01. Torrent Power Limited - Annaul Report 2007-08

7/30/2019 01. Torrent Power Limited - Annaul Report 2007-08

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H appiness fo r a ll ; a sim p le p h i losop hy

that co nt inues to insp i re us year o n year.

Som eth ing tha t m akes fo r u s,

t he b usi ness o f pow er gene ra t i on

and d i st r i bu t i on m or e t han j ust t h at .

A t To r ren t i t 's no t j ust abou t

add i ng ano t he r p ow er gene ra t ion p l an t

o r sp r e a d in g o u r d i st r i b u t io n n e t w o r k t o s o m e m o r e t e r r i t o r i e s,

i t 's about be ing ab le to b r igh ten m or e l ives.

I t 's no t abo ut be ing ab le to ach ieve

ju st im p r essive fi nan c ia ls

bu t t h r ough t hem b r i ng sm i les

t o t he em p l oy ees and sha reho l de r s

w ho p lace t ru st in us . I t 's t h i s sense o f ach ievem ent

t ha t g row s and i l lum i nat es ou r pa t h

t o a b r i gh t e r f u t u re ; a f u t u re t h at b r i ngs

happ iness for a ll .


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A n n u a l R e p o r t 2 0 0 7 - 2 0 0 8

C O RPO RA T E IN FO RM A T IO N

Directors Su d h ir M e h t a C h air m an

S. K . Baru a

S. B . K unw ar

Sam i r M e h t a

Pankaj Patel

P. S. She no y

M ar k an d B h at t W h o le - t im e D ir ec t o r

M ur l i Ran gan at h an W ho le - t im e D ir ec t o r

Audit Committ ee P. S. Sh en o y C h air m an

S. K . Baru a

S. B . K unw ar

Pankaj Patel

Shareholders' / Investors' Pan k aj Pat e l C h air m an

Grievance Commit tee M a r k a n d B h a t t

S a m i r M e h t a

Commit t ee of Directors Sam ir M eh t a C h air m an

M a r k a n d B h a t t

M u r l i R angana than

Company Secretary Rajiv Shah

Auditors C . C . C h o k sh i & C o . C h ar t e r e d A cco u n t an t s

Registered Office To r r e n t H o u s e , O f f A s h r a m Ro a d , A h m e d a b ad 3 8 0 0 0 9

Te l e p h o n e : 2 6 5 8 5 0 9 0 , 2 6 5 8 3 0 6 0 F ax : 2 6 5 8 2 3 2 6

Plants Sa b ar m a t i, A h m e d a b ad 3 8 0 0 0 5

V atva G as P ow er Sta t i on , V atva , A h m edabad 3824 45

SU G E N C C P P, Su ra t 3941 15

Website w w w . t o r r e n t p o w e r . c o m

Registr ar and Sharep r o Se rv i ces ( I nd ia) P r i va te L im i ted

Share Transfer Agent Satam Indust r ia l Es ta te

C a rd ina l G rac ious Road

C haka la, A nd he r i (E ast )

M u m b a i 4 0 0 0 9 9

Te l e p h o n e : 0 2 2 6 7 7 2 0 3 0 0 , 6 7 7 2 0 3 4 5 , 6 7 7 2 0 3 7 2F ax : 0 2 2 2 8 3 7 5 6 4 6

E m a il : sh a r e p r o @ sh a r e p r o se r v i c e s. c o m

(as on 31 st M ay, 2008)


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D IRECT O RS' REPO RT

0 3

D ear Shareho lders ,

Your d i r ec to r s have p leasu re i n p resen t i ng t he 4 th A nnua l Repo r t o f t he C om pany toge the r w i t h t heA ud i t ed A ccoun ts fo r t he year ended on 31s t M a rch , 2008 .

T he key h igh l igh ts o f the o pera t i ons fo r the f i nanc ia l yea r 2007-08 :

A l l r o u n d i m p r o v e m e n t i n t h e p e r f o r m a n ce o f t h e C o m p a ny i ll u st r a te d b y :

Incr ease in tu r no ver by 3 0 .3 4 %

Incr ease in PB D IT by 3 6 .3 0 %

Incr ease in PAT b y 4 7 .1 9 %

Fur the r r educ t i on i n T& D losses i n Ahm edabad , Gandh inagar and Sura t d i s t r i bu t i on c i rc l e to 8 .75% - l ow est i n thecoun t ry .

O pera t i ons i n Bh iw and i D i st r i bu t i on Fr anch ise area s tab i li sed .

C o m m i ssi o n in g o f 1 1 4 7 .5 M W SU G E N p r o j e c t , t h o u g h d e lay e d d u e t o r e a so n s b e y o n d c o n t r o l , e x p e c te d t oc o m m e n c e g en e r a t io n i n 2 0 0 8 - 0 9 .

S U G E N p r o j e c t ap p r o v e d f o r C l e an D e v e l o p m e n t M e c h an i sm ( C D M ) B en e f it s b y U N FC C C .

A sum m ary o f the f i nanc ia l resu l ts fo r t he yea r under rev iew i s as under :

(Rs. Cr or es)

For the year Fo r t h e s ix m o n th sPart icu lars ended on e n d e d o n

31st March, 2008 31s t M arch , 2007

To ta l Incom e 3722.00 1446 .35

Gr oss Pro f i t be fo r e D eprec ia t i on , In te res t and Tax 584.29 214 .34

D e p r e c i a t i o n 147.94 65 .22

In te res t 59.78 19 .43

Pro f i t be fo r e Tax 376.57 129 .69

C u r r e n t Tax 79.77 16 .77

D e fe r r e d Tax 61.22 40 .60

Fr inge Benef i t Tax 1.06 0 .54

Shor t fa ll i n p ro v i sion fo r Taxat i on fo r ea r l ie r yea rs 23.28 0 .02

Profit Aft er Tax 211.24 71 .76

Ba lance b ro ugh t fo r w ard 127.87 82 .73Balance Available for appropriat ion 339.11 154 .49

Appropriations

Transfer to General Reserve 140.00 5 .07

In t e r im D iv id end - 18 .9 0

Proposed D iv idend 56.69 -

D i v idend D is t r i bu t i on Tax 9.64 2 .65

Balance carr ied to Balance Sheet 132.78 127 .87

339.11 154 .49

1. Highlights

2. Financial Result s, Accounts and Dividend


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D ata f o r t he cu r ren t accoun t i ng year i s no t com pa rab le w i t h t he da ta fo r t he ea r l ie r pe r i od as t he cu r r en t

accoun t i ng pe r i od i s fo r t he f u l l yea r w h i le t he p r ev ious accoun t i ng pe r i od w as fo r 6 m on ths . D u r i ng t he

cur r en t year , the f inanc ia ls inc lude imp act o f Bh iw and i oper a t ions fo r t he fu l l year in com par ison w i th i ts

imp act b e ing re fl ec ted i n t he f i nanc ial s o f t he p r ev ious pe r i od f o r a pa r t o f t he p e r i od .

The B o a rd o f D i r ec to r s i s p l eased to r ecom m end a d iv i dend @ 12% i .e . Rs. 1 .20 pe r equ i t y share on

47,24,48,308 eq u i ty shares o f Rs. 10 each fo r the f inanc ial year 20 07-08 , am ount ing to Rs. 56 .69 C ro res .

W i th D i v idend D i st r i bu t i on Tax o f Rs. 9 .64 C ro r es, t he t o ta l ou t f low on accoun t o f d i v idend w o r ks ou t t o

Rs. 66 .33 Cr or es .

The sales f o r A hm edabad and Su ra t have i nc reased f r om 3325 M U s (6 m on ths ) t o 7510 M U s (12 m on ths )

reg iste r ing a hea l thy grow th o f 12 .94 % over the p rev iou s f inanc ia l per iod o n an annua l ised bas is .

Sim ul taneous ly, the num ber o f consumer s a lso increased fro m 20.19 lacs to 20 .87 lacs. T h is g row th is due

to hea l t hy econom ic gro w th , r educ t i on i n T & D losses and con t i nued focus on Slum E lec t r i f icat i on unde r

w h i ch 16797 new connec t i ons w e r e re l eased du r i ng t he yea r. The susta ined and concen t ra ted e f f o r t s i n

the f t r educ t ion , e f fi c ien t b i ll ing system , slum e lec t r i f i cat ion and s t rengthen ing o f the d ist r ibu t ion net w or k

led t o f u r t he r r educ t i on i n T & D losses w h i ch a re now l ow est i n t he coun t r y . The system dem and fo r

t hese areas i nc reased to 1 408 M W w h ich w as m e t t h r ough the C om pany 's ow n gene rat i on as w e l l as

i m p o r t o f p o w e r.

T he genera t i on p lan t o f t he C om pany con t i nued to pe r fo r m i n an exce l len t m anner r eg iste r i ng t he PA F

and PLF o f 95 .33% and 90 .59% respec t ive ly.T he avai lab i l i t y o f gas fo r Vatva p lan t and pr ice there of has beco m e an issue o f co ncern . D ur ing the year

unde r r ep o r t , t he C om pany cou ld ge t on l y 78% o f i t s r equ i r em en t . The p r i ce al so w en t up subs tan t i al ly

resu lt i ng in to t he l evy o f h i ghe r Fue l P r i ce and P ow er P u rchase A d justm en t C ha rge o n t he consumers .

T he p r i ce has gone up f u r t he r and w i ll have impac t on t he FP P PA and the w o rk ing o f 2008 -09 .

C on t i nu ing t he p ro cess o f s t r eng then ing t he d i st r i bu t i on ne tw o rk , t he C o m pany added 321 D i st r i bu t i on

Transfo rm ers o f 11 kV a t A hm edabad , G andh inagar and S u rat . T he C om pany al so co m m issioned the f ir s t

phase o f 220 kV Transm iss ion L ines pro jec t a t Sura t w h ich w i l l he lp Sura t D ist r ibu t ion area to rece ive

p o w e r fr o m SU G E N p r o j ec t .

