANCE

The Corporate Governance philosophy of the Company rests on five basic principles viz. protection of rights & interests of members, equality in treatment of all members, disclosure of timely & accurate information, strategic guidance & effective monitoring by the Board and accountability of the Board to the Company & its members. As stipulated by Clause 49 of the Listing Agreement, Report on Corporate Governance forms part of this Annual Report. Certificate of the Auditors regarding compliance with the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement is also annexed to the Board''s Report.

16. MANAGEMENT DISCUSSION AND ANALYSIS

As stipulated by Clause 49 of the Listing Agreement, the Management Discussion and Analysis Report forms part of this Annual Report.

17 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The details relating to conservation of energy, technology absorption, foreign exchange earnings and outgo prescribed under section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are given in the Annexure E and form part of this Report.

18. THE EXTRACT OF THE ANNUAL RETURN

The extract of the Annual Return in Form MGT-9 is appended herewith as Annexure F to this Report.

19. APPRECIATION AND ACKNOWLEDGEMENTS

The Board of Directors is pleased to place on record its appreciation for the continued guidance and support received from the Government of India, the State Governments, the Central and State Electricity Regulatory Commissions / Authorities, the National, Regional and State Load Dispatch Centres, Regional Power Committees, Chief Electrical Inspectors of Gujarat, Uttar Pradesh and Maharashtra, State Energy Developers, State Discoms, National and State Transmission Companies, the Corporation and Municipal Authorities of the areas of Company''s operation, Contractors, Fuel Suppliers and Transporters, Power Exchanges, Banks, Financial Institutions and Security Trustees. The Board is thankful to the Members, Auditors, Consultants, Vendors, Service Providers, Insurers and all its Employees for their unstinted support and contribution. The Board also recognizes the contribution of the esteemed Consumers to the growth of the Company and takes this opportunity to pledge the Company''s commitment to serve them better.

For and on behalf of the Board of Directors

Ahmedabad Sudhir Mehta 12th May, 2015 Executive Chairman

Mar 31, 2014

Dear Shareholders,

The Directors'' present the 10th Annual Report of the Company together with the Audited Accounts for the Financial Year (FY) ended 31st March, 2014.

1. HIGHLIGHtS

The key highlights for the FY 2013-14 are:

- Financial performance of the Company:

- Increase in Revenue by 6.62% to Rs.8,817.46 Crore

- Increase in PBDIT by 1.32% to Rs.1,458.14 Crore

- Decrease in PAT by 75.36% to Rs.94.84 Crore

- Hon''ble Central Electricity Regulatory Commission (CERC) has issued fnal tariff order for SUGEN 40 (an expansion of SUGEN Mega Power Plant) on 6th December, 2013. Pending adoption of this tariff by Hon''ble Gujarat Electricity Regulatory Commission (GERC), the recovery of this cost by the regulated distribution business is in abeyance.

- The 110 MW coal based E station, part of AMGEN, has been successfully uprated to 121 MW and synchronised with the grid on 21st October, 2013.

- The continued non-availability of domestic gas including from KG-D6 basin has adversely impacted the operations at SUGEN and has resulted into non-operation of SUGEN 40 and Vatva plant of AMGEN.

- Reduced supply of power from Company''s gas based plants to its regulated distribution business at Ahmedabad and Surat, due to decline in domestic gas availability and its unwillingness to off-take power based on expensive LNG, necessitated purchase of short term power. The resultant additional cost could not be recovered fully for a good part of the year, despite a correction in the Fuel and Power Purchase Price Adjustment (FPPPA) mechanism providing for pass through of mix variance.

- Hon''ble GERC vide its orders dated 29th April, 2014 on the petitions of the Company for Mid-term Review of Business Plan for FY 2014-15 and FY 2015-16 along with petitions for True up of FY 2012-13 and Tariff Determination for FY 2014-15 allowed increase in tariff for Ahmedabad Distribution and Surat Distribution by average 44 paise per kWh (7.5%), which after reduction of positive difference between incremental base power purchase rate and base FPPPA is ~29 paise per kWh. This increase is effective from 1st May, 2014 and is not applicable to BPL consumers, Agricultural consumers & Residential consumers using electricity up to 50 units per month.

- Hon''ble Appellate Tribunal for Electricity (APTEL) has allowed carrying cost on regulatory gap for the regulated distribution business of the Company considering it as a legitimate claim and has also confirmed the ruling of Hon''ble GERC in favour of the Company to revise RPO for FY 2010-11 at the actual level of compliance.

- Transmission & Distribution (T&D) loss in Ahmedabad and Surat distribution circles has marginally increased to 6.54% in FY 2013-14 against 6.52% in FY 2012-13; one of the lowest in the country. Aggregate Technical & Commercial (AT&C) loss at Agra reduced to 43.47% in FY 2013-14 from 51.26% in FY 2012-13. AT&C loss at Bhiwandi has increased to 22.68% in FY 2013-14 as against 21.68% in FY 2012-13 pursuant to continuation of agitation by the powerloom consumers against the tariff hike.

- Open access has adversely impacted the sales growth of Company''s Ahmedabad license area to the tune of 323 MUs in FY 2013-14.

- DGEN and SUGEN 40 have been successfully registered with United Nations Framework Convention on Climate Change (UNFCCC) under the Clean Development Mechanism (CDM).

- SUGEN 40 has been integrated with the Integrated Management System (IMS) certification of SUGEN covering ISO 9001:2008, ISO 50001:2011, ISO 14001:2004 and BS OHSAS 18001:2007.

- AMGEN was certified for ISO 50001:2011 (Energy Management System) and the same was integrated with IMS.

2. FINANCIAL RESULTS

Summary of the financial results for the year under review is as under:

(Rs. in Crore)

For the year For the year Particulars ended on ended on 31st March, 2014 31st March, 2013

Total Income 8,817.46 8,269.97

Profit before Depreciation, Interest and Tax 1,458.14 1,439.15

Depreciation 534.52 407.93

Interest 677.18 408.48

Profit before Tax 246.44 622.74

Current Tax 33.50 126.15

Deferred Tax 124.62 111.17

(Excess) / Shortfall in provision for Taxation for earlier years (6.52> 0.46

Profit After Tax 94.84 384.96

Add: Balance brought forward 1,462.41 1,241.68

Balance available for appropriation 1,557.25 1,626.64

Appropriations

Transfer to Contingency Reserve 1.00 1.00

Transfer to Debenture Redemption Reserve 23.81 23.81

Transfer to General Reserve - 28.87

Dividend

Proposed Dividend 23.62 94.49

Dividend Distribution Tax on Proposed Dividend 4.02 16.06

Balance carried to Balance Sheet 1,504.80 1,462.41

3. DIVIDEND

The Company, as a policy, endeavours to distribute approx. 30% of its annual Profits after tax as dividend in one or more tranches.

In line with the said policy, the Board of Directors has, on 12th May, 2014, recommended dividend of 5% i.e. Rs.0.50 per equity share (Previous Year Rs.2.00 per equity share) on 47,24,48,308 equity shares of Rs.10/- each for FY 2013-14, amounting to Rs.23.62 Crore (Previous Year Rs.94.49 Crore).

With Dividend Distribution Tax (DDT) of Rs.4.02 Crore (Previous Year Rs.16.06 Crore), the total outflow on account of dividend works out to Rs.27.64 Crore (Previous Year Rs.110.55 Crore). The distributed Profits including DDT are 29% (Previous Year 29%) of annual Profits after tax. The aforesaid dividend would be tax free in the hands of the shareholders.

4. FINANCE

During the year under review, the Company raised long term loans from various Financial Institutions and Banks to the tune of Rs.1,698.74 Crore (including Rs.198.74 Crore for SUGEN 40). Outstanding amount towards long term loans, NCDs and APDRP loans as on 31st March, 2014 was Rs.6,148.96 Crore (Previous Year Rs.4,919.46 Crore). An amount of Rs.469.24 Crore (Previous Year Rs.520.68 Crore) was repaid by the Company during the year. The Company''s long term loans, cash credit and NCDs are rated at AA/Negative by CRISIL, indicating high degree of safety with regard to timely servicing of financial obligations. Letters of credit / bank guarantees of the Company is rated A1 indicating very strong degree of safety regarding timely servicing of the financial obligations.

5. UPCOMING PROJECTS

The status on DGEN Mega Power Project is as follows:- The 1,200 MW Combined Cycle gas based DGEN Mega Power Project at Dahej SEZ, District Bharuch, Gujarat, is being developed by Torrent Energy Limited (TEL), a wholly owned subsidiary of the Company. TEL has been granted status of Co-Developer of Dahej SEZ area by the Ministry of Commerce & Industry and the DGEN Project has been granted Provisional Mega Power Status by the Ministry of Power. The Project has been successfully registered with UNFCCC under CDM on 9th July, 2013 w.e.f. 29th December, 2012.

The Project is expected to be completed in the second quarter of fY 2014-15. the original project cost along with additional works undertaken viz. transmission system, dedicated gas pipeline, gas receiving station, augmenting water supply system, dedicated effuent disposal line and reactor bay in the switchyard amounts to Rs.5,724 crore. However, the project cost is expected to be Rs.6,503 crore on completion, additionally due to factors beyond the control of the company including increase in forex rates, commissioning fuel, IDc etc. project completion has been delayed and as per Epc contract clause on damages, the company has received Rs.506 crore towards Liquidated Damages for delay, from Siemens India and Siemens aG. this has enabled the company to reduce the project cost to Rs.5,997 crore.

6. SUBSIDIARIES

The Company has three subsidiary companies viz. Torrent Power Grid Limited, Torrent Energy Limited and Torrent Pipavav Generation Limited.

Torrent Power Grid Limited is yet to receive tariff order for Phase III of the power evacuation facilities for SUGEN.

Torrent Energy Limited besides developing the 1,200 MW gas based DGEN Mega Power Project at Dahej SEZ, District Bharuch, Gujarat also distributed 85.07 MUs to Dahej SEZ units during FY 2013-14 (Previous Year 66.48 MUs) as a distribution licencee.

Coal based Project being developed by Torrent Pipavav Generation Limited in phases at Pipavav village in Amreli District of Gujarat is currently stalled due to non co-operation from erstwhile land owners.

7. COMPOSITE SCHEME OF AMALGAMATION

The Board in its meeting on 29th October, 2013 had accorded its approval to carry out a Study and thereby evolve a suitable and optimum business model along with desirable capital structure for the power sector operations of the Torrent Group covering, inter alia, the possibility of appropriate re-organisation including merger, demerger, forward / backward integration, sale of any division, etc.

Based on the outcome of the Study, the amalgamation of Torrent Energy Limited and Torrent Cables Limited with the Company along with appropriate re-organisation of consolidated long-term fnancing arrangements was found to be a suitable and optimum business model for the power sector operations of the Torrent Group.

Torrent Energy Limited, wholly owned subsidiary of Torrent Power Limited is engaged in the similar business as that of Torrent Power Limited and Torrent Cables Limited is one of the major suppliers of power cables for the power transmission and distribution activities of Torrent Power Limited as well as Torrent Energy Limited. Besides, these companies being part of the Torrent Group, in view of similar business of Torrent Energy Limited and Torrent Power Limited and complementary business relationship between Torrent Cables Limited on one hand and Torrent Energy Limited & Torrent Power Limited on the other hand, it is proposed to consolidate the activities of the Torrent Cables Limited, Torrent Energy Limited and Torrent Power Limited by way of amalgamation. The proposed amalgamation is expected to benefit all the three companies and their stakeholders in terms of synergies of operations, higher integration, concentrated management focus, increased shareholders'' value and enhanced reputation of Torrent Group.

In this regard, a composite scheme of amalgamation of Torrent Energy Limited and Torrent Cables Limited with Torrent Power Limited (Scheme) under the provisions of Sections 391-394 of the Companies Act, 1956 including the share exchange ratio was recommended by the Audit Committee and approved by the Board of Directors at their respective meetings held on 12th May, 2014. The Appointed Date of the Scheme is 1st April, 2014. The Share exchange ratio determined by the valuer, M/s. Price Waterhouse & Co. LLP, Chartered Accountants and the fairness opinion provided by M/s IDFC Securities Limited, Merchant Bankers, on the same, is as under:

- Every shareholder holding 20 (Twenty) fully paid up equity shares of Rs.10/- each of Torrent Cables Limited, shall be entitled to receive 19 (Nineteen) fully paid up equity shares of Rs.10/- each of Torrent Power Limited.

- Since Torrent Energy Limited is a wholly owned subsidiary of Torrent Power Limited, the investment of the Company in Torrent Energy Limited shall stand cancelled.

The Scheme is conditional upon, inter alia, various regulatory and other necessary approvals and sanctions from the lenders on re-organisation of consolidated long term fnancing arrangements on such terms and conditions as may be acceptable to the Board.

8. HUMAN RESOURCES

Committed and motivated employees are one of the most important assets for the Company. The Company is committed towards excellence in action through development and administration of opportunities for its employees that helps attract, retain and develop a diverse workforce.

Performance management area is also given prime attention. Contribution of each individual employee in the organization''s growth is evaluated and their efforts are rewarded. The Company is committed towards creating a healthy, conducive and safe working environment. During the year, there were significant areas of achievement around processes and policy development. Continuous efforts were taken to implement Gender Diversity initiatives, undertaken by the Company, in various areas to ensure enhanced representation of women employees. On the industrial front, the Company continued to strengthen cordial industrial relations during the year.

The Company has taken special initiatives to communicate more with its employees and to foster unity on occasions like Independence Day, Republic Day and Founders'' Day.

The Company has a diverse workforce of 6,800 as on 31st March, 2014 vis-Ã -vis 7,077 as on 31st March, 2013.

9. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Concern for Society and Environment is a deeply rooted core value of the Company. As a part of its CSR, the Company makes concentrated efforts in the felds of Community Healthcare, Sanitation & Hygiene, Education & Knowledge Enhancement and Social Care & Concern. During the year, the Company was involved in following CSR activities taken up on its own or along with other Torrent Group Companies:

On its own

- The Company continued to cater to the needs of locals (as of date 9,500 patients) from surrounding 26 tribal villages around SUGEN through SWADHAR, the Medical Centre. SWADHAR is equipped to provide treatment for general ailments and in specialities such as obstetrics, gynaecology and paediatrics. Various awareness sessions on oral hygiene, adolescent health, anti-natal health and communicable diseases as well as health camps were conducted for residents of nearby villages and contract workers of SUGEN.

- Various initiatives like cleanliness drives, distribution of dustbins etc. have been undertaken at villages surrounding SUGEN to create general awareness and a hygienic environment.

- Constructed 4 classrooms and 2 toilet blocks as part of expansion work at Akhakhol School near SUGEN.

At Group level

- Shiksha Setu Â Teaching Learning Enhancement Programme in its third year included more than 4,800 students and more than 200 teachers as benefciaries. Outcomes included increase in participation of parents in parents- teachers meetings especially in rural areas, 55% cumulative learning level improvement over baseline year, enhanced learning interest in ICT based adaptive tool and improvement in attendance. 523 employee volunteers participated in the project activities during the year.

- Construction work is in progress for new building for high school comprising 24 class rooms, science & computer lab, library, administrative block, assembly & dining hall, kitchen area, sports complex, etc. for accommodating 1,500 students of class 9 - 12 at Chhapi village in Gujarat.

- Reconstruction activities at Memadpur school were completed during the year which included renovation of existing school building and construction of new facilities including assembly hall and utility facility.

- A survey of 1,769 households was conducted by 154 employee volunteers to understand women health issues and child health aspects, in order to conceptualize and design a community healthcare programme in the vicinity of Sabarmati area in Ahmedabad.

Besides the above, the Company has also made donations to the tune of Rs.1.77 Crore (Previous Year Â Rs.2.62 Crore) to various organizations involved in education, healthcare, providing relief to disaster victims and promotion of social welfare, harmony and nationalism.

In line with the provisions of the Companies Act, 2013 and rules made thereunder, a CSR Committee has been formed by the Board of Directors. The Board of Directors at their meeting held on 12th May, 2014 approved the CSR Policy as recommended by the CSR Committee which includes, inter alia, the CSR activities falling under the purview of Schedule VII of the Companies Act, 2013.

