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Directors Report of Torrent Power Ltd.

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-à-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 – 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 – 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 ~ € 3.77 per CER in March 2012 to ~ € 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, 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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