The Company demonst ra ted i ts ab i l i t y to e f f i c ien t ly manage the d is t r ibu t ion bus iness by s tab i l i s ing theope r a t ions o f B h iw and i area i n M aharash t ra w he re t he C om pany has been appo in ted as a D i st r i bu t i on

Franch ise . The sales in Bh iw and i area amo unted to 1 908 M U s dur ing the f inanc ial year to about 1 .6 lac

consumers .

T he system peak demand fo r B h iw and i d i st r i bu t i on a rea w as 571 M W w h ich w as m e t t h ro ugh pu rchase

o f 2620 M U s f r om M aharash t ra Sta te Elect r i c i t y D i s t r i bu t i on C o m pany L im i ted . H ow eve r, it m ust be

no ted t ha t t h i s system peak dem and is a r est r i c t ed dem and due to l oad shedd ing o f aro und 200 M W w h ich

i s i n e f fec t r o und the c l ock a t B h iw and i.

3. Dividend

4. Operations

Ahmedabad Generation and Ahmedabad and Surat Dist r ibut ion

Bhiwandi Distribution


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T he C o m pany pu t i n concen t ra ted e f fo r t s t o upg rade and s t r eng then the ne tw o rk i n t he a rea as w e l l as

imp rove the m e te r i ng and b i l l ing e f fi c iency (a) t o se rve t he consumers o f t he B h iw and i ci r c l e be t t e r ( b ) t o

m ake the netw o rk r ob ust and ( c) t o b r i ng dow n the A T& C losses. The C o m pany has enhanced the

d i st r i bu t i on t r ansfo rm a t ion capac i t y by mo r e t han 100 MV A b y pu t t i ng in 889 new 22 kV D i st r i bu t i on

t r ansfor m ers as w e l l as by increas ing the capac i ty o f the ex is t ing t ransfor m ers , 31km s. o f 22 kV over head

l ines and 65 k m s. o f unde rg round feede rs w e r e a lso added du r i ng t he yea r. M o r e t han 92 ,000 m e te rs w e re

rep laced a t t he custom er p r em ises du r i ng t he pe r i od .

Th e p res t ig ious SU G E N M ega Pow er P ro jec t o f 1147 .5 M W capac it y i s be ing imp lemen ted t o secu re l ong

te rm re l i ab le sou r ce o f supp l y f o r t he d i s t r i bu t i on bus iness o f t he C om pany. U n fo r tuna te l y, t he E PC

Cont rac tor , S iemens, is lagg ing beh ind in the progress o f the pro jec t and there is a de lay in the

com m ission ing o f t he sam e . I t i s now expec ted t ha t i t w i ll com m ence gene ra t i on du r i ng t he f i nanc ial year

2008 -09 . A n am oun t o f Rs. 2537 C r o res has been spen t on t he p ro ject ou t o f w h i ch R s. 1707 C r o res have

been f inanced by Term Loans. T he Co m pany has t ied-up i t s en t i re r equ i rem ent fo r t he gas . I t has a lso

enter ed in to a Gas Transpor ta t ion A greem ent and thus , has m ade an ar rangem ent fo r b r ing ing gas to t he

s ite . H ow ever , w i th the increase in the c ru de o i l p r ices and gas s itua t ion a t dom est ic and in te r nat iona l

leve l , the pr ice o f th e gas rem ains vo la t i le and uncer ta in .

The C om pany is happy t o i n fo rm tha t as a r esu l t o f cons ide rab le e ff o r t s , SU G E N p ro jec t has been

app roved fo r C lean D eve lopm en t M echan i sm (C D M ) bene fi t s. C onsequen t l y, SU G E N p lan t w i ll be

e l ig ib l e t o ea rn C a rbon C r ed i t s (C E R s) once the gene ra t i on com m ences. I t i s hear ten ing t o no t e t hat

t h e m e t h o d o l o gy p r o p o s e d fo r C D M b y t h e C o m p an y h as b e e n ac c ep t e d b y U N F C C C f o r e v al u at i o n o f

gas based p ow er genera t i on p r o jec t s in f u tu r e .

The subsid i ar y o f t he C om pany, To r ren t P ow er G r i d L im i ted (TP G L) - a Jo in t V en tu re w i t h Pow er G r i d

C o rpo ra t i on o f I nd ia L im i ted (P G C IL ) - has com p le ted t he f ir s t phase o f evacuat i on a r rangem en t by

cons t ruc t i on o f 26 km s. G andha r -V ap i L ILO . T he w o rk f o r 400 kV D oub le C i r cu i t Transm ission li ne f r om

SU GEN to P i rana (Ahm edabad) is in p ro gress. The C om pany a lso has insta l led t r ansm iss ion l ines to

c o n n e ct SU G E N p l an t w i t h K i m s u b - st a t io n o f G E T C O . T h r e e 2 2 0 k V D o u b l e C i r c u it l i ne s f r o m SU G E N

to Sura t and tw o 220 k V rece iv ing sub-s ta t ions are co m ple te and energ ised to t ake care o f t ransmission o f

p o w e r t o m e e t Su r at r e q u i r e m e n t .

T he Co m pany has cont inued i ts s t ress on beco m ing consum er cent r ic o r gan isa t ion . To th is end, the

Company has taken var ious s teps to improve the cus tomers ' serv ices by rev is ing var ious sys tems and

p ro cesses. I t has i n t r oduced m any new featu res t o ca te r t he req u i rem en t o f consumer s and respond t o

the consumer s qu ick l y and i n a be t t e r w ay. The C om pany has estab l ished be t t e r pe r fo rm ance than the

standards o f pe r fo r m ance p r esc r i bed b y G u jara t E lec t r i c it y R egu la to r y C o m m ission .

5. A Mega St rategic Initiative - 1147.5 MW SUGEN Power Project

Evacuation arrangement for SUGEN project

6. Consumers' satisfaction

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7. New Generation Projects

A. SUGEN Expansion

B. Dahej

C. Pipavav

D. Morga

8. Human Resources & Industr ial Relat ions

T he C om pany has a l ong - te rm st ra teg ic g row th p lan , in o r de r t o enab le it t o cap i t al ise on oppo r tun i t i e s.

T he C om pany i s cu r ren t l y pu r su ing deve lopm en t o f seve ra l p ro jec t s f o r ach ieving gro w th . T hese a re :

T he C om pany is p lann ing to incr ease i ts p r o jec t capac ity by add i t ion a l 3000 M W. SU GEN I I and

SU G E N I II bo th w i ll add 1500 M W in each phase a t SU G E N si t e . Land ad jacen t t o SU G E N p ro ject has

been ident i f ied and acqu is it ion p ro cess fo r t he same has com m enced.

T he C om pany has been nam ed as co -deve lope r f o r D ahej SE Z nea r B ha ruch i n G u jara t s tate and i s

au tho r i sed t o pu t up gene ra t i on p ro jec t up to 1500 MW. The C ompany i s p l ann ing t o se t up

app rox im a te ly 400 M W gas based com b ined cyc le pow er p l an t i n t he f ir s t phase th ro ugh a new

Spec ia l Purp ose Veh ic le , Tor ren t Energy L im i ted . T he C ont our survey & G eo-Techn ica l invest igat ion

fo r t he p ro jec t has been com p le ted . Fu r the r, b i ds have been i nv i t ed unde r i n te rna t iona l com pe t i t i ve

b idd ing p rocess f o r aw a rd ing E PC con t r act .

T he C o m pany is p l ann ing t o se t up a 2000+ M W coa l based the rm a l pow er p ro jec t in P ipavav i n

Am re l i D ist r ic t o f Gu jara t . Tor ren t P ipavav Gen era t ion L im i ted has been incor po ra ted as a subsid iary

o f t he C om pany fo r deve lopm en t o f t he p ro jec t . Land fo r t he p r o jec t i s unde r p ossession o f G u jara t

P ow er C o r po r a t ion L im i ted w h i ch w i ll be t r ansfe r red t o t he C o m pany. Fue l w i l l be supp l i ed fr om

Bai tarn i C oa l B lock in Ta lchar C oa l F ie ld , O r issa .

T h e C o m p an y 's b id t o su p p l y p o w e r t o G M D C o n t h e b a si s o f c o al t o b e s u p p li ed b y G M D C f r o m

M or ga- I I C oa l B lock , Ch hat t isgarh has been accepted. T he Co m pany is p lann ing to se t up 1 ,000+

M W c o al b ase d t h e r m al p o w e r p r o j ec t i n C h h a t t isg ar h f o r t h i s p u r p o s e. A M e m o r a n d u m o fU nde rs tand ing (MO U ) has been s igned w i t h t he C hha t t i sgarh gove rnm en t and C hha t t i sgarh S tate

E lec t r i c i t y B oard f o r deve lopm en t o f t he p ro jec t .

D u r i ng t he f i nanc ial year 200 7 -08 , t he C om pany am icab l y en te red i n to a w age set t l em en t agreem en t

w i t h i t s em p loyees un ion a t Su ra t f o r a t h ree yea r pe r i od up t o 31s t D ecemb er, 2009 . The set t l em en t no t

on ly add re ssed t he issues l ike r evis ion of pay scales, a l low ances, ben ef i ts, changes in service con dit ions

etc . , bu t i t a lso he lped the C om pany to r eso lve o t her lon g outs tand ing issues.

Th e C o m pany al so en te red i n to a se t t l em en t agreem en t w i t h t he em p loyees un ion t o end 10 i ndus t r i ald isputes invo lv ing cont rac t labo urer s , appren t ices , to w nsh ip counc i l em ployees, voucher ca tegory

em ployees and f ly ash d iv ision em ployees.