10. ENVIRONMENT, HEALTH AND SAFETY

The Company accords the highest priority to Environment, Health and Safety. The developments during the FY 2013- 14 in this context include:

SUGEN 40 integrated with IMS certification of SUGEN covering ISO 9001:2008, ISO 50001:2011, ISO 14001:2004 and BS OHSAS 18001:2007.

Renovation and Modernisation (R&M) work completed at E and F stations at AMGEN. The increased efficiency on account of such R&M work will result into reduction of greenhouse gases. Electro Static Precipitators (ESPs) were modifed at E station of AMGEN to reduce the emission of suspended particulate matter.

AMGEN is certified for Energy Management System ISO 50001:2011 (EnMS) from August 2013.

Adoption of safety improvement measures including undergrounding of overhead lines at Bhiwandi & Agra, replacement of old oil type switchgears with SF6 switchgears, replacement of old relays with protective relays and provision of DTC fencing and earthing.

11. DIRECTORS

Shri T P Vijayasarathy and Shri Murli Ranganathan, Whole-time Directors have resigned from the Board with effect from 25th January, 2014 and 31st March, 2014 respectively.

Shri V K Kukreja, Nominee Director of LIC of India resigned from the Board w.e.f. 22nd August, 2013.

The Board places on record its appreciation for the valuable services rendered by Shri Murli Ranganathan, Shri T P Vijayasarathy and Shri V K Kukreja during their tenure as Directors of the Company.

LIC of India has nominated Shri R Ravichandran as its nominee in place of Shri V K Kukreja and the Company has appointed him as an Additional Director on the Board w.e.f 29th October, 2013 till the commencement of ensuing Annual General Meeting (AGM). It is proposed to appoint him as a Nominee Director, liable to retire by rotation, with effect from the ensuing AGM i.e. 28th July, 2014.

Subsequent to the notifcation of Section 149 and other applicable provisions of the Companies Act, 2013, Shri Pankaj Patel, Shri Samir Barua, Shri Kiran Karnik and Shri Keki Mistry are proposed to be appointed as Independent Directors for a term of five consecutive years starting from 1st April, 2014 and ending on 31st March, 2019. Smt. Renu Challu is also proposed to be appointed as Independent Director for a period of three consecutive years w.e.f. ensuing AGM on 28th July, 2014.

Shri Jinal Mehta has been appointed as Whole-time Director for a period of 5 consecutive years effective from 5th April, 2014.

Shri Samir Mehta, Executive Vice Chairman, retires by rotation and being eligible, has offered himself for re-appointment.

For your perusal, a brief resume of the Directors being appointed / re-appointed and other relevant details are given in the Explanatory Statement to the Notice convening the AGM. The Board of Directors recommends their appointment / re-appointment for the approval of the shareholders at the ensuing AGM.

12. CORPORATE GOVERNANCE

The Corporate Governance philosophy of the Company rests on five basic principles viz. protection of rights and interests of shareholders, equality in treatment of all shareholders, disclosure of timely and accurate information, strategic guidance and effective monitoring by the Board and accountability of the Board to the Company and its shareholders.

As stipulated by Clause 49 of the Listing Agreement, the Management Discussion & Analysis Report and Report on Corporate Governance form part of this Annual Report. Certificate of the Auditors regarding compliance with the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement is also annexed to the Directors'' Report.

13. AUDITORS AND AUDITORS'' REPORT

M/s. Deloitte Haskins & Sells, Chartered Accountants, the Statutory Auditors of the Company retire at the ensuing AGM and are eligible for re-appointment. They have furnished a Certificate regarding their eligibility for re-appointment as Statutory Auditors of the Company, pursuant to Section 139 (1) of the Companies Act, 2013 read with rules. The Board of Directors recommends their re-appointment for one year.

Observations made in the Auditors'' Report are self-explanatory and therefore, do not call for any further explanation.

14. COST AUDITORS

M/s. Kirit Mehta and Co., Cost Accountants, Mumbai have been appointed as the Cost Auditors of the Company for FY 2013-14. Cost audit report for FY 2012-13 was fled on 30th September, 2013 with the Central Government (within the prescribed time limit) pursuant to Section 233B of the Companies Act, 1956.

15. DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, in relation to the financial statements for FY 2013-14, the Board of Directors states that:

i. In preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2014 and of the Profits for the year ended 31st March, 2014;

iii. The Directors have taken proper and suffcient care for 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; and

iv. The financial statements have been prepared on a going concern basis.

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The details relating to technology absorption and foreign exchange earnings & outgo prescribed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 (Rules) are given in the Annexure to and form part of this Report. As the Company is not a scheduled industry, details in respect of conservation of energy pursuant to the said Rules are not furnished.

17. PARTICULARS OF EMPLOYEES

The information required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this Report. However, as per the provisions of Section 219(1) (b)(iv) of the Companies Act, 1956, the report is being sent to all the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining the particulars may obtain it by writing to the Company Secretary of the Company.

18. APPRECIATION AND ACKNOWLEDGEMENTS

The Board of Directors is pleased to place on record their appreciation for the continued guidance and support received from the Government of India, the State Governments, the Central and State Electricity Regulatory Commissions / Authorities, the National, Regional and State Load Dispatch Centres, Regional Power Committees, Chief Electrical Inspectors of Gujarat, Uttar Pradesh and Maharashtra, State Energy Developers, State Discoms, National and State Transmission Companies, the Corporation and Municipal authorities of the areas of Company''s operation, EPC Contractors, Fuel Suppliers and Transporters, Power Exchanges, Banks, Financial Institutions and Security Trustees. The Board is thankful to the Shareholders, Auditors, Consultants, Vendors, Service Providers, Insurers and all its Employees for their unstinted support and contribution. The Board also recognizes the contribution of the esteemed Consumers to the growth of the Company and takes this opportunity to pledge the Company''s commitment to serve them better.

For and on behalf of the Board of Directors

Ahmedabad Sudhir Mehta

12th May, 2014 Executive Chairman

Mar 31, 2013

Dear Shareholders,

The Directors have pleasure in presenting the 9th Annual Report of the Company together with the Audited Accounts for the financial year ended 31st March, 2013.

1. HIGHLIGHTS

The key highlights for the Financial Year 2012-13 are:

- Financial performance of the Company:

- Increase in Revenue by 3.12% to Rs. 8,269.97 Crore

- Decrease in PBDIT by 38.94% to Rs. 1,439.15 Crore

- Decrease in PAT by 68.89% to Rs. 384.96 Crore

- The erstwhile Ahmedabad Electricity Company Limited (AEC), the merged constituent of the Company, currently comprising AMGEN Power Plant and Ahmedabad Distribution, has completed 100 years of successful operations.

- The 382.5 MW Combined Cycle gas based power plant, an expansion of SUGEN Mega Power Plant (UNOSUGEN) has been put into commercial operation on 4th April, 2013. Usage of expensive LNG for commissioning gas requirements and limited realization of infirm power therefrom at CERC rates put pressure on costs.

- Operations at SUGEN were adversely impacted due to domestic gas deficit mainly on account of reduced output of gas from RILs KG-D6 basin.

- Reduced supply of power from SUGEN and AMGEN to the Company''s regulated distribution business at Ahmedabad and Surat, due to decline in domestic gas availability and its unwillingness to off-take such power based on expensive LNG, necessitated purchase of short term power; the cost of which could only be partially recovered.

- 2.71 Mn CERs were issued to SUGEN during the year. Gross CER income of Rs. 44.99 Crore has been earned by SUGEN by selling 0.77 Mn CERs during the year. CER prices have fallen from ~ Â 3.77 per CER in March 2012 to ~ Â 0.32 per CER in March 2013.

- The 110 MW coal based F station, part of AMGEN, has been successfully uprated to 121 MW and synchronised with the grid on 30th April, 2013.

- Hon''ble Gujarat Electricity Regulatory Commission (GERC) has issued two tariff orders for Ahmedabad Distribution and Surat Distribution as follows:

i. Order dated 2nd June, 2012 for FY 2012-13 allowing tariff hike of 10 paise per kWh i.e. ~ 2% for all consumers, except BPL & Agricultural consumers, effective from 1st June, 2012; and

ii. Order dated 16th April, 2013 for FY 2013-14 allowing average tariff hike of 29.5 paise per kWh i.e. ~ 6% for all consumers, except BPL consumers, effective from 1st April, 2013.

- T&D loss in Ahmedabad and Surat distribution circles reduced to 6.52% in FY 2012-13 as against 6.84% in FY 2011-12; one of the lowest in the country. AT&C loss at Agra reduced to 51.26% in FY 2012-13 from 54.33% in FY 2011-12. AT&C loss at Bhiwandi has increased to 21.68% in FY 2012-13 as against 17.85% in FY 2011-12 due to decline in the collection efficiency pursuant to agitation by the power loom consumers against the tariff hike.

- SUGEN has been awarded the prestigious "2012 Sword of Honour" by the British Safety Council, U.K. in recognition of its exemplary performance in health and safety management.

- IMS Re-Certification has been granted to SUGEN covering ISO 9001:2008 (Quality Management System), ISO 50001:2011 (Energy Management System), ISO 14001:2004 (Environment Management System) and BS OHSAS 18001:2007 (Occupational Health and Safety Management System) for a period of three years.

- IMS Certification has been granted to AMGEN and to the Corporate office of the Company, covering ISO 9001:2008, ISO 14001:2004 and BS OHSAS 18001:2007.

2. FINANCIAL RESULTS

Summary of the financial results for the year under review is as under:

(Rs. in Crore)

Particulars For the year ended For the year ended on 31st March, 2013 on 31st March, 2012

Total Income 8,269.97 8,019.66

Profit before Depreciation, Interest and Tax 1,439.15 2,357.10

Depreciation 407.93 365.88

Interest 408.48 311.97

Profit before Tax 622.74 1,679.25

Current Tax 126.15 338.94

Deferred Tax 111.17 105.26

(Excess) / Shortfall in provision for Taxation for earlier years 0.46 (2.41)

Profit After Tax 384.96 1,237.46

Add: Balance brought forward 1,241.68 862.12

Balance available for appropriation 1,626.64 2,099.58

Appropriations

Transfer to Contingency Reserve 1.00 1.00

Transfer to Debenture Redemption Reserve 23.81 -

Transfer to General Reserve 28.87 500.00

Dividends

Interim Dividend - 141.73

Dividend Distribution Tax on Interim Dividend - 22.99

Proposed Dividend 94.49 165.35

Dividend Distribution Tax on Proposed Dividend 16.06 26.83

Total Dividend 94.49 307.08

Total Dividend Distribution Tax 16.06 49.82

Balance carried to Balance Sheet 1,462.41 1,241.68

3. DIVIDEND

The Company, as a policy, endeavours to distribute 30% of its annual profits after tax as dividend in one or more tranches.

In line with the said policy, the Board of Directors has, on 29th May, 2013, recommended dividend of 20% i.e. Rs. 2.00 per equity share (Previous Year Rs. 6.50 per equity share in aggregate) on 47,24,48,308 equity shares of Rs. 10/- each for FY 2012-13, amounting to Rs. 94.49 Crore (Previous Year Rs. 307.08 Crore).

With Dividend Distribution Tax (DDT) of Rs. 16.06 Crore (Previous Year Rs. 49.82 Crore), the total outflow on account of dividend works out to Rs. 110.55 Crore (Previous Year Rs. 356.90 Crore). The distributed profits including DDT are 29% (Previous Year 29%) of annual profits after tax. The aforesaid dividend would be tax free in the hands of the shareholders.

4. FINANCE

During the year, the Company raised long term loans from various Financial Institutions and Banks to the tune of Rs. 1,079.60 Crore (including Rs. 420.60 Crore for UNOSUGEN Project) and issued Non-Convertible Debentures (NCDs) of Rs. 850.00 Crore. The Company liquidated buyers'' credit of $ 41.30 Million during the year. Outstanding amount towards long term loans, NCDs and APDRP loans as on 31st March, 2013 were Rs. 4,919.46 Crore (Previous year Rs. 3,703.95 Crore). A total of Rs. 520.68 Crore (Previous year Rs. 444.17 Crore) were repaid by the Company during the year (excluding liquidation of buyers'' credit and refinancing of loan). The Company''s long term loans, cash credit and NCDs are rated at AA/Stable by CRISIL, indicating high degree of safety with regard to timely payment of financial obligations. Letters of credit / bank guarantees of the Company is rated A1 indicating high degree of safety regarding timely discharge of the obligations.

5. UPCOMING PROJECTS

The status on various upcoming projects of the Company and its subsidiaries is as follows:

DGEN MEGA POWER PROJECT

The 1,200 MW Combined Cycle gas based DGEN Mega Power Project at Dahej SEZ, District Bharuch, Gujarat, is being developed by Torrent Energy Limited (TEL), a wholly owned subsidiary of the Company. TEL has been granted status of Co-Developer of Dahej SEZ area by the Ministry of Commerce & Industry and the Project has been granted Provisional Mega Power Status by the Ministry of Power. All major equipments including Gas Turbines, Steam Turbines, Generators, Generator Transformers and Unit Auxiliary Transformers have been received at Site and are under different stages of erection. All three HRSGs and construction of 3 Natural Draft Cooling Towers are at advanced stage of construction. The Construction of 220kV Switchyard and its Control Room has been completed.

The erection work for Petronet LNG Limited-DGEN dedicated gas pipeline has been completed. For connectivity with other sources of gas, TEL has signed Interconnection Facility Agreement with Gujarat State Petronet Limited (GSPL) and work for such connectivity with GSPL grid network is under advanced stage of execution.

The connectivity scheme through 400 kV Double Circuit line from DGEN to Power Grid Corporation of India Limited''s Navsari sub-station, being developed by TEL in lieu of Central Transmission Utility (CTU), is under advanced stage of implementation. The 400 kV DGEN-Vadodara line which is part of the Western Region System Strengthening Scheme is being implemented by CTU through a competitive bidding route for which the RfQ process is under way.

The Project has been submitted to United Nations Framework Convention on Climate Change (UNFCCC) for registration under Clean Development Mechanism (CDM).

The DGEN Project has been delayed and based on current status, the Project is expected to be completed by the last quarter of FY 2013-14. There would be a revision in project cost on account of several additional works / items (including gas pipeline, connectivity for power evacuation, higher than expected contribution towards GIDC''s water scheme, etc.) and also due to factors beyond the control of the Company (such as forex variation, regulatory, statutory compliances in respect of commissioning gas, etc.).

75 MW WIND POWER PROJECT AT BHUD

The Company had entered into an agreement with ReGen Powertech Pvt. Ltd. for developing, constructing and maintaining the 75 MW Wind Power Project at Bhud, District Sangli, Maharashtra. The project has been delayed as it is yet to receive the necessary forest clearances. It is expected to be commissioned by February 2014.

PIPAVAV PROJECT

The Company is planning the 2,520 MW coal based Super Critical power project at Pipavav, District Amreli, Gujarat through its subsidiary, Torrent Pipavav Generation Limited. Baitarani West Coal block, allocated to Gujarat Power Corporation Limited for this Project and others, was de-allocated in December 2012. The Company has taken up the matter with Government of Gujarat for representing the case to the Government of India. Despite payment of additional compensation to more than 90% of land owners, erstwhile land owners opposed the work on the site and the work was suspended.

6. SUBSIDIARIES

The Company has three subsidiary companies viz. Torrent Power Grid Limited, Torrent Energy Limited and Torrent Pipavav Generation Limited.

Torrent Power Grid Limited on 22nd April, 2013 received the final Tariff Order for its second phase of 400 kV D/c transmission line from SUGEN to a point near Gandhar and LILO of one circuit of existing Gandhar (Jhanor) - Dehgam line. The tariff order for third phase of the said Project is awaited.

Torrent Energy Limited, as aforementioned, besides developing the 1,200 MW gas based DGEN Mega Power Project at Dahej SEZ also distributed 66.48 MUs to Dahej SEZ units as a licencee during FY 2012-13 (Previous Year 55.70 MUs).

Torrent Pipavav Generation Limited is involved in the 2,520 MW coal based Super Critical Pipavav Project at Pipavav village in Amreli District of Gujarat.

7. DIRECTORS

Shri Keki M. Mistry, Shri Murli Ranganathan and Shri T. P. Vijayasarathy retire by rotation and being eligible, have offered themselves for re-appointment.

For your perusal, a brief resume of the Directors being re-appointed and other relevant details are given in the Explanatory Statement to the Notice convening the Annual General Meeting. The Board of Directors recommends their re-appointment.

The Central Government has, vide its letter dated 18th February, 2013, conveyed its approval for the increase in the number of Directors from 12 to 15, subject to the condition that the increase has to be given effect to within a period of one year, failing which the approval shall lapse.

8. CORPORATE GOVERNANCE

The Corporate Governance philosophy of the Company rests on five basic principles viz. protection of rights and interests of shareholders, equality in treatment of all shareholders, disclosure of timely and accurate information, strategic guidance & effective monitoring by the Board and accountability of the Board to the Company and its shareholders.

As stipulated by Clause-49 of the Listing Agreement, the Management Discussion and Analysis Report and Report on Corporate Governance form part of this Annual Report. Certificate of the Auditors regarding compliance with the conditions of Corporate Governance as stipulated in Clause-49 of the Listing Agreement is also appended to the Annual Report.

9. AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, the Statutory Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re-appointment. They have furnished a certificate regarding their eligibility for re-appointment as Statutory Auditors of the Company, pursuant to Section 224(1B) of the Companies Act, 1956. The Board of Directors recommends their re-appointment.

Observations made in the Auditors'' Report are self-explanatory and therefore, do not call for any further explanation.

10. COST AUDITORS

M/s. Kirit Mehta and Co., Cost Accountants, Mumbai have been appointed as the Cost Auditors of the Company for FY 2012-13. Cost audit report for FY 2011-12 was filed on 31st January, 2013 (within the prescribed time limit) pursuant to Section 233B of the Companies Act, 1956.

11. DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, in relation to the financial statements for FY 2012-13, the Board of Directors states that:

i. In preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2013 and of the profits for the year ended 31st March, 2013;

iii. The Directors have taken proper and sufficient care for 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; and

iv. The financial statements have been prepared on a going concern basis.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The details relating to technology absorption and foreign exchange earnings & outgo prescribed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 ("the Rules") are given in the Annexure to and form part of this Annual Report. As the Company is not a scheduled industry, details in respect of conservation of energy pursuant to the said Rules are not furnished.

13. PARTICULARS OF EMPLOYEES

The information required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this Annual Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report is being sent to all the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining the particulars may obtain it by writing to the Company Secretary of the Company.

14. APPRECIATION AND ACKNOWLEDGEMENTS

The Directors are pleased to place on record their appreciation for the continued guidance and support received from the Central Government, Government of Gujarat, Government of Maharashtra, Government of Uttar Pradesh, Appellate Tribunal for Electricity, Central Electricity Regulatory Commission, Central Electricity Authority, Petroleum and Natural Gas Regulatory Board, Gujarat Electricity Regulatory Commission, Maharashtra Electricity Regulatory Commission, Uttar Pradesh Electricity Regulatory Commission, Power Grid Corporation of India Limited, National Load Dispatch Centre, Regional Load Dispatch Centres, State Load Dispatch Centres, Regional Power Committees, Chief Electrical Inspector (Gujarat), Gujarat Energy Development Agency, Gujarat Urja Vikas Nigam Limited, Dakshin Gujarat Vij Company Limited, Uttar Gujarat Vij Company Limited, Gujarat Energy Transmission Corporation Limited, Gujarat Power Corporation Limited, Ahmedabad Municipal Corporation, Surat Municipal Corporation, Chief Electrical Inspector (Maharashtra), Maharashtra Energy Development Agency, Maharashtra State Electricity Distribution Company Limited, Maharashtra State Electricity Transmission Company Limited, Bhiwandi Nizampura Municipal Corporation, Chief Electrical Inspector (Uttar Pradesh), Dakshinanchal Vidyut Vitran Nigam Limited, Paschimanchal Vidyut Vitran Nigam Limited, Poorvanchal Vidyut Vitran Nigam Limited, Madhyanchal Vidyut Vitran Nigam Limited, Uttar Pradesh Power Transmission Company Limited, Uttar Pradesh Power Corporation Limited, Agra Nagar Nigam, PTC India Limited, MP Power Management Company Limited, India Energy Exchange, Power Exchange India Limited, Siemens India Limited and Siemens AG, Coal Suppliers and Transporters including South Eastern Coalfields Limited and Indian Railways, Gas Suppliers and Transporters including Reliance Industries Limited, Indian Oil Corporation Limited, GAIL (India) Limited, Reliance Gas Transportation Infrastructure Limited, Gujarat State Petronet Limited, Petronet LNG Limited, Bharat Petroleum Corporation Limited and Hazira LNG Private Limited, Financial Institutions including HDFC Limited, IDFC Limited, Life Insurance Corporation of India and Power Finance Corporation; Banks including Canara Bank, HDFC Bank, IDBI Bank, KfW IPEX Bank GmbH, Kotak Mahindra Bank, Punjab National Bank, State Bank of India, UCO Bank and Security Trustees including IDBI Trusteeship Services Limited and SBICAP Trustee Company Limited. The Board recognizes the contribution of the esteemed consumers to the growth of the Company and takes this opportunity to pledge the Company''s commitment to serve them better. The Board would also like to express sincere appreciation for the commitment and contribution of all its employees. The Board also thanks the Company''s shareholders for their unstinted support.

For and on behalf of the Board of Directors

Ahmedabad Sudhir Mehta

29th May, 2013 Chairman

Mar 31, 2012

Dear Shareholders,

The Directors have pleasure in presenting the 8th Annual Report of the Company together with the Audited Accounts for the year ended 31st March, 2012.

1. HIGHLIGHTS

The key highlights for the financial year 2011-12 are:

- Increase in Revenue by 15.96% to Rs. 7917.82 Crore

- Increase in PBDIT by 9.66% to Rs. 2355.82 Crore

- Increase in PAT by 16.11% to Rs. 1237.46 Crore

Gross CER Income of Rs. 324.99 Cr earned by SUGEN during FY 2011-12 by selling 6.67 Mn CERs to buyers of repute. CER futures prices have fallen from 13 Euros in first quarter of FY 2011-12 to around 4 Euros in March 2012.

1147.5 MW SUGEN Mega Power Plant has been awarded 5 Star rating by British Safety Council for Health and Safety Management System. The Plant has also obtained Energy Management System Certifications EN 16001:2009 & ISO 50001:2011. Moreover, IMS Certification covering ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007 has been renewed.

Tariff order for FY 2011-12 and MYT order for 2nd Control Period FY 2011-12 to FY 2015-16 has been issued by Hon'ble Gujarat Electricity Regulatory Commission (GERC) on 6th September, 2011 for AMGEN, Ahmedabad & Surat Distribution under which it approved tariff hike for Ahmedabad @ 22 paise per unit (4.68%) and Surat @ 12 paise per unit (2.63%).

Hon'ble Appellate Tribunal for Electricity (APTEL) has upheld claims of the company in respect of ARR 2009-10 and ARR 2010-11.

Reduction in T&D losses in Ahmedabad, Gandhinagar and Surat distribution circles to 6.84% in FY 2011- 12 as against 7.23% in FY 2010-11; one of the lowest in the country. Reduction in AT&C losses in Bhiwandi to 17.85% in FY 2011-12 as against 18.43% in FY 2010-11; and in Agra to 54.33% in FY 2011- 12 as against 61.19% in FY 2010-11.

Short term power purchase contracts for 290 MW entered into to cater to the shortfall in demands of Ahmedabad, Gandhinagar and Surat distribution circles.

Torrent Energy Limited (TEL), a wholly owned subsidiary of the Company, has been granted status of Co Developer by Ministry of Commerce & Industry at Dahej SEZ area and DGEN Power Project (being developed by TEL) has been granted Provisional Mega Power Status by Ministry of Power, Govt of India.

The Company's first 49.6 MW Wind Power Plant at Lalpur, District Jamnagar, Gujarat was successfully commissioned during the year. The Company also signed an agreement with ReGen Powertech Pvt. Ltd to commission 75 MW wind project at Bhud, District Sangli, Maharashtra.

2. FINANCIAL RESULTS

Summary of the financial results for the year under review is as under:

(Rs. Crores)

For the For the Particulars year ended year ended 31st March, 2012 31st March, 2011

Total Income 8019.66 6930.48

Profit before Depreciation, Interest and Tax 2355.82 2148.22

Depreciation 365.88 392.68

Interest 310.69 327.15

Profit before Tax 1679.25 1428.39

Current Tax 338.94 284.79

Deferred Tax 105.26 99.35

(Excess) / Short Provision for Taxation for earlier years (2.41) (21.47)

Profit After Tax 1237.46 1065.72

Add: Balance brought forward 862.12 499.40

Balance available for Appropriation 2099.58 1565.12

Appropriations:

Transfer to Contingency Reserve 1.00 1.00

Transfer to General Reserve 500.00 400.00

Dividends:

Interim Dividend 141.73 -

Dividend Distribution tax on interim dividend 22.99 -

Proposed Dividend 165.35 259.85

Dividend Distribution Tax on proposed Dividend 26.83 42.15

Total Dividend 307.08 259.85

Total Dividend Distribution Tax 49.82 42.15

Balance 1241.68 862.12

3. DIVIDEND

The Board of Directors had decided that the Company as a policy will endeavour to distribute 30% of its annual profits after tax as dividend in one or more tranches.

In line with the said policy, the Board of Directors' has,

(a) On 21st January 2012, declared normal annual dividend as Interim Dividend of 30% i.e. Rs. 3.00 per equity share on 47, 24, 48,308 equity shares of Rs. 10/- each for FY 2011-12, amounting to Rs. 141.73 Crores and the said dividend had been paid on 2nd February, 2012.

(b) On 11th May 2012, recommended special dividend as final dividend (over and above the interim dividend) of 35% i.e. Rs. 3.50 per equity share on 47, 24,48,308 equity shares of Rs. 10/- each for FY 2011-12, amounting to Rs. 165.35 Crores

Thus, the aggregate dividend works out to be Rs. 6.50 per share (Previous Year Rs. 5.50). With Dividend Distribution Tax of Rs. 49.82 Crores (Previous Year Rs. 42.15Crores), the total outflow on account of dividend works out to Rs. 356.90 Crores (Previous Year Rs. 302.00 Crores). The distributed profits including DDT are 29% (Previous Year 28%) of annual profits after tax. The aforesaid dividends would be tax free in the hands of the shareholders.

4. ECONOMY AND POWER SECTOR SCENARIO

4.1 ECONOMY

Managing growth and price stability are the major challenges of macroeconomic policymaking. In FY 2011- 12, India found itself in the heart of these conflicting demands. GDP growth in FY 2011-12 is expected to be 6.9% only mainly due to global economic slowdown, financial crisis in Europe and certain exogenous shocks like the Japanese nuclear disaster. Domestically, decline in GDP growth rate is primarily due to the dip in the growth in Industry to 3.9% in FY 2011-12 from 7.6% in FY 2010-11. GDP growth has been projected at 7.6% and 8.6% for FY 2012-13 and FY 2013-14 respectively. Inflation too was close to double digits with Wholesale price index (WPI) inflation at 9.74% and food inflation at 8.95% in April, 2011. Though, inflation eased to 6.89% in March 2012, it is expected to average 6.5%-7.0% in FY 2012-13. A rise in commodity prices and weakening of the Indian rupee remain significant risk factors for the inflation trajectory. India's Balance of Payments slipped into negative territory in third quarter of FY 2011-12 for the first time in three years as exports slumped and imports rose. India's current account deficit is expected to widen to 3.5% in FY 2011-12 as compared to 2.6% a year ago. India's fiscal deficit jumped to 5.9% of GDP for FY 2011-12 against the target of 4.6% and Government has set fiscal deficit target for FY 2012-13 at 5.1% of GDP, which is very high. These deficits, inter alia, had an impact on India's long term BBB rating which has shifted to negative from stable.

4.2 INFRASTRUCTURE

India is one of the fastest growing economies in the world. The Eleventh Plan emphasized the need for removing infrastructure bottlenecks for sustained growth. Inclusive growth of the economy can be achieved only if the infrastructure deficit is overcome by adequate investment to support higher growth and an improved quality of life for both urban and rural communities. Public private partnerships (PPPs) in this sector are gaining importance and are benefiting from government support. PPPs are expected to augment resource availability as well as improve the efficiency of infrastructure service delivery. Allocation of natural resources in a transparent and fair process would lead to the growth of infrastructure. The Ashok Chawla Committee recommendations include adoption of open, transparent and competitive mechanism for allocation of natural resources and greater disclosure of the existing approval process. The Supreme Court's recent judgment that the basis of the allocation of all natural resources should be by way of auction is an important step in this direction.

4.3 POWER SECTOR SCENARIO

The installed capacity at 1,713 MW in 1950 has grown to 1,99,877 MW in March 2012 symbolizing the dynamic growth of the sector. The Eleventh Plan which began with an installed capacity of 1, 32,329 MW has grown by 51.05% as of 31st March, 2012. The Per capita consumption of electricity in the country has increased from 592 kWh in FY 2003-04 to 814 kWh in FY 2010-11. However, for a nation that has a population of over a billion and aims at 9% GDP growth by FY 2016-17, these figures are far from adequate.

A) DEMAND SUPPLY SCENARIO

The demand for electrical power in India has been growing at approx. 6% during the last six years whereas the supply has been growing by approx. 5.4% over the same period due to which the energy deficit has persisted over the years. The demand-supply gap remains high, with energy shortage of 8.5% and peak power shortage (mainly generated from the commercial and industrial segments) at 11.10% as of 31st March, 2012. However, both energy and peak power deficits have reduced during the Eleventh Plan period as can be seen from the following chart:

The western region of the country faced the highest Energy deficit of 11.40% and Peak power deficit of 13.80% during FY 2011-12. However, in the state of Gujarat, the Energy deficit was almost Nil at 0.4% and peak power deficit was low at 1.8%. Further, Gujarat is expected to become a power surplus state soon in terms of both peak demand and energy requirement.

Shortages of this magnitude can significantly constrain industrial activity and restrict economic growth of any country.

B) GENERATION

The Government of India has continually initiated several reforms to create a favourable environment for addition of new generation capacity in the country. The Electricity Act 2003 had put in place a highly liberal framework for generation which includes de-licensing of generation, setting up thermal generation projects without techno-economic clearance of CEA and captive generation being freed from all controls.

The installed capacity crossed the 2,00,000 MW mark on 14th April, 2012. The fuel wise breakup of the installed capacity as on 31st March, 2012 as given below shows that there is a major shift in renewable capacity from 1% in 1999-2000 to 12% in 2011-12:

The Working Group on Power has estimated a capacity addition of 94,285 MW (incl. 18,500 MW from renewable sources) for the Twelfth Plan against the target of 92,700 MW (incl. 14,000 MW from renewable sources) for the Eleventh Plan. The Eleventh Plan, by making a capacity addition of 67,548 MW (including 16,743 MW from renewable sources), has surpassed the Ninth and the Tenth Plan that registered capacity addition of 19,251 MW and 27,283 MW respectively. Around 39% (i.e. 26,251 MW) of the capacity addition made in the Eleventh Plan has been achieved in FY 2011-12, which is greater by 85% as compared to FY 2010-11. The total generation for FY 2011-12 at 8,71,604 MUs (excluding from renewable sources), also registered a growth of 8% over the last year.

The sector wise share in installed capacity addition in Ninth, Tenth and Eleventh Plan as given under shows that the private sector has taken a big leap and is poised to play a greater role in the coming years thus, changing the industry structure for power generation in India.

Though the progress in the sector is noteworthy, yet the desired levels have not been achieved. While the power sector demand for coal at approx. 696 million tonnes (MT) has grown at a compounded annual growth rate (CAGR) of 7.3 % in FY 2010-11 and FY 2011-12, the domestic coal production of Coal India Limited (CIL) has remained stagnant at around 430 MT in the same period. Further, the high carbon tax rate of 30% in Australia and the Indonesian coal policy of benchmarking coal sales to an index-based price linked to global rate along with a plan to impose a 25% export tax on coal impact import prices adversely.