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9. Subsidiaries

10.Directors

11.Corpor ate Governance

12.Auditors

13. Dir ectors' Responsibili ty Statement

T he C o m pany has tw o subsid ia r y com pan ies name ly ; To r ren t P ow er G r i d L im i ted and To r r en t P ipavav

G ene ra t i on L im i ted . S ta temen t g i v i ng de ta i l s p resc r i bed by t he Min i s t r y o f C o rpo ra te A f f a i r s unde r

Sec t i on 212 o f t he C om pan ies A c t , 1956 fo r m s pa r t o f t he A nnua l R epo r t .

Shr i S. K . Barua w as appo in t ed as an Indep endent D i rec to r o n the Bo ard e f fec t ive f rom 29t h January , 2008,

in the casual vacancy caused by t he r es ignat ion o f D r . Baku l H . D ho lak ia . Sm t . V. L . Josh i , IA S res igned f r om

the B o a rd e f f ect i ve f r om 15 th A p r i l , 2008 . The B o a rd p laces on reco r d i t s app rec ia t ion f o r t he va luab le

serv ices rend ered by D r . Baku l H . D ho lak ia and Smt . V. L . Josh i , IA S dur ing the i r tenu re as D i rec to rs o f the

C o m p a n y .

Shr i Samir M ehta and Shr i S. B . Kunw ar re t i re by ro ta t ion a t the ensu ing Ann ua l Gene ra l M eet ing . Be ing

e l ig ib l e , t hey have o f f e red t hem se l ves f o r r e -appo in tm en t .

Fo r p e rusal o f t he sha reho lde rs, a b r i e f r esum e o f t he D i rec to r s be ing re -appo in ted , natu re o f t he i rexper t ise , the i r shareho ld ing in the Company and o ther re levant de ta i ls a re g iven in the exp lanatory

st a t em e n t t o t h e N o t i c e. T h e B o a r d o f D i r e ct o r s r e c o m m e n d s t h e ir r e - a p p o i nt m e n t .

The governance ph i losophy o f the Company res ts on f ive bas ic p r inc ip les v iz . p ro tec t ion o f r igh ts and

in teres t o f shareho lders , equa l i ty in t rea tment o f a l l shareho lders , d isc losure o f t ime ly and accura te

in form at ion , st r a teg ic gu idance and e f fec t ive mo n i to r ing by the Board and account ab i li t y o f the Board t o

the C om pany and i t s sha reho lde rs.

A M anagemen t D i scussion and A na l ysi s Repo r t f o rm s pa r t o f t h i s r epo r t . A r epo r t on C o rp o r a teGo vernance is a lso inc luded as a par t o f the annua l rep or t . Ce r t i f ica te o f the Au d i to rs regard ing com pl iance

w i th t he C o rp o ra te G ove rnance code i s a lso a t t ached to t h i s annual r epo r t .

M /s. C . C . C ho ksh i & C o . , C ha r te red A ccoun tan ts, Sta tu to r y A ud i t o r s r e t i r e a t t he ensu ing annua l genera l

m eet ing and are e l igib le fo r re - appo in t m ent . T hey have fu rn ished a cer t i f i cate r egard ing the i r e l ig ib i li t y fo r

re -appo in tm en t as t he Sta tu to r y A ud i t o r s o f t he C om pany, pu rsuan t t o Sec t i on 224 (1B ) o f t he C o m pan ies

A c t , 1956 .

The obse rvat i ons m ade i n t he A ud i t o r s ' Repo r t a re se lf - exp lana to r y and , t he re fo r e , do no t cal l fo r any

f u r t h e r co m m e n t s.

I n t e rm s o f Sec t i on 217 (2A A ) o f t he C om pan ies A c t , 1956 , i n r e l at i on t o f inancial sta tem en ts fo r t he yea r

2007 -08 , t he B oa rd o f D i r ec to r s sta tes t ha t :


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A n n u a l R e p o r t 2 0 0 7 - 2 0 0 8

i . I n t he p repa ra t i on o f t he annua l accoun ts , t he app l i cab le accoun t i ng standards have been fo l low ed

a longw i th p r ope r exp lana t ion re l at i ng t o m a te r i al depa r tu r es, i f any ;

i i. R easonab le and p ruden t accoun t i ng po l i c ies have been adop t ed i n p repa ra t ion o f t he f i nanc ial

s tatem ents , tha t they have been cons isten t ly app l ied and tha t r easonab le and pru dent jud gm ents and

est imates have been m ade in respect o f i tem s not conc luded by the year end , so as to g ive a t r ue andfai r v i ew o f t he s ta te o f a ff ai r s o f t he C om pany as at 31s t M a rch , 2008 and o f t he p ro f i t f o r t he yea r

ended on 31s t M a rch , 2008 ;

i ii . P rope r and su f f ic i en t care has been taken fo r m a in tenance o f adequate accoun t i ng reco rds i n

accordance w i th the pr ov is ions o f the C om panies Ac t , 1956, fo r safeguard ing the assets o f the

C o m pany and fo r p reven t i ng and de tec t i ng f r aud and o the r i r r egu lar i t i e s; and

i v T he f inancial sta tem en ts have been p repa red o n a go ing conce rn basi s.

The deta i ls re la t ing to techno logy absorp t ion , fo re ign exchange earn ings and outgo requ i red to bed i sc losed unde r t he C om pan ies (D i sc losu re o f P ar t i cu lar s i n t he r epo r t o f t he B o a rd o f D i r ec to r s ) R u les,

1988 , are g i ven in t he annexu re t o and fo rm s par t o f t h i s r epo r t .

The i n fo rm a t ion requ i red unde r Sec t i on 217 (2A ) o f t he C om pan ies A c t , 1956 , r ead w i t h t he C o m pan ies

(Par t icu lars o f Em ployees) Ru les, 1975, as ame nded, fo r m s par t o f th is rep or t . As per t he pr ov is ions o f

Sect ion 21 9 (1) (b ) ( iv ) o f the C om panies Ac t , 1956, the rep or t i s be ing sent t o a l l the shareho lder s o f the

C o m pany exc lud ing t he a fo resaid i n fo rm a t ion . A ny shareho lde r i n te rested i n ob t a in i ng t he pa r t i cu lar s

m ay ob t a in i t by w r i t i ng t o t he C om pany Sec re ta r y o f t he C om pany.

The D i rec to r s a re p leased to p l ace on r eco rd t he i r app rec iat i on f o r t he con t i nued gu idance and suppo r t

p ro v ided by t he C en t ra l G o ve rnm en t , G ove rnm en t o f G u jara t , G u jara t U r j a V i kas N igam L im i ted ,

G o ve rnm en t o f M aharash t ra , M aharash t ra Sta te E lec t r i c i t y D i st r i bu t i on C o m pany L im i ted , M aharash t ra

Sta te E lec t r i c it y T ransm ission C om pany L im i ted , P ow er G r i d C o rp o ra t i on o f I nd ia L im i ted , G u jara t

Pow er C o rp o ra t i on L im i ted , f inancial i n st i t u t i ons and b anks. The B oa rd r ecogn ises t he con t r i bu t i on o f

t he esteem ed consumers i n t he g row th o f t he C om pany and takes t h i s opp o r t un i t y t o p l edge the

C o m pany 's com m i tm en t t o se rve t hem . The B oa rd a l so w ou ld pa r t i cu la r l y l ike t o exp ress g reat

apprec ia t ion fo r the unders tand ing and suppor t ex tended by the employees a t a l l leve ls and the

shareho lders .

Fo r and on beha lf o f t he B oard o f D i r ec to r s

A h m e d a b a d Sudhir Mehta1 5 t h M ay, 20 08 C hair m an

14.Conservat ion of Energy, Technology Absorpt ion, Forex Earnings & Outgo

15.Part iculars of Employees

16.Appreciation and Acknowledgements


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FORM B: AN NEXURE TO DIRECTORS' REPORT

RESEARCH AND DEVELOPMENT (R&D)

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

FOREIGN EXCHAN GE EARNINGS AND OUTGO

1. Specific areas in which R&D was carr ied out by the Company

Th e C o m pany pe r se d id no t ca r r y ou t any basi c R & D w o rk du r i ng t he yea r 2007 -08 . H o w eve r, som eact iv i t ies car r ied out th rough ind igenous sources resu l ted in s ign i f i cant improvement in thepe r fo r m ance o f t he system .

(a) Gene ra t ing Sta t ions

- N ew C a rb ide i nse r ted G r i nd ing E lem en ts used i n t he G r i nd ing o f C oa l Process

( b) Tr an sm i ssio n an d D ist r ib u t io n

- U pg rad ing o f 132 kV SB I P ir ana L ine w i t h use o f G A P conduc to r s

- I n t r oduc t i on o f M ob i l e D G V an fo r f aste r r esto r a t ion o f supp l y

2. Benefits derived as a result of above R&D init iat ives

- Im p ro vem en t i n o pe ra t i ona l ef f ic i ency by co n t i nuous gene ra t i on

- Im p ro vem en t i n system re l i ab i li t y

3. Future Plan of Act ion

- I n t r oduc t i on o f D i st r i bu t i on A u tom a t ion i n 11 kV system

- I n t r oduc t i on o f H V D S (H igh V o l t age D i s t r i bu t i on System )- I n t r o d u c t i o n o f A M R ( A u t o m at e d M e t e r R ead i n g)

4. Expendit ure on R&D

N o expend i t u re o n R & D o f cap i t a l o r r ecu r r i ng natu re has been i ncu r red .