Gas-based power capacity was expected to increase to 20,000 MW at the end of the Eleventh Plan but the availability of domestic gas was not adequate to feed the existing projects and projects added during Eleventh Plan. The commitments of domestic gas allocation made earlier to power stations were not fulfilled. This led to decrease in national PLF of gas based power plants from 66.15% in FY 2010-11 to 59.91% during FY 2011- 12. Even though the Empowered Group of Ministers (EGoM) allocated an additional 30 million metric standard cubic metres per day (mmscmd) gas supplies to power projects from Reliance's KG-D6 fields, besides the existing allocation of domestic gas, the domestic gas supply shortages could not be met due to the continuous drop in gas output from the KG D6 fields to 28.16 mmscmd in March 2012, against the projection of 80 mmscmd. The alternative to domestic natural gas, imported LNG, though available adequately, could not be used to make up for the shortfall in domestic gas due to its high cost.

During the year, first Ultra Mega Power Project (UMPP) of the country was commissioned successfully. However, the first four UMPPS awarded seven years ago have run into various troubles and roadblocks. Domestic Fuel availability and cost would be the main challenges faced by these UMPPs.

The key trends and developments in the generation sector are as under:

1. CIL Board released draft fuel supply agreements (FSA) for power plants that have entered into long-term power purchase agreements with Discoms and would get commissioned on or before March, 2015. However, it offers only limited self-penalty of 0.01% for not supplying at least 80% of committed supply.

2. The Ministry of Coal has migrated to Gross Calorific Value (GCV) based grading system for non-coking coal from the earlier Useful Heat Value (UHV) based system with effect from 1st January 2012.

3. Auction by Competitive Bidding of Coal Mines Rules, 2012 have been notified on 2nd February, 2012.

4. Ministry of Environment and Forests (MOEF) has announced Fast Track Environmental Clearance for Thermal Power Projects.

5. Several Joint Ventures have been set up in the country for manufacturing of supercritical boilers & turbine generators with technology tie-ups from International manufacturers. With a view to encourage domestic manufacturing of supercritical units, bulk orders for around 20 supercritical units have been approved by the Government with a mandatory stipulation to incorporate the condition of setting up of pre-agreed Phased Domestic Manufacturing Programme (PMP) in the bids to be invited. These measures are yet to make an impact.

6. In the Finance Bill 2012, the following benefits have been proposed which would ameliorate the worsening state of the power generation sector:

a. Extension of 80IA benefit (claiming 100% deduction of profits) for plants commissioned on or before 31st March 2013.

b. Additional depreciation of 20% in the initial year has been proposed to be extended to new assets acquired by power generation companies.

c. Full exemption from basic duty of 5% to Natural Gas and LNG.

d. Full exemption from basic custom duties and concessional countervailing duty (CVD) of 1% to steam coal for a period of 2 years till 31st March 2014.

e. To constitute an inter-ministerial group to periodically review the allocation of coal mines and make necessary recommendations for de-allocation, if required.

f. Provision to allow external commercial borrowing to part-finance rupee debt of existing power projects and floating tax-free bonds of Rs 10,000 crores.

C) TRANSMISSION

Power transmission sector in India is witnessing a massive system augmentation drive in accordance with generation capacity addition. However, transmission works are delayed / held up because of Right-of-Way (RoW) issues, non-availability/delay in getting Forest Clearance and delay in land acquisition for sub-stations.

As per CEA report, there are total 2, 74,882 ckm transmission lines and 3, 83,465 MVA transformer capacity as on 31st March 2012. As per the report of Working Group on Power, the target for transmission line capacity addition at the end of Eleventh Plan was 68,673 ckt. kms against which around 71,644 ckt. kms has been estimated as completed while transformation/substation capacity addition was targeted at 1,57,691 MVA out of which around 1,28,955 MVA has been estimated as completed. The targets for the Twelfth Plan include addition in transmission lines of about 1, 20,000 ckt. Kms, HVDC terminal capacity of 13,000 MW and AC transformation capacity of 2, 95,000 MVA.

The country is now building lines at 800 kV and 1200 kV HVDC level. The Northern, Western, Eastern and North-Eastern regional grids with capacity of about 133 GW have been synchronized with one another while the Southern grid (49 GW) is expected to be synchronized with these grids by 2014. Integration of renewable energy generation into the grid is planned but this may increase the complexity in the monitoring and control of such large grid. The existing SCADA/EMS based grid operation has the capability to provide only steady state view of the power grid. Therefore, Phasor Measurement Units (PMU) and Wide Area Measurement System (WAMS) based technology is the need of the hour which would be helpful in monitoring safety and security of the grid and in enabling control/corrective actions.

The new Regulations for Sharing of Transmission Charges and Losses w.e.f. 1st July 2011 have shifted the transmission pricing mechanism from Postage Stamp Method to Point of Connection Mechanism (PoC). Artificial transmission tariff based barriers (pancaking) to the geographic outreach by generators, distribution companies and open access customers have been mitigated by this new mechanism.

Permissible frequency range has been narrowed down to 49.5 - 50.2 Hz from 49.2 - 50.3 Hz. to reduce the misuse of the Unscheduled Interchange (UI) as a route for trading and to maintain the grid discipline.

D) DISTRIBUTION

The distribution sector which constitutes the last mile connectivity has been dominated by state utilities with only handful of discoms in private sector. Though the share of private sector in the distribution network is only about 4%, its share in terms of energy sold is about 10%.

In the past five years distribution line length has grown at a CAGR of 5.8% to reach 8.26 million ct. km in FY 2010-11 and transformer capacity has grown at an estimated CAGR of approx. 9.2 % to reach 3,75,290 MVA as of 2010-11.

The Twelfth Plan envisages rapid augmentation and strengthening of distribution networks to ensure that the sector is able to absorb the upcoming generation.

Addressing high AT&C losses is a major challenge. Government of India's initiative to reduce AT&C losses below 15% through Restructured Accelerated Power Development Reform Programme (R-APDRP) announced in July 2008 with an outlay of Rs. 515 billion has achieved a marginal reduction of 1% in AT&C losses.

Absence of political will and the disposition of the State Electricity Regulatory Commissions (SERCs) have led to widening gap between average cost of supply and average revenue realized by the generators/distributors. The gap was approx. Rs. 0.86 per unit without subsidy (Gap with subsidy - Rs. 0.59). Stagnant tariffs and increasing costs resulted in huge losses and negative net worth of state discoms which are expected to reach Rs.1.80 lakh cr and Rs. 75,000 crores respectively by FY 2011-12, as per Crisil Research. This has led to financial institutions and banks adopting a cautious stance towards lending to the power sector. National Electricity Fund (NEF) set up by Govt of India to provide interest subsidy on loans for implementing network improvement projects may improve lender confidence.

The judgment by APTEL directing the SERCs to notify suo moto tariff orders, fuel cost pass-through mechanism in the ARR on a monthly /quarterly basis and the recommendations of Shunglu committee on Utility finance, inter-alia, including adoption of franchisee model are some of the positive developments. With invitation for bids for six circles in M.P. and Orissa in FY 2011-12, the franchisee model may be considered to be gaining increased acceptance. However, it remains to be seen whether the Franchisee model would address the woes of the Distribution sector.

E) RENEWABLE ENERGY (RE)

The Indian renewable energy sector witnessed significant growth during the year under review. The total installed capacity was approx. 25,000 MW as on 31st March, 2012. Wind energy continues to be the single largest component of the RE portfolio, accounting for nearly 70% of all Green power, followed by small hydro power at 15% and bagasse based cogeneration at 8%. Wind power installations in FY 2011-12 were the highest so far at 3163 MW and the total wind power capacity addition during the Eleventh Five Year Plan was approx. 10,233 MW, which was double the capacity addition during Tenth Plan period.

The Centre has announced an ambitious National Solar Mission (NSM) under which 20,000 MW of solar power capacity is expected to be added in the next decade. The mission is going on as scheduled and is on target. Gujarat's 600 MW solar power park, touted as Asia's first and largest solar power park, is a boost to India's efforts towards low carbon growth. Solar tariffs have crashed more than 50% in the past 18 months from approx Rs.17 in July 2010 to approx. Rs. 9 in December 2011.

One of the key factors driving the growth of renewable sector is the Renewable Purchase Obligation framework that requires all discoms to source a part of their electricity purchase from renewable energy sources. Also, there has been good capacity addition under the Renewable Energy Certificate (REC) framework. Some regulators have been proactive in stipulating feed-in tariffs for solar power that are meant to give a fillip to investments in the sector Ã thereby making it attractive for investors. Besides, there was accelerated depreciation and generation-based incentive (GBI), as incentives to spur investment in wind energy. Despite such positive measures, prices of renewable energy equipment, in particular wind turbines, which are on the higher side impact the IRRs of the renewable projects adversely.

However, inspite of the tremendous growth, there is a large untapped potential. The current capacity represents less than one-third of the estimated potential of over 84,776 MW (excluding solar). Solar power potential alone is estimated to be about 100 GW, compared to the installed capacity of about 1 GW.

F) POWER TRADING

Power trading market has emerged as the fastest growing segment with a CAGR of over 24% in last six years. The short term transactions are facilitated through Bilateral (traders and term ahead contracts), Power Exchanges [currently Indian Energy Exchange (lEX) and Power Exchange India Limited (PXIL)] and Unscheduled Interchange (UI). Of the total generation in FY 2011-12, 94,512 MUs (11%) of power were traded through short term transactions. The composition is as follows:

Bilateral IEX PXIL UI

51,932 MUs (54.95%) 13,793 MUs (14.59%) 1,029 MUs (1.09%) 27,758 MUs (29.37%)

The short term transactions have increased by 12,961 MUs during FY 2011-12 registering a growth of around 16% over FY 2010-11. This is due to increase in Bilateral transactions by 13,981 MUs along with decrease in exchanges and UI transactions by 698 MUs and 322 MUs respectively. The average price of power transacted during FY 2011-12 through Bilateral decreased to Rs. 4.19/kwh from FY 2010-11's price of Rs. 4.79/kwh, while the average price of power transacted during FY 2011-12 through Exchanges remained same at FY 2010-11's price of Rs. 3.48/kwh. The reasons for decline in bilateral trading price include increase in power available for short term trading, reduced seasonal demand from distribution utilities, and utilities choosing to shed load instead of procuring short term power to meet shortages.

Network congestion, poor utility finances, high aggregate technical and commercial losses, trading margin cap, transmission capacity constraints and limited implementation of open access are the constraints that need to be dealt with in order to ensure accelerated growth of the trading segment. Hon'ble CERC and 24 SERCs are working towards the creation of a strong regulatory framework for the effective functioning of the power market.

G) RISKS & CONCERNS

The world economy and consequently Indian economy is in an uncertain state. While the Indian Power Sector has gained considerable ground in the Eleventh Plan Period, the progress in the sector has been limited due to various issues faced by it. The private sector has come a long way since the initial negotiated contracts to transparently and competitively bid projects. However, the private sector is not a panacea for all the challenges and adequate attention needs to be paid to address the fundamental issue of reforms. Some key issues and concerns that adversely impact the sector are mentioned below:

- Both demand predictions and cost realizations have become uncertain and as a result the generation projects in pipeline are stagnating.

- For existing projects, domestic fuel shortages and high costs of fuel imports remain a challenge that the generation sector needs to address. The domestic supply of both coal and natural gas has failed to match the growing demand. Gas production from KG-D6 basin is currently subdued due to technical problems dealing with reservoir complexities and is likely to remain at such levels over the next couple of years after which the output is expected to rise.

- Land acquisition and other clearances including environment and forest, water linkage, RoW, civil aviation etc. take a lot of time, increasing the pre-development cycle leading to delays in both generation and transmission projects which also escalates the project cost and builds uncertainties.

- The equipment industry lacks standardization in practices in terms of commercial terms, technology, performance standards, etc.

- The huge magnitude of the losses of state discoms will put pressure on the cash flows of state discoms, increasing the instances of disruption in electricity supply to consumers and limit the progress in strengthening and augmenting state network and also increase the risk of investments and reduce bankability of projects.

- In the Renewables sector, the rollback of Accelerated Depreciation benefit and the non-extension of Generation Based Incentive (GBI) can keep power developers at bay and could reduce renewable capacity addition in FY 2012-13 and beyond.

- Transmission congestion is one of the biggest challenges hindering the development of the short term power market and therefore the merchant power rates.

- Shortage of manpower is another concern facing the power sector which is competing with several other growing sectors for the same manpower pool.

H) FUTURE OUTLOOK AND OPPORTUNITIES

Powering India is imperative to sustained economic growth. The country's demand for power is likely to soar to 1,993 Billion Units (BUs) from the present 937 BUs after a decade. The capacity addition requirement corresponding to this incremental demand works out to 1,69,185 MW i.e. almost doubling the installed capacity the country has as on 31st March, 2012. On an average it comes to 16,919 MW of addition per year which seems achievable if the same is compared to the capacity addition made in FY 2011-12. Other factors impacting the power sector favourably are:

- Fast Track clearance from MoEF for Thermal Power Projects, new Land Acquisition Bill bringing benefits for farmers and the proposed Single Window Clearance system for Power Projects would certainly move the Generation sector.

- Government has taken the positive step by ensuring FSA for coal based plants expected to come up before 31st March, 2015. Captive mining and e-auction of coal would also improve coal supply.

- The National Gas Grid, consisting of existing and upcoming gas pipeline infrastructure, is expected to be available that would effectively cover all the major consumption centres in the country.

- The adoption of supercritical technology for majority of the upcoming projects, and the policies promoting it, is a step towards reducing greenhouse gas emissions.

- The emphasis is also being given to the development of nuclear power, hydro power as well as power from renewable sources. The National Solar Mission and Gujarat Solar Policy are major initiatives. Also the Renewable Purchase Obligation (RPO) and Renewable Energy Certificate (REC) framework have become major factors driving the growth of the renewable sector.

- APTEL directives to the State Commissions would help in raising the distribution tariff in a timely manner.

- The private sector is set to take a leap with increasing participation in generation and transmission, particularly through the competitive bidding process and more distribution circles getting privatized through the distribution franchisee model.

If major steps are taken power sector could tap the emerging opportunities and could achieve the inherent growth thus, providing one of the biggest avenues to participate in the development of India's infrastructure.

5. REVIEW OF COMPANY'S BUSINESS

The Company is an integrated utility engaged in the business of power generation, transmission and distribution of electricity with operations in the states of Gujarat, Maharashtra and Uttar Pradesh.

GENERATION

SUGEN Mega Power Plant near Surat

During FY 2011-12, SUGEN achieved PAF of 89.29% (Previous Year - 95.32%) and PLF of 75.99% (Previous Year- 82.77%) and dispatched 7430 MUs (Previous Year - 8070 MUs). PAF reduced due to increase in planned maintenance during the year whereas lower gas supply from domestic sources, reluctance of beneficiaries to off take power using LNG which is expensive, regional transmission constraints and lower PAF have affected PLF of SUGEN in FY 2011-12.

Govt. of Gujarat has notified the Green Cess Act, 2011 with effect from 1st August, 2011, according to which Green Cess of 2 paise/unit is payable by all generating stations on their gross generation. However, the levy of such Green Cess has been challenged in the Gujarat High Court by some industries.

AMGEN in Ahmedabad

AMGEN has an installed capacity of 500 MW, of which 400 MW is coal based and 100 MW is gas based. The Company has engaged Doosan for upgradation of E & F stations at AMGEN whereby the capacity of both stations would increase to 120 MW each from existing 110 MW each.

During FY 2011-12 from its 500 MW capacity, the Company achieved PAF of 95.38% (Previous Year - 92.98%) and PLF of 77.80% (Previous Year - 82.53%) and dispatched 3128 MUs (Previous Year 3,327 MUs). While the availability was high as compared to previous year, PLF was lower on account of application of merit order dispatch, reduced KG-D6 gas supply etc. AMGEN is also liable to pay Green Cess of 2 paise/unit according to the Green Cess Act. However, the levy of such Green Cess has been challenged in the Gujarat High Court by some industries.