1. Efforts made towards technology absorpt ion, adaptation and innovat ion

- N o a b so r p t i o n o f n e w t e c h n o lo g y

2. Benefits derived as a result of the above efforts

- N o t app li cab le

Descript ion (Rs. in Crores)

Foreign Exchange Earned -

Foreign Exchange used (Actual Basis)

a ) Imp o r t o f C ap i t al G oods 203.39

b ) Impo r t o f Fue l , C om ponen ts , Sto r es & S pare pa r t s 0.13

c) Pro fessiona l and C onsu l ta t ion Fees 0.06

d) Trave ling , Subscr ip t io ns and O ther s 2.01

e ) R epaymen t o f Loan -

f) Paym en t o f in t e r est o n L o an -

Fo r and on beha lf o f t he B oard o f D i r ec to r s

A h m e d a b a d Sudhir Mehta1 5 t h M ay, 20 08 C hair m an


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A n n u a l R e p o r t 2 0 0 7 - 2 0 0 8

REPO RT O N C O RPO RAT E G O V E RN A N C E

C o rpo ra te gove rnance i s g loba l ly r ecogn i sed as a f undam en ta l com ponen t f o r t he ro bus t ope ra t i on o f eve ryco rpo ra te en t i t y . Sound gove rnance p r act i ces and responsib le co r po r a te behaviou r con t r i bu te t o supe r i o rlong- te rm per fo rmance o f compan ies . I t has evo lved in to a se t o f gu ide l ines , des igned to ensure a f i rmcom m i tm en t t o values and e th i ca l conduc t by co r po r a tes.

A dap ta t i on t o chang ing t imes is t he key t o co r po r a te grow th and l ong te rm su rv i val . C on t i nuousim pr ovem ent is necessary in corpo ra te gover nance as w e l l . In fac t , be t t e r gover nance prac t ices enab lecompanies to in t roduce more e f fec t ive in te rna l cont ro ls su i tab le to the chang ing nature o f bus inessope r a t ions , im p ro ve pe r fo r m ance and a lso p rov ide an opp o r t un i t y t o i nc rease pub l i c unde rs tand ing o f t hekey ac t iv i t ies and po l ic ies o f the o rgan isa t ion . Ind ian cor po ra tes have adopt ed bet te r go vernance pr ac t icesand have dem onst r a ted op enness in the i r dea l ings w i th s takeho lders acro ss the b oard . Th is has beenaugm en ted b y regu lato r y au tho r i t i e s in t r o duc ing and im p ro v ing gove rnance p rac t i ces f o r I nd ian co rpo ra tesover the last decade.

Company's Philosophy on Code of Governance

T h e C o m p a n y b e l i e v e s t h a t t h e C o r p o r a t e G o v e r n a n c e C o d e o f t h e L i s t i n g A g r e e m e n t ( t h e C o d e )p resc r i bes on l y a m in im um f ramew ork f o r gove rnance o f a bus iness i n co r po r a te fr amew ork . The C o m pany 'sph i losophy is to d eve lop th is des i red m in imu m f ram ew or k and inst i tu t iona l ise the sp i r i t i t en ta i ls . T h is w i l l laythe f ounda t i on f o r f u r t he r deve lopm en t o f supe r i o r gove rnance p rac t ices, w h i ch are v i t a l f o r g row ingsuccess fu l bus iness and fo r fu r ther ing the in te res t o f a l l s takeho lders in the bes t poss ib le manner . TheC om pany reco gn ises tha t t r ansparency , d isc losure , f inanc ia l cont ro ls and accoun tab i l i t y a re th e p i l lars o f anygood system o f co rp o ra te gove rnance .

1. BOARD OF DIRECTORS

T he B oa rd o f D i r ec to r s com pr i ses o f e i gh t d i r ec to r s o f w h i ch fi ve are no n -execu t i ve d ir ec to r s. O f t hesef ive non -execu t i ve d i r ec to r s , f ou r a re i ndependen t d i r ec to r s. C om pos i t ion o f t he B oa rd i s i n con fo rm i t yw i t h t he p rov i si ons o f t he C o de .

T he B oa rd o f D i r ec to r s m e t f ou r t imes du r i ng t he year o n 29 th M ay, 2007 , 30 th Ju l y, 2007 , 29 th O c tobe r ,2007 and 29t h January , 2008.

C om pos i t ion o f t he B oa rd and o the r r e l ated m a t te r s as on 30 t h A p r i l, 2008 are g i ven be low :

Name of the Director Category No. of No. of Board Board At tendance

Directorship Committees of Meetings at the last

held which Member/ at tended AGM

Chairman

Sh r i Sud h ir M eh t a, Pr o m o t er and 6 1 (as C hair m an ) 4 YesC hair m an ex ecu t ive 1 (as M em b er )

d i r ec to r

Shr i S. K. Bar ua (a) N o n- ex ecu t ive 5 1 (as C hair m an ) 1 N .A .i ndependen t 4 ( as M em ber )d i r ec to r

D r . B aku l H . D ho lak ia (b ) N o n- ex ecu t ive 8 3 (as C hair m an ) 3 Yesindependen t 4 ( as M em ber )d i r ec to r


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a ) Sh r i S. K . B arua w as appo in ted as a d i r ec to r on 29 th January , 2008 i n t he casua l vacancy caused bythe r es ignat ion o f D r . Baku l H . D ho lak ia .

b ) D r . B a k u l H . D h o l a k ia r e s i g n e d f r o m t h e B o ar d e f f e c t iv e f r o m 2 8 t h N o v e m b e r ,

2 0 0 7 .

c ) Sm t . V. L . Jo sh i , I A S r e si gn e d f r o m t h e B o ar d e f fe c t iv e fr o m 1 5 t h A p r i l , 2 0 0 8 .

D eta i ls o f d i rec t or sh ip g iven above exc lude d i rec t or sh ips he ld in p r iva te com panies, fo r e ign com paniesand com pan ies reg i ste red unde r S ec t i on 25 o f t he C om pan ies A c t , 1956 . D e ta il s o f com m i t t eemembersh ip i nc lude membersh ip / cha i rmansh ip o f A ud i t C ommi t t ee and S ha reho lde rs ' / I nves to r s 'G r i evances C o m m i t t ee o f pub l i c com pan ies.

Shr i Sam ir M ehta and Shr i S. B . Kunw ar are l iab le to re t i re by r o t a t ion a t the ensu ing annua l genera l m eet ingand be ing e l ig ib l e , have o f f e red t hem se l ves fo r r e -appo in tm en t . B r i e f r esume o f t he d i r ec to r s p ro posed tobe re -appo in ted and o the r r e l evan t de t a il s a re g iven i n t he exp lana to r y s tatem en t annexed to t he N o t i ce

Name of the Director Category No. of No. of Board Board At tendance

Directorship Commit tees of Meet ings at the last

held which Member / at tended AGM

Chairman

Sm t. V. L. Jo shi, IA S (c ) N o n-ex ecu t ive 1 4 2 (as C hair p er so n ) 2 N oindependen t 1 ( as M em ber )d i r ec to rN o m i ne e o fG o v t . o f G u ja rat(a shareho lder )

Sh r i S. B . K unw ar N o n - ex ecu t ive 2 2 (as M em b er ) 4 Yesindependen td i r ec to rN o m i n ee o f L I C(a shareho lder )

Sh r i Pank aj Pat e l N o n - ex ecu t ive 1 1 3 (as C hair m an ) 3 N oindependen t 3 ( as M em ber )d i r ec to r

Sh r i P. S. Sh eno y N o n -ex ecu t ive 6 2 (as C hair m an ) 4 Yesindependen td i r ec to r

Sh r i Sam ir M eh t a Pr o m o t er and 4 2 (as M em b er ) 4 Yesnon -execu t i ved i r ec to r

Sh r i M ar k and B hat t , Pr o m o t er and 4 2 (as M em b er ) 4 YesW h ole -t im e D i rec t or ex ecu tive

d i r ec to r

Sh r i M u r li Pr o m o t er and 1 - 4 YesRanganat han , ex ecu t iveW ho le - t im e D ir ec t or d ir ec t or


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A n n u a l R e p o r t 2 0 0 7 - 2 0 0 8

of the annua l genera l m eet ing . Shr i Sudh i r M ehta and Shr i Samir M ehta are re la ted to each o t her . N one o ft he o the r d i r ec to r s are r e l ated i n te r - se .

T he B oa rd m ee t i ngs are no r m a ll y he ld a t t he reg i ste red o f f ice o f t he C om pany in A hm edabad . The B o a rdm ee ts a t least once a quar te r w i t h gap be tw een tw o m ee t i ngs no t exceed ing fou r m on ths . The B oa rd

agenda papers and o t her ex p lanato ry no tes are c i rcu la ted to the d i r ec to rs in advance. Sen ior e xecut ivesa re i nvi t ed t o a t t end the bo a rd m ee t i ngs as and w hen requ i red .

2. AUDIT COMMITTEE

Present m em ber s o f the A ud i t C om m i t tee are Shr i P. S. Sheno y, Ch a irm an, Shr i S . B . Kunw ar, Shr i PankajPa te l and Sh r i S. K . B arua . A l l t he m em bers o f t he C om m i t t ee a re i ndependen t d i r ec to r s. D u r i ng t he year ,cons t it u t i on o f t he C o m m i t t ee w as rev i sed and b road -based .

D u r i ng t he year unde r r ev iew , f ou r m ee t i ngs o f t he A ud i t C o m m i t t ee w e re he ld on 29 th M ay, 2007 , 30 thJu l y, 2007 , 29 th O c tobe r , 2007 and 29 th January , 2008 . C om pos i t ion o f t he C o m m i t t ee and de ta i ls o fa t t endance o f t he m em bers at t he C om m i t t ee m ee t i ngs du r i ng t he yea r are g iven be low :

Name of the Director Qualificat ion No. of meet ings

attended

Shr i P. S. Sheno y, C hair m an B . C o m ., C A IIB 4

Sh r i S. K . B ar ua M . Tech . IIT, K anp u r, N .A .P h . D . (M anagemen t ) I IM, A hm edabad

D r. B ak u l H . D ho lak ia Ph . D . (Eco no m ics) 3

Sh r i S. B . K unw ar C har t er ed A cco un t an t 4

Sh r i Pank aj Pat e l M . Ph ar m . N .A .

Sh r i Sam ir M eh t a M B A (Finance) -

Sh r i M ar k and B hat t Po st G r ad uat e D ip lo m a in B usiness 1

M anagemen t - I IM , A hm edabad

Shr i Sami r M eh ta resigned f r om the C om m i t t ee e f fec t i ve f r om 29 th M ay, 2007 . D r . B aku l H . D ho lak iar e si gn e d f r o m t h e C o m m i t t e e ef fe c t iv e f r o m 2 8 t h N o v e m b e r , 2 00 7 .