Wind Power Plant at Lalpur

The Company commissioned its 49.6 MW Wind Power Plant at Lalpur. The Plant has been registered under REC scheme with NLDC. Selling of Renewable Energy certificates on power exchange has been started with first trade being carried out in the month of March 2012.

DISTRIBUTION

Ahmedabad and Surat

The sales were higher at 8804 MUs in FY 2011-12 as against 8527 MUs during the previous year, registering a marginal growth of 3.25%. The T&D loss was reduced marginally to 6.84% in FY 2011-12 from 7.23% during the previous year and is one of the lowest in the country. The consumer base for both the areas as on 31st March, 2012 was 21.56 lacs (Previous Year - 20.87 lacs). The overall peak system demand for Ahmedabad was 1309 MW in FY 2011-12 as compared to 1152 MW in Previous Year, an increase of 13.6%. The overall peak system demand for Surat was 554 MW in FY 2011-12 as compared to 566 MW in Previous Year, a decrease of 2.2%. To cater to inability to off take power available from SUGEN and AMGEN using LNG (due to reduction in domestic gas supply), which is expensive and also increase in demand of Ahmedabad and Surat, the Company entered into an agreement with GUVNL for 140 MW for FY 2011-12 and FY 2012-13 and with Adani Power Limited and Sterlite Energy Limited for 75 MW each for FY 2012-13.

GERC (Multi Year Tariff) Regulations, provides for the truing up of previous years expenses and revenue based on audited accounts vis-ÃÂ -vis the approved Annual Revenue Requirement and categorization of variations. The Tariff order was issued by Hon'ble GERC on 6th September, 2011 for Ahmedabad & Surat Distribution effective from 1st September, 2011 after taking into account the effect of Hon'ble APTEL's orders. Hon'ble GERC vide its letter dated 23rd November, 2011 has directed the Company to file the petition for truing up of FY 2010-11 and determination of tariff for FY 2012-13 and accordingly, the Company had filed its tariff Petition. Hon'ble GERC also notified the new Open Access regulations on 1st June, 2011.

Bhiwandi

The sales were higher at 2636 MUs in FY 2011-12 as against 2511 MUs during the Previous Year, registering a marginal growth of 4.98%. The AT&C Loss was marginally lower at 17.85% in FY 2011-12 as against 18.43% during the Previous Year. The consumer base as on 31st March, 2012 was 2.39 lacs (Previous Year 2.21 lacs).

Agra

The sales were higher at 1054 MUs in FY 2011-12 as against 980 MUs during the Previous Year, registering a growth of 7.55%. The AT&C Loss was lower at 54.34 % in FY 2011-12 as against 61.30% during the Previous Year. The consumer base as on 31st March, 2012 was 2.74 lacs (Previous Year 2.88 lacs). The reduction in consumers was mainly on account of weeding out of 37,000 fictitious consumers; though 23,000 consumers were added during FY 2011-12. The peak system demand for this distribution area was 383 MW during FY 2011-12, which was marginally higher as against 381 MW in the Previous Year.

OVERALL SALES

The overall sales in FY 2011-12 were at 14,983 MUs as against 14,512 MUs during the previous year, registering a growth of 3.25% during the year. The Company earned gross income of Rs.324.99 Crores from sale of CERs during the year, of which Rs. 3.30 crores is payable to the beneficiaries in accordance with CERC guidelines. However, the average rate of CERs dipped from 13 Euros in first quarter of FY 2011-12 to around 4 Euros in March 2012. There was overall reduction in generation of both the generating units viz. SUGEN and AMGEN on account of planned shutdown, reduction in domestic gas availability and inability of beneficiaries to off take power using LNG, which is expensive.

Though the GERC Multi Year Tariff Regulations provide for post tax return of 14% on equity, which is lower than that stipulated by the National Tariff Policy as well as certain SERCs, the regulated business comprising Ahmedabad and Surat could not realize even such lower rate of return. Stiffer operating trajectories in normative parameters, despite continuous efficiency improvements particularly in T&D losses, other stringent normative stipulations, etc. in the MYT Regulations for control period FY 2011-12 to FY 2015-16, limitation in automatic pass through of increase in fuel and power purchase costs and consequent postponement of such recovery including to true up stage impact adversely the financial performance of our regulated business. The above do not augur well for the long term interests of our regulated business unless the normative parameters are pragmatic to provide for continued viability of regulated business. Though Hon'ble APTEL orders on tariff and UI have brought in some relief; the cumulative regulatory gap is on the increase year after year.

Due to initial years of Agra operations, the AT&C losses as well as the operating expenses are high which have led to the unit's losses in the FY 2011-12 also; though reduced from FY 2010-11 levels. Operations are expected to stabilize in FY 2012-13 with improved network augmentation, LT network undergrounding, better meter reading efficiency and reduction in AT&C losses.

Needless to mention that increasing operational efficiency both in generation and distribution have contributed to the overall improvement in performance despite decreased short term power demand and related fuel and transmission constraints.

Interest costs for the Company increased during the year on account of routine capital expenditure incurred at Distribution units for improved efficiency and performance and the increase in interest rates.

In this context the overall;

- PBDIT increased by 9.66% from Rs. 2148.22 Crore to Rs. 2355.82 Crore

- Depreciation decreased by 6.82% from Rs. 392.68 Crore to Rs. 365.88 Crore

- Interest decreased by 5.03% from Rs. 327.15 Crore to Rs. 310.69 Crore

- PBT increased by 17.56% from Rs. 1428.39 Crore to Rs. 1679.25 Crore

- PAT increased by 16.11% from Rs. 1065.72 Crore to Rs. 1237.46 Crore 6.

UPCOMING PROJECTS

The Company is geared to expand its capacities through various upcoming projects which are as follows:-

- UNOSUGEN

The Company is developing UNOSUGEN Project, a 382.5 MW gas based combined cycle power plant adjacent to its existing SUGEN plant, for which the EPC Contract has been awarded to Siemens. All the main plant equipment has arrived at site. All owners inputs required under EPC contract have been provided except gas connectivity, for which GTA has been signed with GSPL. This project is expected to meet about 278 MW additional demand of Ahmedabad and Surat Distribution. Long term PPA has been signed with PTC India Limited for sale of 35 MW. Connectivity Transmission scheme comprising LILO of 400 kV SUGEN TPS - Pirana (PGCIL) one ckt at Generation Switchyard of UNOSUGEN has been approved by the Central Transmission Utility and the work is in progress.

- DGEN MEGA POWER PROJECT

1200 MW gas based DGEN Mega Power Project (Combined Cycle Power Project) at Dahej SEZ is being developed by Torrent Energy Limited (wholly owned subsidiary of the Company). It has been granted status of Co-Developer of Dahej SEZ area by Ministry of Commerce & Industry and Provisional Mega Power Status by Ministry of Power. Power Train Components of all three units have been manufactured. All major components of Heat Recovery Steam Generators (HRSGs) and Balance of Plant have reached site and erection work is going on in full swing. Non-EPC works and due owner's inputs under the EPC contract are almost complete.

The Project has been granted Connectivity scheme through 400 kV Double Circuit line with triple snowbird conductor from DGEN Generating Station to PGCIL's Navsari Sub-station, which is being implemented by Torrent Energy Limited itself. Long Term Open Access has also been granted for 1200 MW of Power (400 MW for Western Region, 400 MW for Northern Region and 400 MW for Torrent Power Limited Ã Ahmedabad), for which the Western Region System Strengthening Scheme comprising 400 kV DGEN-Vadodara line and 220kV Navsari Ã Bhestan line is proposed to be awarded through competitive bidding route by the Central Transmission Utility.

PIPAVAV PROJECT

The Company is setting up 3x840 MW Super criticalcoal-based power project at Pipavav village in Amreli District of Gujarat through SPV Torrent PipavavGeneration Limited. Additional compensation, as per consent settlement approved by Gujarat High Court, has beenpaid to more than 80% of land owners and payment of such compensation to balance landowners is in process.Inspite of this, the Company is facing difficulties in taking possession of the land. Terms of Reference(ToR) for Baitarni West Coal mine allocated to the Project have been approvedby MoEF and Environment Impact Assessment (EIA) study is under preparation.

WIND POWER PROJECT AT BHUD

The Company has entered into agreement with ReGen Powertech Pvt. Ltd. for developing, constructing and maintaining the 75 MW Wind Power Project at Bhud, Dist. Sangli, Maharashtra. l UP SANDILA

The Company has signed the MoU with Government of Uttar Pradesh for development of 1,320 MW Coal Based Power Plant at Sandila, Dist. Hardoi, Uttar Pradesh. Long term Power Purchase Agreement (PPA) has been signed with U. P. Power Corporation Limited (UPPCL) for sale of 90% of Power which has been approved by Hon'ble Uttar Pradesh Electricity Regulatory Commission (UPERC). Terms of Reference (ToR) have been approved by MoEF in August, 2011 and Environmental Impact Assessment (EIA) study has been completed in December, 2011.

FINANCE

During the year, the Company raised long-term loans from various Financial Institutions and Banks to the tune of Rs. 1081.19 Crores, bridge loan of Rs. 50 crores and buyer's credit of Rs. 193.42 Crores. Further from Loan Facility Agreements of Rs 1283 Crores for UNOSUGEN project with KfW (Germany), Infrastructure Development Finance Company Limited, State Bank of India and Bank of Baroda, the Company has availed Rs. 646.19 Cr. The term loans including working capital loans and APDRP Loans outstanding as on 31st March, 2012 were Rs. 3703.95 Crores (Previous Year Rs. 3059.50 Crores). During the year, bridge loan of Rs. 225 Cr drawn for UNOSUGEN was repaid. The Company has repaid an amount of Rs. 444.17 Crores (Previous Year Rs. 417.75 Crores) towards long term loans including loan under APDRP. The Company's long-term debt paper and cash credit are rated AA/Stable by CRISIL. This indicates high degree of safety with regard to timely payment of financial obligations. For letters of credit / bank guarantees, the Company is rated A1 indicating high degree of safety regarding timely payment of the instrument.

8. RISKS AND CONCERNS OF THE COMPANY

Significant risks impacting the Company include;

- Availability of fuel is not a major issue though domestic availability is currently limited. Further, high cost of fuel is one of the main issues faced by the Company. Generation cost at AMGEN is increasing because of GCV based pricing for domestic coal, increasing cost of imported coal and depreciation of Indian Rupee. Freight cost of coal is also expected to go up in FY 2012-13 on account of increased railway freight by 24% in Railway Budget 2012. While imported RLNG is adequately available, its cost continues to be high and currently unaffordable.

- As regards the capacity charge, GERC MYT Regulations 2011 stipulate O&M expenditure without linkage to MVA served and with escalation at rate lower than the inflation rate and also interest on working capital norms have been tightened. Though, FPPPA formula allows pass through of rate increase in fuel cost upto 10 paise/Kwh in a quarter automatically and beyond that with specific approval of Hon'ble GERC, the same does not provide for pass through of mix variance. The normative targets for a year are based on previous year's achievements and are a shifting target. These measures do not abode well for the health of the Distribution sector.

- Availability of land for new power generation projects and sub-stations/corridors in the city area for Power Distribution is a cause of concern. Further, ensuring safety and stability of distribution networks in the cities is a challenge.

- Success stories of some of the Distribution Franchisee operations are tempting many operators to quote very high purchase tariff in recent bids making the basic concept of distribution franchisee unviable.

- The Company also bears the risk of adequate availability of technical personnel, which it proposes to overcome through pro-active recruitment and training.

9. INTERNAL CONTROL SYSTEMS

The Company has an adequate system of Internal Control aimed at achieving efficiency in operations, optimum utilization of resources and compliance with all applicable laws and regulations. Independent firms of Chartered Accountants are appointed as auditors for conduct of the internal audit function. Besides the Company has its own in-house audit function, which conducts routine audit of activities. The observations and recommendations for improvement of the business operations are reviewed by the management and are reported to the Audit Committee.

10. INFORMATION TECHNOLOGY

SAP is operational at SUGEN, AMGEN and Ahmedabad Distribution. SAP was implemented at Surat distribution on 1st September, 2011 and is operational.

11. HUMAN RESOURCES

Development initiatives for human assets in the areas of consumer orientation, self and organizational development, team building managerial effectiveness and up-gradation of technical skills etc. are continuously undertaken by the Company for improving the value of and contribution by its human assets.

The programme titled ÃLearning Adventures' on Sustainability of Organizations was organized at Ranikhet for our select senior most management team. This deserves a special mention for its unique format.

Staff strength as on 31st March 2012 was 7184. (as on 31st March, 2011, 7184).

12. SUBSIDIARIES

The Company has three subsidiary companies namely, Torrent Power Grid Limited, Torrent Energy Limited and Torrent Pipavav Generation Limited.

During the year, Torrent Power Grid Limited received Tariff Order for its first phase and has filed petition for determination of tariff for second and third phases of the Project with Hon'ble CERC pursuant to the provisions of CERC (Terms and Conditions of Tariff) Regulations, 2009. Torrent Energy Limited besides developing the 1,200 MW gas based DGEN Mega Power Project (a Combined Cycle Power Project) at Dahej SEZ also distributed 55.70 MUs to SEZ units during FY 2011-12 (PY 32.25 MUs). Torrent Pipavav Generation Limited is developing the 2,520 MW coal based Pipavav Project in phases at Pipavav village in Amreli District of Gujarat.

13. ENVIRONMENT, HEALTH AND SAFETY

The Company accords the highest priority to Environment, Health and Safety. The initiatives in this context include:

- Fully commissioned first Wind Power Plant of 49.6 MW at Lalpur (Gujarat),

- Process of setting up another 75 MW wind power project at Bhud (Maharashtra)

- "URJA DWEEP" at SUGEN, an unique complex based solely on Green power comprising o SWADHAR - a complete medical centre to cater to healthcare of the locals,

o JARUL - a residential colony of 48 apartments for technicians, and

o Bio Gas plant which will assist in waste disposal in the surroundings and support the household gas and electricity requirement of Swadhar and Jarul.

- In line with its philosophy of highest importance to safety in its various operations and in an effort to create more awareness at the work place about safety and compliance of safety norms so as to avoid accidents at the workplace as also to substantially compensate the personnel and their families who have been adversely affected by accidents, the "Conviction for Safety" policy has been implemented by the Company which is first of its kind in the country. Safety campaigns and public awareness programs have also been enhanced.

- Agreement executed for purchase of solar power (5 MW) from Roof top Programme launched in Gandhinagar by Govt. of Gujarat.

- 5 Star rating by British Safety Council for Health and Safety Management System for SUGEN Mega Power Plant.

- Adoption of safety improvement measures including undergrounding of overhead lines, replacement of old oil type switchgears with SF6 switchgears, replacement of old relays with protective relays and providing DTC fencing and earthing.

14. CORPORATE SOCIAL RESPONSIBILITY

The Company's CSR initiatives are highly influenced by the philosophies of its group Founder Chairman, Shri U N Mehta. He firmly believed that it is the responsibility of every member of the society to give back for all the good that the society has bestowed upon him. The Company continues to make focused efforts for fulfilling its Corporate Social Responsibility, with the thrust areas being education, health & sanitation and public awareness.

During the year, the Company was involved in the following CSR activities:

- Shiksha Setu, the programme spread over 5 years for Teaching Learning Enhancement in all 20 project schools covering approx. 2700 students in FY 2011-12 which comprise four components viz.

- Low Stakes Learning Assessment of students

- Post-Assessment Analysis Workshop.

- Continuous Teachers' Support Programme.

- Individualized ICT-based learning support.

- Completion of Sharda Mandir School project for the children of Indrad Village.

- Shardashish Scholarship Programme which provided scholarship support to 46 meritorious students from economically weak background.

15. DIRECTORS

Shri D.J. Pandian, IAS, Shri V.K. Kukreja and Shri Jinal Mehta were appointed as Additional Directors during the year under review. They hold office up to the commencement of ensuing Annual General Meeting. Shri K. Sridhar has resigned from the Board since the last Annual General Meeting. The Board places on record its appreciation for the valuable services rendered by him during his tenure as Director of the Company.

Shri Pankaj Patel and Shri Kiran Karnik retire by rotation and being eligible, they have offered themselves for re-appointment.