Sh r i M a rkand B hat t w as appo in ted as a mem ber o f t he C om m i t t ee e f f ec t i ve f r om 1st January , 2008 andres igned f ro m the C om m i t tee o n 29t h January, 2008. Shr i P. S. Sheno y w as appo in te d as the C ha i rm an o fthe C om m i t tee e f fec t ive f r om 29th January , 2008. Sim i lar ly , Shr i S . K . Barua and Shr i Panka j Pate l w ereappo in ted as m em bers o f t he C om m i t t ee e f f ec t i ve fr om 29 th January , 2008 .

C om pos i t ion o f t he C om m i t t ee i s i n comp l iance w i t h t he requ i rem en ts o f C lause -49 o f t he L i st i ngA g reem en t and Sec t i on 292A o f t he C om pan ies A c t , 1956 .

T he C o m pany Sec re ta r y ac t s as sec re ta r y t o t he C om m i t t ee . Th e C om m i t t ee mee t i ngs w e re a lsoa t tended by t he r ep resen tat i ves o f t he sta tu to r y aud i t o r s and t he M anagemen t A ssu rance A ud i t o r s /I n te rna l A ud i t o r s and the C h ie f Financ ial O f f ice r o f t he C om pany. The C o m m i t t ee i nv it es sen io rexecu t i ves, as it cons ide rs app r op r i ate t o a t t end m ee t i ngs o f t he C om m i t t ee .

Te rm s o f r e fe rence o f t he A ud i t C om m i t t ee are i n com p l iance w i t h t he p ro v i si ons o f C lause -49 o f t he


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1 3

L i s t i ng A g reemen t and the C ompan ies A c t , 1956 . Ma jo r t e rms o f r e fe rence o f t he C ommi t t ee i nc ludeover see ing the f inanc ial repo r t ing process, rev iew o f f inanc ial sta tem ents , ensur ing com pl iance w i th theregu lato r y gu ide l ines, r ev iew o f i n te rna l aud it r epo r t s , r ecom m end ing appo in tm en t and rem une ra t i on o fsta tu to r y aud it o r s t o t he B o a rd o f D i r ec to r s and to r ev iew adequacy o f i n te rna l con t r o l system s andin ter na l aud i t func t ion .

3. SHAREHOLDERS' / INVESTORS' GRIEVAN CE COMMITTEE

T he Sha reho lde rs' / I nvesto r s' G r i evance C om m i t t ee i n t e r a l i a rev iew s shareho lder / inves tor g r ievances.M em bers o f t he C o m m i t t ee a re Sh r i P anka j Pa te l, C ha i rm an , Sh r i Sami r M eh ta and Sh r i M a rkand B hat t .Shr i Raj iv Shah, C om pany Secre t ary is the C om pl iance O f f icer and ac ts as secre tary to t he C om m i t tee .

T he C o m m i t t ee me t f r o m t im e to t im e du r i ng t he year t o r ev iew red r essa l o f t he sha reho lde r g r i evances.T he Shareho lders ' / Investo rs ' Gr ievance Co m m i t tee is au thor ised to appro ve share t r ansfers and re la tedreques ts. Fu r the r , mem bers o f t he C om m i t t ee a re seve ra ll y au tho r i sed t o app r ove share t r ansfe r s andt ransm ission up to 10 ,000 sha res unde r o ne t r ansfe r deed / d ocum en t . Sen io r execu t i ves o f t he C om panyand the C om pany Secre t ary are also severa l ly au thor ised to appro ve t rans fer / t ransmission o f shares upt o5 ,000 sha res unde r o ne t r ansfe r deed / do cum en t .

T he C o m pany rece ived 231 com p lain t s du r i ng t he year and they w e re a t t ended w i t h i n a r easonab lepe r i od o f t ime . N o com p lain t w as pend ing as on 31s t M a rch , 2008 .

N o va l id req uests fo r share t rans fer , issue o f d up l ica te share cer t i f i cates , e tc . w ere p end ing as on31s t M a rch , 2008 beyond 30 days fo r p ro cessing.

4. MANAGEMENT REMUNERATION

Chairman and Whole-t ime Directors

R em une ra t i on o f t he C ha i rm an and W ho le - t ime D i rec to r s w as de te rm ined by t he B oard o f D i r ec to r s andapp roved by t he sha reho lde rs at t he 2nd annual gene ra l m ee t i ng o f t he C om pany he ld on 15 th D ecemb er,

2 0 0 6 .

Independent Non-Execut ive Directors (INEDs)

1 . I N E D s ar e c o m p e n sat e d f o r t h e ir se r v ic e s t o t h e C o m p a ny b y w ay o f c o m m i ssi o n . Sh ar e h o l d e r s h av eapp roved a ce i li ng o f 1% o f ne t p ro f i t s pe r annum fo r p aym en t o f com m ission .

2 . W i t h in t h e c e il in g, t h e C h ai r m a n o f t h e B o ar d o f D i r e ct o r s h as t h e p o w e r t o d e c id e t h e c o m m i ssi o n t obe pa id t o each IN E D . The com m ission w as de te rm ined on t he basi s o f pa r t i c ipa t i on at t he B o a rd andA u d i t C o m m i t t e e m e e t i ng s.


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D eta il s o f r em une ra t i on pa id t o t he d i r ec to r s fo r t he yea r 2007 -08 a re as unde r :

Te rm s o f appo in tm en t o f t he C ha irm an and W ho le - t ime D i rec to r s ( appo in ted f o r a pe r i od o f 5 years e ff ec t ive

f rom 1st O c tobe r , 2006 ) a re gove rned by t he reso lu t i ons o f t he sha reho lde rs and app l i cab le r u l es o f t heC om pany. Th ey are no t en t i t led to severance pay. Sa lary and per qu is ites inc lude sa lary, house ren t a l low ance,con t r i bu t i on t o p ro v iden t fund / g ra tu it y / supe rannuat i on f unds and app roved pe rqu i s it es .

N one o f the d i rec t or s have been granted s tock o pt io ns dur ing the year. Co m m iss ion o f Rs . 3 .20 lac o f Shr i S.B . K unw ar ( nom inee o f L IC ) has been pa id t o L i fe I nsu rance C o rpo ra t i on o f I nd ia . C om m ission o f R s . 1 .00 l aco f Sm t . V. L . Josh i, IA S (nom inee o f t he G ove rnm en t o f G u ja rat ) has been pa id t o t he G o ve rnm en t o f G u ja rat .

Remuneration Commit tee

T h is i s a non -m andato r y r equ i rem en t o f C lause -49 o f t he L i s t ing A g reem en t . The B o a rd o f D i r ec to r s has no tf o rmed a remune ra t i on commi t t ee and dec i s i ons on appo in tmen t and remune ra t i on o f t he d i r ec to r s a retaken by t he B o a rd o f D i r ec to r s and app ro ved by t he shareho lde rs i n gene ra l mee t i ng .

Shareholding of non-executive director s

Shr i Sami r M eh ta ho lds 6 ,125 equ i t y sha res o f t he C om pany. O the r non -execu t i ve d i r ec to r s do no t ho ld anyshares o f the Co m pany.

(Rs. in lacs)

Name of the Director Sit t ing Fees Salary & Commission Total

Perquisit es

Shr i Sud h ir M eh t a N il 3 19 .2 5 20 0 .00 51 9 .25

Sh r i S. K . B ar ua N il N il 0 .50 0 .50

D r. B ak u l H . D ho lak ia N il N il 2 .40 2 .40

Sh r i Pank aj Pat e l N il N il 1 .50 1 .50

Sh r i P. S. Sheno y N il N il 3 .20 3 .20

Sh r i Sam ir M eh t a N il N il N il N il

Sh r i S. B . K unw ar N il N il 3 .20 3 .20

( N o m i n ee o f L I C )

Sm t . V. L . Jo sh i, IA S N il N il 1 .00 1 .00( N o m i n ee o f G o v t . o f G u j ar a t )

Sh r i M ar k and B hat t N il 3 02 .4 0 20 0 .00 50 2 .40

Sh r i M u r li Ranganat han N il 1 28 .3 0 N il 12 8 .30

Total Nil 749.95 411.80 1161.75


17/96

1 5

5. SUBSIDIARY COMPANIES

Tor ren t P ow er G r i d L im i ted , ( e r stw h i le To r ren t P ow er T ransm ission P r i vate L im i ted ) a jo i n t ven tu recom pany w i t h P ow er G r i d C o rpo ra t i on o f Ind ia L im i ted , has becom e a subs id i ar y o f t he C om panye f fec t i ve fr o m 19 th O c tobe r , 2006 . The C om pany has fo r m ed ano the r subsid i ar y , To r ren t P ipavav

G ene ra t i on L im i ted o n 25 th Sep tem be r , 2007 .

6. GENERAL BODY MEETINGS

D eta i ls o f annua l genera l meet ings (AG M s) he ld by the C om pany dur ing the last th ree years are g ivenb e l o w :

Meet ing Date Time Venue No. of special

resolut ions passed

1st A G M 16 t h Ju ly, 20 05 11 .30 a.m . To r r en t H o use, N i l

O f f A sh ram R oad ,

A hm edabad 380 009

2nd A GM 15 t h D ecem b er, 200 6 10 .0 0 a.m . Shet h M angald as 4G i rdha rdas

M em or ial H a l l (Tow n H a ll ) ,

El l is Br idge,

A h m e d ab a d 3 8 0 0 0 6

3 r d A G M 30 t h Ju ly, 20 07 10 .0 0 a.m . Shet h M angald as 1

G i rdha rdas

M em or ial H a l l (Tow n H a ll ) ,

El l is Br idge,

A h m e d ab a d 3 8 0 0 0 6

Spec ia l reso lu t ion s m ent ion ed above w ere passed by a show o f hands. N o r eso lu t ion w as passedthrough pos ta l ba l lo t dur ing the year under re ference. The pos ta l ba l lo t exerc ise sha l l be conductedf rom t im e to t im e i n com p l iance w i t h t he app li cab le p rov i si ons o f Sec t i on 192A o f t he C o m pan ies A c t ,1956 and r u les m ade the reunde r , as and w hen requ i red .

7. DISCLOSURES

Legal Compliances

T he C om pany has fo r m alised a sys tem for legal com pl iances app l icab le to th e C om pany. Sta tus o f legalcom pl iances and steps taken to r ec t i fy non-co m pl iances , i f any is p laced to th e Board o f D i rec to rs at i tsmeet ings .

T he re w e re no i nstances o f ma te r i a l non -com p l i ances du r i ng t he year unde r r ev iew . N o s t r i c t u res o rpena lt i e s w e re im posed on t he C om pany by SE B I, stock exchanges o r any sta tu to r y au tho r i t y o n anym a t te r r e l ated t o cap i t al m a rke ts du r i ng t he l ast t h ree yea rs .


18/96

A n n u a l R e p o r t 2 0 0 7 - 2 0 0 8

Code of Business Conduct

T he C om pany has adop ted a C ode o f B us iness C o nduc t b ased o n t he bus iness p r i nc ip l es o f t heC o m pany. The C ode o f B usiness C onduc t has a lso been p os ted on t he w ebs it e o f t he C om pany. I ncom p l i ance w i t h t he C o de , d i r ec to r s and sen io r m anagemen t o f t he C o m pany have af f irm ed the i r

com p l i ance w i t h t he C ode fo r t he yea r unde r r ev iew . A dec lara t i on t o t h i s e f f ec t s igned by t heC ha i rm an fo rm s pa r t o f t h i s annua l r epo r t .

Related Part y Transactions

Transact i ons w i t h t he r e l ated p a r t i es a re d i sc l osed i n N o te N o . 19 o f Schedu le 15 f o rm ing par t o f t hef inanc ial sta tem ents fo r the year. Transact ions enter ed in to by the C om pany w i th the re la ted par t iesdu r i ng t he yea r w e re p laced to t he A ud i t C o m m i t t ee f o r r ev iew . A dequa te care w as taken to ensu retha t po t en t i al con f li c t o f i n te rest d i d no t ha rm the i n te res t s o f t he C om pany at l arge .

Compliance wit h the Corpor ate Governance Code

T h e C o m p a ny h as co m p l ie d w i t h al l t h e m a n d at o r y r e q u i r e m e n t s la id d o w n b y t h e C o r p o r at eG o v e r n a nc e C o d e . T h e B o a r d w o u l d r e v ie w i m p l e m e n t a t io n o f n o n - m a n d at o r y r e q u ir e m e n t s o f t h eC ode i n due cou rse o f t im e .

8. COMMUNICATION TO SHAREHOLDERS

D ur ing the year, quar te r ly unaud i ted f inanc ial resu l ts w i t h l im i ted rev iew rep or t and annua l aud i tedf inancial r esu l t s o f t he C om pany w e re subm i t t ed t o t he s tock exchanges on t he i r app ro val by t heBoard o f D i rec to rs . Th e r esu lts w ere pub l ished in Bus iness Standard (Eng lish) and Jansat ta (Gu jara t i )new spaper s . T hey w ou ld a lso be p laced on E lec t ron ic Data In fo rm at ion F i ling and Ret r ieval (ED IFAR)w e b s it e o n r e g ist r a t i o n o f t h e C o m p a n y fo r t h e sa m e . T h e C o m p a n y 's w e b si t ew w w. t or ren t po w er .com a lso d isp lays the o f f ic ial new s re leases in add i t io n to t he f inanc ial resu lts .

9. GENERAL SHAREHOLDER INFORMATION

4th Annual General Meet ing

D at e W ed nesd ay, 3 0 t h Ju ly, 2 00 8

T im e 9 .3 0 a.m .

Venue Shet h M angald as G ir d h ar d as M em o r ial H all (To w n H all) ,

E l l i s Br idge, Ahmedabad-380006

Tentative financial calendar for the year 2008-09

Financial year 1st A p r il 31 st M ar ch

Fir st q uar t e r resu lt s Last w eek o f Ju ly, 2 00 8

H alf year ly r esu lt s Last w eek o f O ct o b er, 20 08

T hir d q uar t e r r esu lt s Last w e ek o f Januar y, 20 09

Resu lt s fo r year end Last w eek o f June, 2 00 9


19/96

1 7

Interim financial statements

The C om pany pub l ished s tand -a lone f i nanc ial r esu lt s w i t h l im i t ed rev iew repo r t on a quar te r l y basi sdur ing the year.

Date of Book Closure

M ond ay, 23rd June, 2008 to W ednesday, 25 th June, 2008 (bo th d ays inc lusive) .

Dividend payment date

The p ro posed d i v i dend , if app roved a t t he ensu ing annua l gene ral m ee t i ng, w i ll be d i s t r i bu ted o n o ra fte r 3 1s t Ju ly, 2008, w i th in the s ta tu tor y t im e l im i t .

Listing on stock exchanges and securit y codes

Stock Exchange Securit y Code

B o m b ay St o ck Ex change L im it ed (B SE) 532 77 9

N at io nal St o ck Ex change o f Ind ia L im it ed (N SE) T O RN T PO W ER

Ann ua l l i st ing fees fo r t he year 2008 -09 have been pa id to the s tock exchanges.

Market pr ice data

The c l osing marke t p r i ce o f equ i t y shares on 31s t M a rch , 2008 ( l ast t r ad ing day o f t he yea r ) w asRs. 112.90 on BSEand Rs. 112.70 on N SE.


20/96

A n n u a l R e p o r t 2 0 0 7 - 2 0 0 8

Per fo rm ance o f equ i t y share p r i ce o f t he C o m pany v is- - vi s S& P C N X N i f t y at N SE i s as unde r :

* C losing data on t he l ast day o f t he m on th .

Relative index forcomparison purpose

Month TPL

Share

Price at

NSE (Rs.) *

S&P

CNX

Nifty * TPL share

price

A pr i l, 2007

M ay, 2007

June , 20 07

July, 2007

August , 2007

Sep tem be r , 2007

O c t o b e r, 2 0 0 7

N o v e m b e r , 2 0 0 7

D e c em b e r, 2 0 0 7January, 2008

Febru ary, 2008

March , 2008

67 .25

68 .90

70 .95

70 .45

84 .05

92 .65

165 .10

171 .45

190 .40167 .55

148 .75

112 .70

113 .60

116 .39

119 .85

119 .00

141 .98

156 .50

278 .89

289 .61

321 .62283 .02

251 .27

190 .37

S&P CNX

Nifty

106 .97

112 .41

113 .00

118 .51

116 .81

131 .40

154 .40

150 .80

160 .63134 .43

136 .69

123 .89

4,087.90

4,295.80

4,318.30

4,528.85

4,464.00

5,021.35

5,900.65

5,762.75

6,138.605,137.45

5,223.50

4,734.50

Th e m on th l y m ovem en t o f equ i t y share p r i ce du r i ng t he yea r at B SE and N SE i s sum m ar i sed be low :

M ay, 20 07 8 0 .80 6 6 .25 9 9 ,45 ,9 65 8 0 .50 66 .1 0

June, 2 00 7 7 2 .40 6 0 .25 5 0 ,37 ,8 64 7 2 .90 60 .2 0

Ju ly, 2 00 7 7 9 .00 6 8 .60 6 3 ,83 ,6 39 7 9 .00 68 .2 5

A ugust , 200 7 9 0 .40 6 6 .00 1 ,92 ,2 2 ,34 1 9 0 .40 64 .5 0

Sep t em ber, 20 07 1 01 .9 0 7 5 .50 1 ,51 ,2 8 ,27 4 1 02 .0 0 84 .0 0

O ct o b er, 20 07 1 70 .6 0 9 3 .20 5 ,38 ,1 0 ,73 5 1 70 .9 5 93 .0 0

N o vem ber, 20 07 2 08 .0 0 1 61 .1 0 1 ,12 ,7 1 ,28 0 2 08 .7 0 15 0 .00

D ecem ber, 2 007 1 99 .0 0 1 63 .4 0 3 4 ,79 ,7 51 2 00 .9 5 16 2 .00

Januar y, 200 8 2 69 .9 0 1 29 .3 5 1 ,74 ,3 8 ,70 9 2 68 .0 0 12 6 .20

Feb r uar y, 2 00 8 1 89 .0 0 1 28 .0 0 5 9 ,99 ,8 02 1 88 .4 0 12 7 .00

M ar ch , 20 08 1 46 .0 0 9 3 .25 5 5 ,38 ,0 75 1 46 .0 0 93 .1 5

37 ,45 ,490

70 ,84 ,236

34 ,98 ,062

57 ,31 ,038

1,68,09,185

1,56,74,437

5,94,12,341

1,36,18,406

37 ,13 ,247

2,09,12,710

55 ,07 ,464

40 ,91 ,229

A p r il, 20 07 7 3 .20 5 6 .00 4 7 ,58 ,4 37 7 3 .05 56 .5 5

BSE NSEMonth

LowVolume

LowVolume

High(Rs.) (Rs.)

High(Rs.) (Rs.)