For your perusal, a brief resume of the Directors being appointed / re-appointed and other relevant details are given in the Explanatory Statement to the Notice convening the Annual General Meeting. The Board of Directors recommends their appointment / re-appointment.

16. CORPORATE GOVERNANCE

The governance philosophy of the Company rests on five basic principles viz. protection of rights and interests of shareholders, equality in treatment of all shareholders, disclosure of timely and accurate information, strategic guidance and effective monitoring by the Board and accountability of the Board to the Company and its shareholders.

This report deals with the matters stipulated for the Management Discussion and Analysis Report. A report on Corporate Governance also forms part of the Annual Report. Certificate of the Auditors regarding compliance with the Corporate Governance code is also attached to the Annual Report.

17. AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, the Statutory Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re-appointment. They have furnished a certificate regarding their eligibility for re-appointment as Statutory Auditors of the Company, pursuant to Section 224(1B) of the Companies Act, 1956.

Observations made in the Auditors' Report are self-explanatory and therefore, do not call for any further comments.

18. COST AUDITORS

M/s. Kirit Mehta and Co., Cost Accountants, Mumbai have been appointed as the Cost Auditors of the Company for FY 2011-12. Cost audit report for FY 2010-11 was filed on 26th September, 2011(within the prescribed time limit).

19. DIRECTORS' RESPONSIBILTY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, in relation to the financial statements for FY 2011-12, the Board of Directors states that:

1. In preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2012 and of the profits for the year ended 31st March, 2012;

3. The Directors have taken proper and sufficient care for 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; and

4. The financial statements have been prepared on a going concern basis.

20. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The details relating to technology absorption, foreign exchange earnings and outgo prescribed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 ("the Rules") are given in the Annexure to and forms part of this report. As the Company is not a scheduled industry, details in respect of conservation of energy pursuant to the said Rules are not furnished.

21. PARTICULARS OF EMPLOYEES

The information required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this report. As per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report is being sent to all the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining the particulars may obtain it by writing to the Company Secretary of the Company.

22. APPRECIATION AND ACKNOWLEDGEMENTS

The Directors are pleased to place on record their appreciation for the continued guidance and support received from the Central Government, Government of Gujarat, Government of Maharashtra, Government of Uttar Pradesh, Central Electricity Regulatory Commission, Central Electricity Authority, Gujarat Electricity

Regulatory Commission, Maharashtra Electricity Regulatory Commission, Uttar Pradesh Electricity Regulatory Commission, Western Region Power Committee, National Load Dispatch Centre, Regional Load Dispatch Center, State Load Dispatch Centre, Gujarat Urja Vikas Nigam Limited, Gujarat Energy Transmission Corporation Ltd, Gujarat Energy Development Agency, Chief Electrical Inspector (Gujarat), Maharashtra State Electricity Distribution Company Limited, Maharashtra State Electricity Transmission Company Limited, Maharashtra Energy Development Agency, Power Grid Corporation of India Limited, Gujarat Power Corporation Limited, Uttar Pradesh Power Corporation Limited, Dakshinanchal Vidyut Vitran Nigam Limited, Dakshin Gujarat Vij Company Limited, Uttar Gujarat Vij Company Limited, Indian Railways, Gas suppliers and transporters including Reliance Industries Limited, Indian Oil Corporation Limited, GAIL (India) Limited, Reliance Gas Transportation Infrastructure Limited, Gujarat State Petronet Limited and Petronet LNG Limited, Coal Suppliers including South Eastern Coalfields Limited, Siemens India Limited and Siemens AG, Power Exchange India, India Energy Exchange, Financial Institutions, and Banks including Bank of Baroda, Canara Bank, HDFC Bank, IDBI Bank, IDFC Limited, Life Insurance Corporation of India, KfW IPEX Bank, Power Finance Corporation, Punjab National Bank, State Bank of India and UCO Bank. The Board recognizes the contribution of the esteemed consumers to the growth of the Company and takes this opportunity to pledge the Company's commitment to serve them better. The Board would also like to express its sincere appreciation for the commitment and contribution of all its employees. The Board also thanks its shareholders for their unstinted support.

For and on behalf of the Board of Directors

Ahmedabad Sudhir Mehta

11th May, 2012 Chairman

Mar 31, 2011

The Directors have pleasure in presenting the 7th Annual Report of the Company together with the Audited Accounts for the year ended on 31st March, 2011.

1. HIGHLIGHTS

The key highlights for the Financial Year 2010-11 are:

O All round improvement in the financial performance of the Company Increase in Revenue by 12.23% to Rs. 6,535.64 Crores Increase in PBDIT by 17.68% to Rs. 2,160.40 Crores Increase in PAT by 27.40% to Rs. 1,065.72 Crores

O Reduction in T&D losses in Ahmedabad, Gandhinagar and Surat distribution circles to 7.23% as against 7.62% in FY 2009-10; one of the lowest in the country. Reduction in T&D losses in Bhiwandi also to 17.95% as against 19.33% in FY 2009-10.

O Multi Year Tariff Petition for the second control period from FY 2011-12 to FY 2015-16 in respect of Ahmedabad Generation (AMGEN), Ahmedabad Distribution and Surat Distribution has been filed with the Honble Gujarat Electricity Regulatory Commission (GERC) .

O First year of Distribution Franchisee operations at Agra commenced from 1st April, 2010.

O The 1,147.5 MW Sugen Mega Power Plant has obtained ISO 9001, ISO 14001 and OHSAS 18001 certifications.

O The EPC contract for the 1,200 MW Gas based DGEN Mega Power Project at Dahej SEZ (being implemented by the Companys subsidiary - Torrent Energy Limited) has been signed with Siemens and construction work is in progress.

O The 382.5 MW UNOSUGEN Gas based plant, the brown field expansion to SUGEN Project has received Mega Power Project Status. EPC Contract has been awarded to Siemens and construction work is in progress.

O The third and final phase of 144.5 kms, 400 kV Double Circuit line, part of transmission infrastructure from SUGEN Generating Station to Pirana sub-station of PGCIL with Loop in Loop out at 400 kV sub-station of the Company at Pirana has been commissioned by a subsidiary of the Company.

O Entry into renewable energy sector by signing agreement with Enercon (India) Limited to commission the 44 MW Wind power generation project at Lalpur, District Jamnagar, Gujarat.

2. FINANCIAL RESULTS

A summary of the financial results for the year under review is as under:

(Rs. Crores)

For the year For the year Particulars ended on ended on 31st March, 2011 31st March, 2010

Total Income 6,927.02 5,956.66

Profit before Depreciation, Interest and Tax 2,160.40 1,835.86

Depreciation 392.68 335.35

Interest 338.90 314.06

Profit before Tax 1,428.82 1,186.45

Current Tax 285.22 207.50

Deferred Tax 99.35 142.40

(Excess) / Shortfall in provision for Taxation for earlier years (21.47) -

Profit After Tax 1,065.72 836.55

Add: Balance brought forward 499.40 229.12

Less: Statutory Appropriation 1.00 1.00

Balance available for appropriation 1,564.12 1,064.67

Appropriations

Transfer to General Reserve 400.00 400.00

Proposed Dividend 259.85 141.73

Dividend Distribution Tax 42.15 23.54

Balance carried to Balance Sheet 862.12 499.40

Total 1,564.12 1,064.67

3. DIVIDEND

The Board of Directors has decided that the Company as a policy will endeavor to distribute 30% of its annual profits after tax as dividend. The said distribution is expected to be in one or more tranches.

In line with the said policy, the Board of Directors has recommended a normal annual dividend of 30% i.e. Rs. 3.00 per equity share (Previous Year 30% - Rs. 3.00 per equity share) and a special dividend of 25% i.e. Rs. 2.50 per equity share on 47,24,48,308 equity shares of Rs. 10/- each for the FY 2010-11, amounting to Rs. 259.85 Crores (Previous Year Rs. 141.73 Crores). With Dividend Distribution Tax of Rs. 42.15 Crores (Previous Year Rs. 23.54 Crores), the total outflow on account of dividend works out to Rs. 302 Crores (Previous Year Rs. 165.27 Crores). The distributed profits are 28% (Previous Year 20%) of annual profits after tax. The proposed dividend would be tax free in the hands of the shareholders.

12. SUBSIDIARIES

The Company has three subsidiary companies namely, Torrent Power Grid Limited, Torrent Energy Limited and Torrent Pipavav Generation Limited.

A. Torrent Power Grid Limited

During the year, the third and final phase of the Project (for evacuation of power from SUGEN power generating station) of 144.5 kms 400 kV Double Circuit line as part of transmission infrastructure from SUGEN to Pirana sub-station of Power Grid Corporation of India Limited with Loop in Loop out at 400 kV sub-station of the Company at Pirana has been commissioned.

The company has filed a petition for determination of tariff for the first and second phase of the Project pursuant to the provisions of CERC (Terms and Conditions of Tariff) Regulations, 2009.

B. Torrent Energy Limited (DGEN)

Torrent Energy Limited is implementing the gas based DGEN Mega Power Project at Dahej SEZ. It proposes to establish 3 units of approximately 400 MW each for which the EPC contract has been awarded. Environmental clearance has been received from MoEF for 2 units and the Terms of Reference for other unit have been approved. EPC implementation is in progress. Non-EPC work has commenced and raw water reservoir and road / drains are nearing completion. Connectivity and Long Term Open Access for 1,200 MW has been granted by the Central Transmission Utility. The project is expected to meet 387 MW additional demand of Ahmedabad and Surat distribution.

C. Torrent Pipavav Generation Limited

Torrent Pipavav Generation Limited is setting up the 1,000+ MW coal-based power project at Pipavav in Amreli District of Gujarat. The project has Coal Linkage of Baitarni coal mines and will meet the balance requirement of coal through additional domestic coal linkages / imports. Though the Honble Gujarat High Court has approved the consent settlement with the land owners, the Company is still facing difficulties in land acquisition and efforts are being made to resolve the issue. Terms of Reference have been cleared by MoEF and environmental field studies have been completed.

D. Torrent Power Bhiwandi Limited

During the year under review, the Company has divested its shareholding from Torrent Power Bhiwandi Limited (TPBL). TPBL has, therefore, ceased to be a subsidiary of the Company.

13. ENVIRONMENT, HEALTH AND SAFETY

The Company accords the highest priority to Environment, Health and Safety. The Company has forayed into the wind sector and is in the process of setting up the 44 MW wind power project. In line with its

philosophy of according the highest importance to safety in its various operations, it is focusing on mitigating high risks in its operations at all locations. Apart from laying down stringent operating procedures, appropriate technology is also being deployed for mitigating risks particularly to human lives. Safety campaigns and public awareness programmes have been enhanced.

14. CORPORATE SOCIAL RESPONSIBILITY

The Companys CSR initiatives are highly influenced by the philosophies of its group Founder Chairman, Shri U. N. Mehta. He firmly believed that it was the responsibility of every member of the society to give back for all the good that the society has bestowed upon them. The Company continues to make focused efforts for fulfilling its Corporate Social Responsibility, with the thrust areas being education, health & sanitation and public awareness.

During the year, the Company carried out the following CSR activities:

Ã Expansion of U. N. Mehta Institute of Cardiology and Research Centre (UNMICRC), state of the art cardiac hospital with 450 beds, which has since been completed. The Company has contributed Rs. 4 Crores during the year and cumulatively Rs. 15 Crores for this project. The new facility would include ICUs and ICCUs, cath labs, AHU rooms, conference room, auditoriums and library.

Ã The Company has completed construction of class rooms at Government Primary School, Aanganwadi and play ground for children at Akhakhol village, District Surat. The Company provides medical support to residents and nutrition support to the children of Akhakhol.

Ã The Company has also sponsored Shardashish Scholarship Programme through U. N. Mehta Charitable Trust, which provided financial support to 50 meritorious students from economically weak background.

15. DIRECTORS

During the year under review, term of appointment of Shri Sudhir Mehta, Executive Chairman was pre- closed and he was appointed afresh for a period of 5 years effective from 1st August, 2010. Shri Samir Mehta has been appointed as Executive Vice Chairman for a period of 5 years effective from 1st August, 2010. Also, the term of appointment of Shri Markand Bhatt and Shri Murli Ranganathan, Whole-time Directors were pre-closed and they were appointed afresh for a period of 5 years effective from 1st April, 2011. Shri T. P. Vijayasarathy has been appointed as Whole-time Director for a period of 5 years effective from 1st November, 2010.

Shri Murli Ranganathan and Shri S. K. Barua retire by rotation and being eligible, they have offered themselves for re-appointment.

For your perusal, a brief resume of the Directors being appointed / re-appointed and other relevant details are given in the Explanatory Statement to the Notice convening the Annual General Meeting. The Board of Directors recommends their appointment / re-appointment for approval of the shareholders of the Company.

16. CORPORATE GOVERNANCE

The governance philosophy of the Company rests on five basic principles viz. protection of rights and interests of shareholders, equality in treatment of all shareholders, disclosure of timely and accurate information, strategic guidance and effective monitoring by the Board and accountability of the Board to the Company and its shareholders.

This report deals with the matters stipulated for the Management Discussion and Analysis Report. A report on Corporate Governance also forms part of the Annual Report. Certificate of the Auditors regarding compliance with the Corporate Governance code is also attached to the Annual Report.

17. AUDITORS

M/s. Deloitte Haskins & Sells, Chartered Accountants, the Statutory Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re-appointment. They have furnished a certificate regarding their eligibility for re-appointment as Statutory Auditors of the Company, pursuant to Section 224(1B) of the Companies Act, 1956.

Observations made in the Auditors Report are self-explanatory and therefore, do not call for any further comments.

18. DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, in relation to the financial statements for the year 2010-11, the Board of Directors states that:

1. In preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2011 and of the profit for the year ended on 31st March, 2011;

3. The Directors have taken proper and sufficient care for 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; and

4. The financial statements have been prepared on a going concern basis.

19. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The details relating to technology absorption, foreign exchange earnings and outgo prescribed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 (Ãthe Rules") are given in the Annexure to and forms part of this report. As the Company is not a scheduled industry, details in respect of conservation of energy pursuant to the said Rules are not furnished.

20. PARTICULARS OF EMPLOYEES

The information required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this report. As per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report is being sent to all the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining the particulars may obtain it by writing to the Company Secretary of the Company.

21. APPRECIATION AND ACKNOWLEDGEMENTS

The Directors are pleased to place on record their appreciation for the continued guidance and support received from the Central Government, Government of Gujarat, Government of Maharashtra, Government of Uttar Pradesh, Central Electricity Regulatory Commission, Central Electricity Authority, Gujarat Electricity Regulatory Commission, Maharashtra Electricity Regulatory Commission, Uttar Pradesh Electricity Regulatory Commission, Western Region Power Committee, National Load Dispatch Centre, Regional Load Dispatch Center, State Load Dispatch Centre, Gujarat Urja Vikas Nigam Limited, Gujarat Energy Transmission Corporation Limited, Maharashtra State Electricity Distribution Company Limited, Maharashtra State Electricity Transmission Company Limited, Power Grid Corporation of India Limited, Gujarat Power Corporation Limited, Uttar Pradesh Power Corporation Limited, Dakshinanchal Vidyut Vitran Nigam Limited, Paschimanchal Vidyut Vitran Nigam Limited, Poorvanchal Vidyut Vitran Nigam Limited, Madhyanchal Vidyut Vitran Nigam Limited, Dakshin Gujarat Vij Company Limited, Uttar Gujarat Vij Company Limited, Gas Suppliers and Transporters including Reliance Industries Limited, Indian Oil Corporation Limited, GAIL (India) Limited, Reliance Gas Transportation Infrastructure Limited, Gujarat State Petronet Limited and Petronet LNG Limited, Coal Suppliers including South Eastern Coalfields Limited, Siemens India Limited and Siemens AG, Financial Institutions and Banks including Bank of Baroda, Canara Bank, HDFC Bank, IDBI Bank, Infrastructure Development Finance Company Limited, Life Insurance Corporation of India, KfW-Germany, Power Finance Corporation, Punjab National Bank, State Bank of India and UCO Bank. The Board recognizes the contribution of the esteemed consumers in the growth of the Company and takes this opportunity to pledge the Companys commitment to serve them better. The Board would also like to express its sincere appreciation for the commitment and contribution of all its employees. The Company also thanks its shareholders for their unstinted support.