21/96

1 9

Distr ibut ion of shareholding as on 31st March, 2008

By s ize o f shareho ld ing

01 t o 5 00 59 ,7 80 7 5 .25 83 ,4 3 ,67 9

5 01 t o 1 00 0 1 0 ,55 4 1 3 .28 69 ,8 0 ,65 1

100 1 t o 2 00 0 4 ,08 2 5 .14 58 ,1 6 ,42 1

2 001 t o 30 00 1 ,68 6 2 .12 4 2 ,37 ,952

30 01 t o 4 00 0 79 9 1 .0 0 2 7 ,99 ,7 03

4 00 1 t o 50 00 6 40 0 .81 2 9 ,15 ,0 77

5 00 1 & ab ove 1 ,9 03 2 .4 0 4 4,1 3,5 4,8 25

Total 79,444 100.00 47,24,48,308

1 .76

1.48

1.23

0.90

0.59

0.62

93 .42

100.00

No. of Shares No. of

Shareholders

%

Shareholders

No. of

Shares

% of

Shareholding

11 911 311 210 7

13 713 4

16 1

15 115 4

13 1

11 712 4

27 9

29 0

25 1

28 3

14 2

11 912 011 611 4

15 7

32 2

19 0

15 0

20 0

25 0

30 0

35 0

M

ar-

07

Apr-

07

M

ay-

07

Jun-

07

Jul-07

Aug-

07

Sep-

07

O

ct-

07

N

ov-

07

D

ec-

07

Jan-

08

Feb-

08

M

ar-

08

10 0

15 0

20 0

25 0

30 0

35 0

Relat iveP e r f o rm a n ce o f TP LShare Price Vs.S& P C N X N i ft y

S & P C N X N ift y Ind ex T PL Sh ar e Pr ice (Rs.)

Per

formance

Month

10 0


22/96

Dematerialisation of shares

E qu i t y sha res o f t he C om pany can be t r aded i n dem a te r i al ised f o rm on l y by a ll i n vesto r s. The C om pany hasestab l ished connec t i v i t y w i t h N a t iona l Secu r i t i e s D epos it o r y L im i ted (N SD L) and C en t r a l D epos it o r ySe rv i ces ( Ind ia) L im i ted (C D SL) . D em a t secu r i t y ( ISIN ) code fo r t he equ i t y shares i s IN E 813H 01021 .

A s on 31s t M a rch , 2008 , 84 .99% o f t he t o t a l sha res have been dem a te r i al ised .

Share t ransfer system

Pow ers t o app ro ve sha re t r ansfe r s and r e l ated r equests have been de lega ted t o t he m em bers o f t heSha reho lde rs' / I nvesto r s' G r i evance C om m i t t ee and to t he sen io r o f f i ci al s o f t he C o m pany fo r exp ed i t i ousd isposal o f shareho lder s ' req uests and com pla in ts .

Share t r ansfers w h ich are com ple te in a l l respects are t aken up fo r appro va l a t leas t once in a fo r tn igh t and thet r ansfer r ed secur i t ies are despatched t o the t r ansferees w i th in the st ipu la ted t im e. Det a ils o ft rans fers / t ransmiss ion approved by the de legatees are no ted by the Shareho lders ' / Inves tors ' Gr ievanceC o m m i t t e e at i t s n ex t m e e t in g.

Outstanding GDRs / ADRs / Warrants / any other convert ible inst ruments

The C o m pany has no t i ssued any G D R s / A D R s / w a r ran t s o r any conve r t i b l e inst r um en ts as on da te .

A n n u a l R e p o r t 2 0 0 7 - 2 0 0 8

B y ca tego r y o f shareho lde rs

2 M u tua l Funds

3 N at iona l ised Banks

4 L i f e I nsu rance C o rpo ra t i on o f I nd ia

52 .70

2.72

0.09

10 .24

1,28,49,842

4,41,616

4,84,00,785

7.85

11 .41

5 GIC and Subs id iar ies

6 G o ve rno r o f G u ja rat w i t h G u ja rat Sta te

3,70,59,114

5,39,28,671

Investm en t L im i ted

0.13

14 .86

100.00

7 FIIs

8 O t h e r s

Total

6,20,773

7,01,81,000

47,24,48,308

1 P rom o te r s 24 ,89 ,66 ,507

Sr.

No.

Category No. of Shares heldst

on 31 March, 2008

% of Shareholding


23/96

2 1

Registered office

Tor r en t H ouse , O f f A sh ram R oad , A hm edabad 380009 .

Plant locations

1 ) Po w e r H o u se , Sab ar m at i , A h m e d ab a d 38 0 0 0 5

2 ) V atva G as P ow er Sta t i on , V atva , A hm edabad 382445

3 ) SU G E N C C P P, V i ll age A khakho l , Taluka K amr e j , Su ra t 394115

Compliance officer

Rajiv Shah,

C ompany S ec re ta r y ,

To r r e n t P o w e r L i m i t e d ,

O f f A sh ram R oad ,

A h m e d ab ad 3 8 0 0 0 9Te le p h o n e : 0 7 9 - 2 6 5 8 3 0 6 0 , 2 6 5 8 5 0 9 0

Fax : 07 9 -2 65 8 2 32 6

e- m ail : r ajivsh ah @ t o r ren tp ow e r.co m

W e bsit e : w w w .t or r en tp ow e r.co m

Regist rar & Share Transfer Agents

Shareho lders are requested to send a l l documents per ta in ing to t rans fer /demat requests and o ther

com m un icat i on i n r e l a t ion t he re to d i r ec t l y t o t he R egi st r a r a t t he f o l l ow ing add r ess:M /s . Sharepr o Serv ices (Ind ia ) Pr iva te L im i ted ,

U n i t : To r r e n t Po w e r L i m i t e d ,

Satam Ind ustr ia l Estate,

C ard ina l Gr ac ious Road,

C haka la , Andher i (Eas t ) ,

M u m b a i 4 0 0 0 9 9

Te le p ho n e : 0 2 2 - 6 77 2 03 0 0 / 34 5 / 3 7 2

Fax : 02 2 - 283 7 5 64 6

e-m ail : shar ep ro @ shar ep ro ser vices.co m

For and on b ehal f o f t he B oa rd

A hmedabad Sudhir Mehta

15 t h M ay, 200 8 C hair m an


24/96

A n n u a l R e p o r t 2 0 0 7 - 2 0 0 8

Cert ificate of compliance with the Code of Business Conduct

To ,T he Shareho lders ,To r r e n t Po w e r L i m i t e d

To r ren t P ow er L im i ted has in p l ace a C ode o f B usiness C onduc t ( t he C o de ) f o r i t s B oard o f D i r ec to r s andsen io r m anagemen t pe rsonne l . I r epo r t t ha t t he B o a rd o f D i r ec to r s has rece i ved af f irm a t ions on com p l i ancew i t h t h e C o d e f r o m t h e m e m b e r s o f t h e B o a r d an d se n io r m an ag em e n t o f t h e C o m p a ny f o r t h e y e ar u n d e rrev iew .

A hmedabad Sudhir Mehta

15 t h M ay, 2 00 8 C hair m an


25/96

2 3

To t h e M e m b e r s o f

To r r e n t Po w e r L i m i t e d

W e have examined the co m p l i ance o f cond i t i ons o f co rpo ra te gove rnance by Torr ent Power Limit ed f o r t h e

year ended on 31 st M a rch , 2008 as st i pu lated i n C lause 49 o f t he L i st i ng A g reemen t o f t he sa id C om pany w i t hsto ck exchanges.

The com p l iance o f cond i t i ons o f co rp o ra te gove rnance is t he respons ib il it y o f t he M anagemen t . O u r

examina t ion has been l im i t ed t o a r ev iew o f t he p rocedu r es and im p lemen t a t ion t he r eo f adop ted by t he

C om pany fo r ensu r i ng com p l i ance o f t he cond i t i ons o f t he co r po r a te gove rnance as st i pu lated i n t he said

C lause. I t i s ne i ther an aud i t no r an expr ession o f an op in ion on t he f inanc ia l s tatem ents o f the C om pany.

In ou r op in i on and to t he bes t o f o u r i n fo rm a t ion and acco rd ing t o t he exp lanat i ons gi ven to us , and based on

the rep r esen ta t i ons m ade by t he D i rec to r s and the M anagemen t , w e ce r t i f y t hat t he C om pany has com p l ied

w i th t he co nd i t i ons o f co rpo ra te gove rnance as st i pu lated i n C lause 49 o f t he above m en t i oned L i st i ng

A g r e e m e n t .

W e fu r t he r sta te t ha t such com p l i ance i s ne i t he r an assu rance as t o t he f u tu re v i ab i l it y o f t he C om pany no r o f

t he e f f i ci ency o r e f fec t i veness w i t h w h i ch t he M anagemen t has conduc ted t he a f f ai r s o f t he C om pany.

F o r C . C . C h o k s h i & C o .

C h a r t e r e d A c c o u n t an t s

(G aur av J. Shah)

A hm ed ab ad Par t ne r

1 5 t h M ay, 20 08 M em b er sh ip N o .3 57 01

A U D IT O RS' C E RT I FIC A T E O N C O RP O R AT E G O V ERN A N C E


26/96

A n n u a l R e p o r t 2 0 0 7 - 2 0 0 8

A U D I T O R S' R EP O R T

To t he Shareho lders o f

T O RRE N T P O W E R L IM I T ED

1 . W e h av e au d i t ed t h e a t t a ch e d B al an c e Sh e e t o f T O R RE N T P O W E R LI M I T E D as at 3 1 s t M a r ch , 2 0 0 8 an da lso t he P ro f i t and Loss A ccoun t and the C ash F low Sta temen t f o r t he year end ed on t ha t da te , annexedthe re to . T hese f i nanc ial sta tem en ts are t he r espons ib i l it y o f t he C om pany 's m anagemen t . O u rrespon s ib i l i t y is to expr ess an op in ion o n th ese financ ia l s tatem ents based o n ou r aud i t .

2 . W e conduc ted ou r aud it i n acco rdance w i t h aud it i ng standards genera l ly accep ted i n I nd ia. Tho seStandards requ i re t ha t w e p lan and pe r fo r m the aud i t t o ob ta in r easonab le assu rance abou t w he the r t hef inanc ia l s ta tements are f ree o f mater ia l miss ta tement . An aud i t inc ludes examin ing , on a tes t bas is ,ev idence suppor t ing the amounts and d isc losures in the f inanc ia l s ta tements . An aud i t a lso inc ludesassess ing the account ing pr inc ip les used and s ign i f i cant es t imates m ade by m anagem ent , as w e l l aseva lua t ing the over a ll f inanc ial sta tem ent p resenta t ion . W e be l ieve tha t ou r aud i t p ro v ides a reasonab lebasis fo r o ur o p in ion .