For and on behalf of the Board of Directors

Ahmedabad Sudhir Mehta

4th May, 2011 Chairman

Mar 31, 2010

The Directors have pleasure in presenting the 6th Annual Report of the Company together with the Audited Accounts for the year ended on 31si March, 2010.

The key highlights for the financial year 2009-10 are:

- All round improvement in the financial performance of the Company Increase in Revenue by 34.93% to Rs. 5823.21 Crores Increase in PBDIT by 123.01% to Rs. 1836.17 Crores Increase in PAT by 105.09% to Rs. 836.55 Crores

- 1147.5 MW SUGEN Mega Power Project has been fully commissioned and was dedicated to the Nation on 30lh September, 2009.

Central Electricity Regulatory Commission (CERC) issued tariff order for SUGEN for 5 years, ending 31st March, 2014. T&D losses in Ahmedabad, Gandhinagar and Surat distribution circles at 7.62%; one of the lowest in the country. Reduction in T&D losses in Bhiwandi to 19.33%.

Gujarat Electricity Regulatory Commission (GERC) issued order for Annual Revenue Requirement (ARR) of FY 2010-11 for Ahmedabad and Surat Distribution allowing moderate tariff hike of approximately 2.30%.

Commenced Distribution Franchisee operations in Agra on 1sl April, 2010. Mega generation projects at Dahej SEZ (DGEN Mega Power Project) and Unit-40 at SUGEN launched. Signed Shareholders Agreement with Gujarat Power Corporation Limited for implementation of the 1000+ MW Coal-Based Power Project at Pipavav, Dist. Amreli, Gujarat.

Torrent Energy Limited (TEL) became the Distribution Licensee for Dahej SEZ and distribution of power commenced on 4th April, 2010. Second phase of power transmission line (80 km. double circuit 400 kV transmission lines) i.e. Gandhar-Dehgam Loop in Loop out (LILO) at SUGEN commissioned by Torrent Power Grid Limited to facilitate power supply from SUGEN to Ahmedabad.

A summary of the financial results for the year under review is as under: (Rs. Crores)

Particulars For the Year For the Year ended on ended on 31st march, 2010 31st March, 2009

Total Income 5956.47 4465.40

Profit before Depreciation, 1836.17 923.34 interest and Tax

Depreciation 335.35 183.05

Interest 314.37 155.48

Profit Before Tax 1186.45 484.81

Current Tax 207.50 55.00

Deferred Tax 142.40 23.81

Fringe Benefit Tax - 0.91

(Excess)/Shortfall in provision for Taxation - (2.80) for earlier years

Profit After Tax 836.55 407.89

Add: Balance brought forward 229.12 132.78

Less: Statutory Appropriation 1.00 1.00

Balance available for 1064.67 539.67 appropriation

Appropriations

Transfer to General Reserve 400.00 200.00

Proposed Dividend 141.73 34.49

Dividend Distribution Tax 23.54 16.06

Balance carried to Balance 499.40 229.12 Sheet

Total 1064.67 539.67

The Board of Directors is pleased to recommend a dividend of 30% i.e. Rs. 3.00 per equity share (Previous Year 20% - Rs. 2.00 per equity share) on 47 24,48.308 equity shares of Rs. 10 each for the financial year 2009-10, amounting to Rs. 141.73 Crores. With Dividend Distribution Tax of Rs. 23.54 Crores. the total outflow on account of dividend works out to Rs. 165.27 Crores.

The Indian economy showed modest signs of recovery from Q2 of FY 2009-10 after the worst global financial and economic crisis in 60 years had marred the world economy in FY 2008-09. The driving force for the economic revival was the industrial sector comprising mining and manufacturing, which grew at around 10% in Q2 and Q3 of the FY 2009-10. India was amongst tne first few countries in the worid to implement a broad based counter-cyclic policy package asa response to the negative fall out of the global slowdown. It is expected that growth of GDP will be 7.2% in FY 2009-10 and around 9% in Q4 of FY 2009-10 in spite of the acute inflationary conditions. The GDP growth rate is estimated at 8.75% during the FY 2010-11 with the Reserve Bank of india taking appropriate measures for arresting the mounting inflationary pressures without affecting growth.

The Electricity sector also recovered from the lower growth in FY 2008-09. The year wise growth of electricity sector as compared to growth of GDP is depicted in the following graph, which shows a high co-relation between them.

Though the availability of power has increased in 11th Five Year Plan, the power sector continues to be afflicted by supply shortages. The country faced energy deficit of 10.10% (Previous Year 11 00%) and peak deficit of 13.30% (Previous Year 12.00%) in FY 2009-10. Not ali of Indias population has access to electricity; and for those who have access; reliability and quality are matters of great concern. The annual per capita consumption, at about 735 kWh (against world per capita consumption of 2,873 kWh) is amongst the lowest m the world. These problems emanate from inadequate power generation capacity, lack of optimum utilization of the existing generation capacity, inadequate inter- regional transmission links, inadequate and ageing sub-transmission and distribution network leading to power cuts and local failures/faults, higher T&D losses, large scale theft, skewed tariff structure, slow pace of rural electrification, inefficient use of electricity by the end consumer and lack of grid discipline.

The FY 2009-10 would also be remembered for many years as the year in which the power sector was re-rated handsomely. This was the result of many initiatives starting from the enactment of the Electricity Act, 2003 with forward looking provisions, introduction of open access, setting up of Regulatory Commissions at the Centre and States, modification of the provisions of Mega Power Policy, formulation of guidelines for Competitive Bidding of tariff, facilitation of trading of surplus/ merchant capacity and setting up of power exchanges. This has attracted many new players into the power sector. The Power Sector is at the cusp of very large growth in the years to come provided policies conducive to growth are continued.

The total generation capacity increased to 1,59,398 MVV as on 31il March, 2010 as compared to 1,47.965 MVV on 31bl March, 2009, an increase of merely 7,72%. The total energy available increased by 8.34% from 6,89,021 MUs in 2008-09 to 7.46,493 MUs in 2009-10. The most notable positive feature of FY 2009-10 has been the improved supply of gas to power plants for part of the year resulting In generation of 97 billion units as compared to 73 billion units last year (i.e. an increase of about 33%). Hydro projects suffered a decline of 8% In 2009-10, -mainly due to monsoon failure.

As against the targeted capacity addition of 78.700 MW in the 11th Five Year Plan, the generation capacity added was 22.301 MW (28.33%) in the first three years of the plan at an average addition of 7,434 MW per year. Though this capacity addition is low, it is better than the annual capacity

addition of 4,236 MW in the 10lh Five Year Plan period. The Private Sector participation which was less than 13% in the 10th Five Year Plan has increased to about 25% in the first three years of the 11th Five Year Plan period. To meet the increasing requirement, further private sector participation is being encouraged. In the Financial Budget 2010, the Government has accorded the highest priority to capacity addition in the power sector. The adoption of super critical technology in large capacity power plants, modified Mega Power Policy and more Ultra Mega Power Projects (UMPPs) will help in capacity addition. Power Finance Corporation (PFC) has been designated as the nodal agency by the Government of India for the development of UMPPs, each with a capacity of about 4,000 MW with the objective of adding large capacity power projects in India. Till date, four UMPPs have been awarded, PFC has issued a request for qualification (RFQ) for developing another 4,000 MW Sarguja UMPP in Chhattisgarh. Plans to bid out the proposed UMPPs in Tamil Nadu, Orissa and Andhra Pradesh are also underway.

Availability of fuel is important both for the higher utilization of existing plants and for speedy setting up of new capacities. Domestic coal availability continues to be an area of concern. Though linkages are granted for 80% to 85% of the capacity, supply is normally around 90% of such linkage. Though import of coal is allowed, improper planning at existing plants has resulted in 14,500 MUs of lost generation in FY 2009-10. The coal blocks which have been hitherto allocated have not effectively materialized. The Government of India is contemplating to introduce Competitive Bidding System for allotment of coal blocks. Additionally, the Government of India is in the process of setting up a Coal Regulatory Authority to regulate prices and facilitate growth of the coal sector. Some Indian power sector players have acquired mines abroad and many more are on the look out for the same. The doubling of capacity at Petronet LNG Limited, Dahej and the flow of the KG basin gas has not entirely met the gas requirement of power sector as the demand is large and also as imported RLNG is costlier.

During the year, Power Grid Corporation of India Limited (PGCIL) enhanced the capacity of the National Grid for inter-regional transmission of power by 2,300 MW. They added 4,866 ckt Kilometers of transmission lines during the year 2009-10 for regional transmission systems along with 5,240 MVA of transformation capacity.

Commensurate development of transmission systems is a must not only for evacuation of power from generation sources but also for smooth supply through sub-transmission and distribution infrastructure. Transmission constraints, though experienced, have been decreasing, and will further reduce when the transmission systems under development are completed. Consequent to the successful competitive bidding for UMPPs, high capacity transmission lines are also being bidded out. Plans are afoot for creation of high capacity "Transmission Highways" to address the constraints in Right of Way.

Other encouraging initiatives in FY 2009-10 include:

- Bestowing the responsibility for planning the power evacuation infrastructure for projects of 500 MW and above in Central Transmission Utility.

- Medium term Open Access Facility for a period of 1 to 3 years in the existing scenario of LTOA for 25 years and STOA of less than a year.

- Transmission tariff will be based on distance and direction instead of on postal basis as per recent draft regulation of CERC.

- Exemption of transmission charges from the levy of Service Tax.

- Constant review and revision of Ul charges taking into account the changing conditions in the power demand scenario.

The Power Distribution sector remains plagued by high distribution losses and low cost recovery thus needing significant reforms. The Gol has reformulated the Accelerated Power Development and Reforms Program (APDRP) with an aim to improve the distribution network and reduce AT&C losses to 15% by end of 11th Five Year Plan.

"Power saved is power generated". To meet this adage, there is an urgent need for several measures viz. allocation of more and more distribution circles to private players through franchisee model, prevention of theft, increasing consumer awareness, introduction of energy efficient equipments, demand side management and time of use charges.

The franchisee initiative, a public private partnership model has enabled private sector participation in this segment while continuing with government ownership. The success at Bhiwandi will motivate more states to adopt this model as this will reduce the AT&C losses as well as improve the efficiency in distribution. However, there should be a model Distribution Franchisee Agreement like model PPA in case of competitive bidding process, to make the bidding simple, uniform and faster. In this regard, Planning Commission and the Central Electricity Authority have initiated steps to develop the model Distribution Franchisee Agreement, which is a welcome step.

Another important development is that the developer of SEZ has been made a deemed licensee for power distribution in SEZ, which will enable expeditious creation of high quality power distribution infrastructure in SEZs.

India is largely dependant for its power generation on fossil fuels, which are not only scarce and costly but also pollute the environment. Renewable energy, an alternate source of power generation, is less pollutant but is beset with high cost and low PLF. There is a significant potential in India for generation of power from renewable energy sources - wind, small hydro, biomass and solar energy. Government has initiated various steps towards encouraging the development of renewable energy sources by providing fiscal and other benefits.

The year gone-by has witnessed great fillip in terms of policy measures:

- National Action Plan on Climate Change (NAPCC) stipulated that minimum renewable purchase standards may be set at 5% of the total power purchased in the year 2010 and thereafter be increased by 1% each year for 10 years. The new regulations are expected to promote new investments in this sector.

- During FY 2009-10, CERC determined generic tariff for the Renewable Energy sources such as wind, solar, small hydro, biomass and bagasse based cogeneration projects, considering Pre- Tax Return on Equity at 19% per annum for the first 10 years and 24% per annum from the 11th year onwards.

- Gol has conceived and put into effect the National Solar Mission for establishment of 20,000 MW of solar power facilities by 2022.

- Gol has introduced a generation based incentive for wind power generation.

- NLDC has notified regulation for issuance and trading of Renewable Energy Certificates.

Trading of power is recognized as a distinct license activity under the Electricity Act, 2003. Of the total quantum of power traded in India through different modes, approximately 17% is through Power Exchange and the remaining 83% is through bilateral agreements. Two power exchanges, namely

Indian Energy Exchange (IEX) and Power Exchange India (PXI) are operating successfully facilitating trade, distribution of market information, promotion of competition and creation of liquidity in a deregulated power market. The exchange trading is done through online satellite connected exchange that ensures transparency and price discovery.

IEX and PXI, which were hitherto offering day ahead voluntary participation contracts, launched term ahead contracts like weekly, daily, day ahead contingency and Intra-day contracts starting from 15th September, 2009.

Additionally, CERC has revised the trading margin to 7 paise per unit in case the sale price of electricity exceeds Rs. 3 per unit as against 4 paise per unit earlier.

With expected growth rate exceeding 8% over the next 10 years, it is estimated that the power demand would soar from 159 GW to more than 300 GW by that time. The key factors driving this demand will be the manufacturing sector, residential consumption, Power to All by 2012 and realization of suppressed demand. However, the following issues scourge the progress, which need to be appropriately addressed to match the growing demands:

Generally it takes 5 to 6 years to conceive and complete a power plant in our country as compared to 2 to 3 years in China and less than 4 years in other countries. Simple processes and expeditious approval for land acquisition would significantly reduce the gestation period.

BHEL the only indigenous supplier is overbooked and is unable to cope up with the increased requirements, which delay the implementation of the generation projects. However, new manufacturing facilities viz. collaboration of L&T with MHI, Bharat Forge with Alstom and JSW with Toshiba and further capacity addition at BHEL is expected to improve significantly the timely supply of critical and long gestation equipments.

Inadequate domestic supply of quality fuel viz. coal and gas results in higher electricity price due to volatility in fuel prices in the international market.

This shortage will affect the implementation and operation of the projects. More technicians are required and hence relevant institutions including ITI with adequate infrastructure and trainers need to be set up and upgraded on public-private partnership basis.

As per the report of 13lh Finance Commission, the loss (net of subsidies) which was Rs. 18,375 Crores in FY 2005-06 is expected to increase to Rs. 1,16,089 Crores in FY 2014-15. The key reason for such increase as per this report are mainly the inability of state utilities to enhance operating efficiencies, high cost of short term power and absence of timely tariff increase. The report goes on to state that regulatory institutions in general, lack sufficient capabilities (which is evident from the fact that even routine tariff increase have not taken place in the recent past) and need to be strengthened. The future of Power Sector is highly dependent on the effective functioning of State Regulators and such capacity building would be desirable.

The granting of open access based on merit and without discrimination and the independence of State Load Despatch Centres if ensured would provide for orderly and fast growth of power sector.

With forward looking policies and regulations from the Government and CERC, an encouraging environment has been created for investments in all parts of electricity supply chain i.e. generation, transmission and distribution. The continuing demand-supply gap, which is expected to continue for at least next ten years due to increased growth rates, provides attractive investment opportunities in all the areas of power sector.

There are significant opportunities in generation sector for coal based plants at pithead or at coastal locations and for gas based CCPPs at load centers or near gas transportation infrastructure. However, land acquisition, environmental clearances and fuel linkages are not easily available, leading to longer gestation period for the projects.

Power generation from alternate sources like hydel, nuclear and renewable sources remain untapped to a large extent. Hydel power potential of 1,50,000 MW is untapped as assessed by the Government of India. These sources need to be exploited fully so as to reduce dependence on fossil fuels and combat the effects of global warming.

Opportunities are also available in transmission and distribution sectors once privatization of distribution gathers further momentum. The Government has already invited competitive bids from private participants for certain EHV lines for commensurate development of transmission sector in tandem with generation.

The Company is an integrated utility having interests in power generation, transmission and distribution.

The Company fully commissioned its ambitious SUGEN Mega Power Project on 15th August, 2009, the 63rd Independence day of India. The power plant caters to the power needs of Ahmedabad, Gandhinagar and Surat to the extent of 800 MW. At least 100 MW is sold on inter state basis, the surplus being sold to others including on short term basis. During the year, SUGEN achieved PAF of 96.86% and PLF of 86.05% and dispatched 5,609 MUs. SUGEN being eligible for CER benefits under the CDM mechanism, has filed its first claim for CERs. During the year gas purchase agreement has been executed with Reliance Industries Limited for a major part of its gas requirements. CERC also determined the tariff for SUGEN generation for a period of 5 years commencing from FY 2009-10.

During the year from its 500 MW capacity, the Company achieved PAF of 95.81% and PLF of 93.44% and dispatched 3,785 MUs. The 100 MW Vatva plant signed gas purchase agreement with Reliance Industries Limited for its entire fuel requirement.

The sales were higher at 8,045 MUs as against 7,665 MUs during the previous year, registering a reasonable growth of 4.96%. The T&D loss was marginally higher at 7.62% as against 7.51% during the previous year. However, this T&D loss is one of the lowest in the country. The growth in demand shows an overall improvement in the economy of these regions. The consumer base for both the areas as on 31st March, 2010 was 20.14 lacs. The overall peak system demand for these distribution areas during FY 2009-10 was 1,503 MW, which increased by 4.74% as against 1,435 MW in the previous year.

The Company filed a petition seeking Tariff Fixation for Ahmedabad, Gandhinagar and Surat areas for three years commencing from FY 2008-09. The gap in the revenue requirement of the Company was substantially pruned down and it was granted an increase of 1.40% from 1st February, 2009 and 2.30% from 1st April, 2010 after a gap of seven continuous years without any tariff hike. GERC in its order has created a separate category of Below Poverty Line (BPL) consumers who have been offered subsidized tariff in accordance with the National Tariff Policy.

The sales were higher at 2,449 MUs as against 2,241 MUs during the previous year, registering an impressive growth of 9.28%. The T&D loss was marginally lower at 19.33% as against 19.46% during the previous year. The growth in demand is on account of an overall improvement in the textile market of the area. The consumer base as on 31s1 March, 2010 was 1.94 lacs. The peak system demand for this distribution area was 525 MW during FY 2009-10, which is marginally lower as against 540 MW in the previous year.

The Company has been awarded the distribution franchise for Agra and Kanpur distribution circles for a period of 20 years. It has commenced distribution operations at Agra from 1st April, 2010.

The highest growth of 8.53% was registered in commercial category, followed by 7.28% in LTP/LTMD category and 7.16% in residential category of consumers. However, in the HT category marginal growth of 1.61% was witnessed. Other sales include sales to external parties through bilateral contracts, Power Exchange, Unscheduled Interchange (Ul), etc.

The overall financial performance has improved substantially mainly on account of inclusion of financials of SUGEN operations effective from second quarter of the year. However, regulated distribution business comprising Ahmedabad and Surat distribution showed decline in profits due to nominal tariff rise of 1.40% vis-a-vis cost increase mainly on account of inflation, increasing yardsticks in normative parameters despite significant efficiency improvements including in T&D loss percentage, non-grossing up of tax in tariff determination and other factors. The depreciation and interest costs have also increased due to inclusion of financials of SUGEN operations, CAPEX at both Ahmedabad and Surat Distributions and change in the accounting method of depreciation. As a result the overall;

- PBDIT increased from Rs. 823.34 Crores to Rs.1,836.17 Crores

- Depreciation increased from Rs. 183.05 Crores to Rs. 335.35 Crores

- Interest increased from Rs. 155.48 Crores to Rs. 314.37 Crores

- PBT increased from Rs. 484.81 Crores to Rs. 1,186.45 Crores

- PAT increased from Rs. 407.89 Crores to Rs. 836.55 Crores

8. FUTURE GROWTH PLANS

The Company has ambitious growth plans to capitalize on the opportunities available in the ever growing power sector. The following projects are under consideration to enhance generation capacity of the Company:

The Company is considering addition of one more unit of 382.5 MW at SUGEN. The EPC contract is on the verge of being finalized. Process for obtaining environment clearance from the Ministry of Environment and Forest (MoEF) for the same is underway.

The growth plans also include projects currently under execution, through its subsidiaries, whose details are discussed in Para 14 of this report.

9. FINANCE

During the year, the Company raised long-term loans from various Financial Institutions and Banks to the tune of Rs. 387 Crores. The term loans including working capital loans and APDRP loans outstanding as on 31st March, 2010 were Rs. 3,191 Crores (Previous Year Rs. 3,252 Crores). During the year 2009-10, an amount of Rs. 307 Crores (Previous Year Rs. 161 Crores) has been drawn for SUGEN and Rs. 80 Crores for ongoing CAPEX (Previous Year Rs. 810 Crores). The Company has repaid an amount of Rs. 448 Crores (Previous Year Rs. 256 Crores) towards term loans including loan under APDRP. The Companys long-term debt paper and cash credit / overdraft facilities are rated AA/Stable by CRISIL Limited. This indicates high degree of safety with regard to timely payment of financial obligations. For letters of credit / bank guarantees, the Company is rated P1 + indicating high degree of safety regarding timely payment of the instrument.

10. RISKS AND CINCERNS OF THE COMPANY

The Risk Management Policy of the Company addresses all potential risks including Legal Risks (tariff regulation, environmental regulation, statutory changes), Fuel Risks (availability and pricing), Consumer Risks (revenue realization, transmission risks), Asset Risks (natural calamity etc.), Human Resource Risks and IT Risks.

GERC has notified Multi Year Tariff Regulations. It has specified various operating norms and prescribed controllable and non-controllable expenses. The Companys Tariff Petition for 2008-09 to 2010-11 filed pursuant to these Regulations was considered by GERC and consequently the revenue requirement has been reduced substantially. While the Company has put in all the efforts for efficiently carrying out its operations, it is not getting due recognition and incentives for its most efficient operations, rather such efficiency has continuously become its hurdle rate. The situation of 1-2% tariff increase after no tariff increase for a long period of 7 years if continued would affect the quality and efficiency of the Companys distribution operations. Thus, tariff determination remains an area of concern for the Company.

The Company faces the risk of availability of power to its distribution units. Up till now, the Company was sourcing its balance power requirements through purchase from GUVNL. GUVNL has unilaterally discontinued the power supply from 1st August, 2009. The Company had to purchase additional power requirement on short term basis at a high cost due to such abrupt cancellation. However, the Company is exploring various alternatives to procure power at competitive rates.

Possible increase in captive power capacity by its consumers affects the Companys revenue. However, the strong and established distribution network with a track record of uninterrupted power supply makes the Company well equipped to meet this challenge/

The Company also bears the risk of adequate availability of technical personnel, which it proposes to overcome through proactive recruitment and training.

11. INTERNAL CONTROL SYSTEMS

The Company has in place Internal Control Systems commensurate with its size and scale of operations. The Company has appointed a reputed firm of Chartered Accountants to carry out Assurance Audit. It ensures adherence to the policies and systems and mitigation of the operational risks perceived in respect of major and important risk areas. Besides the Company has an internal audit function, which conducts routine audit of activities. The audit process also includes review and evaluation of effectiveness of the existing processes, controls and compliances. Significant observations including recommendations for improvement of the business processes are reported to the Audit Committee. The same are being reviewed by the Audit Committee along with the status of implementation of the agreed action plans.

12. INFORMATION TECHNOLOGY

The Company is in the process of implementing SAP (ERP) software covering majof areas like generation, distribution, materials, finance and human resources, for enhancing service levels to its consumers, suppliers, employees and other stakeholders. ERP implementation is expected to lead to better system integrity and process reliability thereby improving business decision making.

13. HUMAN RESOURCES

During the year under review, the Company amicably entered into wage settlement agreement with the employees union at Ahmedabad for a period of four years upto 31st March, 2013. Apart from revision of pay scales, allowances and benefits, the agreement aims at enhancing productivity across all business segments.

Development initiatives pertaining to consumer orientation, self and organizational development, team building, managerial effectiveness, training and upgradation of technical skills, etc. are continuously undertaken by the Company for improving the value of and contribution by its human asset. The Company also makes focused efforts for increasing productivity and overall improvement in the quality of work of the employees by redefining the business processes. Staff strength as on 31st March, 2010 was 6,888.

14. SUBSIDIARIES

The Company has four subsidiary companies namely, Torrent Power Grid Limited, Torrent Energy Limited, Torrent Pipavav Generation Limited and Torrent Power Bhiwandi Limited.

A. Torrent Power Grid Limited:

Torrent Power Grid Limited (TPGL), a joint venture with PGCIL is setting up transmission system for evacuation of power from SUGEN. The first phase of Gandhar-Vapi LILO was successfully commissioned last year and is being used for transmission of power from SUGEN to Ahmedabad. The second phase of Gandhar-Dehgam LILO was commissioned in March 2010. The third phase of the project being extension of the line of second phase to Pirana PGCIL sub-station with LILO at TPL Pirana sub-station is expected to be completed by July 2010. The Company has already filed a petition with CERC for tariff determination for the first phase. During FY 2009-10, TPGL generated revenue of Rs. 2.98 Crores and made profit after tax of Rs. 0.98 Crore.

B. Torrent Energy Limited:

Torrent Energy Limited (TEL) is implementing the gas based DGEN Mega Power Project at Dahej SEZ. It proposes to establish 3 units of approximately 400 MW each. It has commenced non-EPC work to make the site ready for construction of the plant. EPC workis expected to commence shortly upon finalization. TEL after obtaining its distribution license has commenced the distribution activities with effect from 4th April, 2010.

C. Torrent pipavav Generation Limited

Torrent Pipavav Generation Limited is setting up the 1000+ MW coal-based power project in Pipavav in Amreli District of Gujarat. The Company has signed the Shareholders Agreement with Gujarat Power Corporation Limited (GPCL), a Government of Gujarat undertaking, for implementation of the project. Torrent Pipavav has started the process of acquiring land for the project from GPCL and has also initiated other project related activities. Baitarni Coal block in Orissa is allocated for this project.

D. Torrent Power Bhiwandi Limited

Torrent Power Bhiwandi Limited has been formed with an objective of providing peripheral services in relation to distribution business of Torrent Power Limited. The activities carried out by the company are now being carried out by Torrent Power Limited itself.

The Company accords the highest priority to Environment, Health and Safety. SUGEN Mega Power Project has been certified to be in compliance with ISO 14001 and OHSAS 18001 standards. Over 43% of the plant area is under green cover as against the statutory requirement of 33%. The NOx emission level at less than 25 ppm at SUGEN (against the Indian Standard of 50 ppm) meets the stringent Euro Standards.

The pipeline carrying slurry ash to the ash ponds of Sabarmati Thermal Station had suffered high wear and tear and posed potential risk to the residential areas through which it was passing. A new pipeline was, therefore, constructed to re-route the same away from the sensitive locations.

The Company at its various units celebrates annual safety days and conducts safety training on a continuous basis.

The Company generally endeavors to embrace the latest and most environmentally efficient power generation technology in its power projects. SUGEN generation plant recognized as eligible for CERs under clean development mechanism of UNFCCC, is an apt example.

Besides the Company has plans to foray into wind based power generation and is in the process of setting up a 50 MW project in Gujarat.

16. CORPORATE SOCIAL RESPONSIBILITY

The Company is conscious about its social obligations and has been contributing to various activities mainly in the areas in which it is involved.

Under its program "SPARSH", the Company reaches the needy groups in certain locations of Ahmedabad, Surat and Bhiwandi and makes a positive difference in the quality of their lives in the areas of health, education, public awareness and community development.

To make available better Cardiac care to the people mainly in the Gujarat state, the Company has contributed Rs. 6 Crores in FY 2009-10 and cumulatively Rs. 11 Crores to U. N. Mehta Institute of Cardiology and Research Center (UNMICRC), which is utilizing these funds along with Government grants to expand and upgrade its infrastructure to 450 bed capacity. Further, with the active involvement of dedicated manpower of Torrent in project co-ordination and supervision, this expansion and modernization project is on the verge of completion. Additionally, the Patient Care Initiative Program at UNMICRC has resulted in effective service delivery and better hospital management, in which Torrent Group volunteers are also involved.

17. DIRECTORS

Shri K. Sridhar, Shri Kiran Karnik and Shri Keki M. Mistry were appointed as Additional Directors during the year under review. They hold office upto the commencement of ensuing Annual General Meeting. Shri S. B. Kunwar, Shri S. Jagadeesan, IAS, Shri T. Sankaralingam and Shri P. S. Shenoy have resigned from the Board since the last Annual General Meeting. The Board places on record its appreciation for the valuable services rendered by them during their tenure as Directors of the Company.

Shri Samir Mehta and Shri Pankaj Patel retire by rotation and being eligible, they have offered themselves for re-appointment.

For your perusal, a brief resume of the Directors being appointed / re-appointed and other relevant details are given in the Explanatory Statement to the Notice convening the Annual General Meeting. The Board of Directors recommends their appointment / re-appointment.

18. CORPORATE GOVERNANCE

The governance philosophy of the Company rests on five basic principles viz. protection of rights and interests of shareholders, equality in treatment of all shareholders, disclosure of timely and accurate information, strategic guidance and effective monitoring by the Board and accountability of the Board to the Company and its shareholders.

This report deals with the matters stipulated for the Management Discussion and Analysis Report. A report on Corporate Governance also forms part of the Annual Report. Certificate of the Auditors regarding compliance with the Corporate Governance code is also attached to this Annual Report.

19. AUDITORS

M/s. C. C. Chokshi & Co., Chartered Accountants, Statutory Auditors retire at the ensuing Annual General Meeting. They have expressed their unwillingness to be re-appointed as the Statutory Auditors of the Company. M/s. C. C. Chokshi & Co. is a part of Network of firms of Chartered Accountants registered with the Institute of Chartered Accountants of India (ICAI) under the Rules of Network issued by the ICAI. Deloitte Haskins & Sells, Ahmedabad is also a part of the Network. It is proposed to appoint Deloitte Haskins & Sells, Ahmedabad as the Statutory Auditors, who have furnished a certificate regarding their eligibility for appointment as Statutory Auditors of the Company, pursuant to Section 224(1 B) of the Companies Act, 1956.

Observations made in the Auditors Report are self-explanatory and therefore, do not call for any further comments.

20. DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, in relation to the financial statements for the year 2009-10, the Board of Directors states that:

1. In preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2010 and of the profit for the year ended on 31st March, 2010;

3. The Directors have taken proper and sufficient care for 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; and

4. The financial statements have been prepared on a going concern basis.

21. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The details relating to technology absorption, foreign exchange earnings and outgo required to be disclosed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure to and forms part of this report.

22. PARTICULARS OF EMPLOYEES

The information required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, forms part of this report. As per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report is being sent to all the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining the particulars may obtain it by writing to the Company Secretary of the Company.

23. APPRECIATION AND ACKNOWLEDGEMENTS

The Directors are pleased to place on record their appreciation for the continued guidance and support received from the Central Government, Government of Gujarat, Government of Maharashtra, Government of Uttar Pradesh, Central Electricity Regulatory Commission, Gujarat Electricity Regulatory Commission, Maharashtra Electricity Regulatory Commission, Uttar Pradesh Electricity Regulatory Commission, Western Region Power Committee, National Load Dispatch Centre, Regional Load Dispatch Center, State Load Dispatch Centre, Gujarat Urja Vikas Nigam Limited, Gujarat Energy Transmission Corporation Limited, Maharashtra State Electricity Distribution Company Limited, Maharashtra State Electricity Transmission Company Limited, Power Grid Corporation of India Limited, Gujarat Power Corporation Limited, Uttar Pradesh Power Corporation Limited, Dakshinanchal Vidyut Vitran Nigam Limited, Dakshin Gujarat Vij Company Limited, Uttar Gujarat Vij Company Limited, Gas Suppliers and Transporters including Reliance Industries Limited, Indian Oil Corporation Limited, GAIL (India) Limited, Reliance Gas Transportation Infrastructure Limited and Gujarat State Petronet Limited, Coal Suppliers including South Eastern Coalfields Limited, Financial Institutions and Banks. The Board recognizes the contribution of the esteemed consumers in the growth of the Company and takes this opportunity to pledge the Companys commitment to serve them better. The Board would also like to express great appreciation for the commitment and contribution of its employees at all levels. Last but not least, the Company thanks its shareholders for their unstinted support,

For and on behalf of the Board of Directors

Ahmedabad Sudhir Mehta 7th May, 2010 Chairman

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