3 . A s r e q u ir e d b y t h e C o m p an i es (A u d i t o r ' s Re p o r t ) O r d e r , 2 0 0 3 , as am e n d e d b y t h e C o m p an i es (A u d i t o r ' sRe p o r t ) ( A m e n d m e n t ) O r d e r, 2 0 0 4 ( t o g et h e r ' O r d e r ' ) issu e d b y t h e C e n t r al G o v e r n m e n t i n t e r m s o fSec t i on 227 (4A ) o f t he C om pan ies A c t , 1956 , w e enc lose in t he A nnexu r e a sta tem en t on t he m a t te r sspec i fied in paragraphs 4 & 5 o f the said O rd er .

4 . F ur t h e r t o o u r c o m m e n t s i n t h e an n e x u r e r e fe r r e d t o i n P ar a gr a p h 3 ab o v e , w e r e p o r t t h a t :

( a) W e have ob t a ined a ll t he i n fo rm a t ion and exp lana t ions , w h i ch t o t he bes t o f ou r know ledge and be l ie fw e re necessa ry f o r t he p u rpo ses o f ou r aud it ;

( b ) I n ou r op in i on , p rop e r bo oks o f accoun t as requ i red by l aw have been kep t by t he C om pany so f a r as i tappears fr o m ou r exam inat i on o f t he boo ks ;

( c ) The B a lance Shee t , Pro f it and Loss A ccoun t and C ash F low Sta tem en t dea l t w i t h by t h i s r epo r t a re i nagreem en t w i t h t he books o f accoun t ;

( d ) I n ou r op in i on , t he B a lance Shee t , P ro f i t and Lo ss A ccoun t and C ash F low Sta tem en t dea l t w i t h by t h i srepo r t co m p ly w i t h t he A ccoun t i ng Standards re fe r red t o i n sub -sec t i on (3C ) o f sec t i on 211 o f t heC o m pan ies A c t , 1956 ;

(e ) O n the basi s o f w r i t t en r ep resen tat i on rece i ved f r om the d i r ec to r s as on 31s t M a rch , 2008 and taken

on r eco rd b y t he B oa rd o f D i r ec to r s , w e repo r t t ha t none o f t he d i r ec to r s i s d i squa li fi ed as on 31stM arch, 2008 f ro m be ing appo in ted as a d i rec t or in te rm s o f c lause (g) o f sub-sec t ion (1 ) o f Sec t ion 27 4o f t he C om pan ies A c t , 1956 ;

( f ) I n ou r o p in i on and to t he bes t o f ou r i n fo rm a t ion and acco r d ing t o t he exp lanat i ons gi ven to us , t hesaid accounts read w i th s ign i f icant accoun t ing po l ic ies and o the r no tes thereo n, g ive the in fo r m at ionrequ i red b y t he C om pan ies A c t , 1956 i n t he m anner so req u i red and g ive a t r ue and fai r v i ew i nconfo rm i ty w i th the account ing pr inc ip les genera l ly accepted in Ind ia :

( i ) i n t he case o f t he B a lance Shee t , o f t he sta te o f t he a ff ai r s o f t he C om pany as a t 31st M a rch , 2008 ;

( i i) i n t he case o f t he Pro f it and Loss A ccoun t , o f t he p ro f i t fo r t he year ended on t ha t date ; and

( i ii ) i n t he case o f t he C ash F low Sta tem en t , o f t he cash f l ow s fo r t he yea r ended on t ha t date .

Fo r C.C. Chokshi & Co.


Gaurav J. Shah

A hm ed ab ad Par t ner

1 5 t h M ay, 20 08 M em b er sh ip N o .35 70 1


27/96

2 5

A N N EX U RE T O T H E A U D IT O RS' RE PO RT

(Re fe r red t o i n paragraph 3 o f ou r r epo r t o f even date )

1 . The na tu re o f t he C o m pany 's business / ac t i v it i e s du r i ng t he yea r i s such tha t t he r equ i rem en ts o f c lause(x i ii ) and ( x i v ) o f pa ragraph 4 o f t he O rde r a re no t app li cab le t o t he C om pany.

2 . (a) Th e C o m pany has m a in ta ined p ro pe r r eco rds show ing fu ll par t i cu lar s , i n c lud ing quan t i t at i ve de tai lsand si tuat io n of f ixed assets.

( b ) Th e C om pany has a p ro g ram m e o f p hysi cal ve r i f icat i on o f i t s fi xed asse ts ove r a pe r i od o f t h r ee yea rs,w h i ch in ou r op in i on , i s r easonab le hav ing regard t o t he s ize o f t he C o m pany and t he na tu re o f i t sassets. In accor dance w i th th is p ro gramm e, cer ta in f ixed assets have been phys ica lly ver i f ied by th emanagemen t du r i ng t he yea r and acco rd ing t o t he i n fo rma t i on and exp lana t i ons g i ven to us , nomater ia l d isc repanc ies have been not iced on such ver i f i ca t ion . As regards underground d is t r ibu t ionsystem s, w e have been in fo rm ed tha t t he sam e are not p hys ica lly ver i f iab le .

(c ) T he C om pany has not d isposed o f f a substant ia l par t o f f ixed assets dur ing the year .

3 . ( a) A s exp la ined to us , i n ven to r i es w e re physi cal ly ve r i fi ed du r i ng t he year by t he m anagemen t a treasonable intervals.

( b ) I n ou r o p in i on and acco r d ing t o t he i n fo rm a t ion and exp lanat i ons gi ven to us , t he p r ocedu res o fphys ical ver i f ica t ion o f inventor ies fo l low ed by the m anagem ent w ere reasonab le and adequate inre la t ion to the s ize o f the C om pany and the natur e o f i ts bus iness .

( c ) I n ou r o p in i on and acco rd ing t o t he i n fo rm a t ion and exp lana t ions gi ven to us, t he C o m pany hasm a in ta ined p rop e r r eco rds o f i t s i nven to r i es and no m a te r i al d i sc repanc ies w e r e no t i ced on physi calver i f i ca t ion .

4 . ( a) T h e C o m p an y h as n o t g r an t e d l o an s se c u r e d / u n se c u r e d t o c o m p an i es, f ir m s o r o t h e r p a r t i es co v e r e din t he reg iste r m a in ta ined unde r sec t i on 301 o f t h e C o m pan ies A c t , 1956 . U nde r t h e c i r cums tancessub clauses ( ii i ) (a) to ( i i i ) (d) are no t app l icable.

( b ) T he C o m pany had taken l oan f r om a com pany cove red i n t he reg iste r m a in ta ined unde r sect i on 301 o f

t he C om pan ies A c t , 1956 . The m ax im um amo un t i nvo l ved du r i ng t he yea r w as R s. 110 c ro res and theyear end ba lance w as Rs. N i l .

( c ) A cco r d ing t o t he i n fo rm a t ion and exp lanat i ons gi ven to us , t he ra te o f i n te res t and o the r t e rm s andcond i t i ons on w h i ch t he l oan has been taken f r om the com pany cove red i n t he r eg iste r m a in ta inedunde r sec t i on 301 o f t he C om pan ies A c t , 1956 a re no t , p r ima facie , p re jud i c ia l t o t he i n te res t o f t heC o m p a n y .

(d ) I n r espec t o f t he above -s tated l oan taken fr om the com pany, t he repaymen t o f p r i nc ipal and i n te res tw e re r egu la r du r i ng t he yea r.

5 . I n ou r o p in i on and acco r d ing t o t he i n fo rm a t ion and exp lana t ions gi ven to us , t he re a re adequate i n te rna lcon t r o l p ro cedu res com m ensu ra te w i t h t he si ze o f t he C om pany and the na tu re o f i t s business f o r t hepur chase o f invento ry and f ixed assets and fo r t he sale o f good s and serv ices and w e have not ob served any

cont inu ing fai lu re to cor rec t m a jor w eaknesses in such in te rn a l cont ro ls.

6 . I n r espec t o f t r ansact i ons t hat need to be en te red i n t he reg i ste r m a in ta ined i n pu rsuance o f sec t i on 301 o ft he C o m pan ies A c t , 1956 :

(a) T he pa r t i cu la r s o f con t r act s o r a r rangem en ts r e fe r red t o i n sec t i on 301 o f t he C om pan ies A c t , 1956 ,have been so en te red ;

(b ) T he t r ansact i ons have been m ade at p r i ces w h i ch a re r easonab le hav ing rega rd t o t he p reva il ing m a rke t


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A n n u a l R e p o r t 2 0 0 7 - 2 0 0 8

pr ices a t the re levant t im e. N o such t ransac t ions have been reco rd ed in the sa id reg iste r in respect o fsale o f e lec t r ic i ty as the C om pany is o f th e v iew tha t such t r ansac t ions be ing fo r cash a t p r eva il ingmarke t p r i ces do no t r equ i r e t o be en te red i n t he reg i s te r ma in ta ined unde r S ec t i on 301 o f t heC om pan ies A c t , 1956 .

7 . I n ou r op in i on and acco rd ing t o t he i n fo rm a t ion and exp lana t ions gi ven to us, t he C om pany has com p l i ed

w i th t he p r ov i si ons o f sec t i ons 58A , 58A A o r any o the r r e l evan t p rov i si ons o f t he C o m pan ies A c t , 1956and the ru l es fr am ed the r e unde r , w he r e app l icab le , w i t h r egard t o t he depo si t s accep ted f r o m the pub l ic .D u r i ng t he yea r, t he C om pany has no t accep ted pub l i c depos it s as de fi ned unde r sec t i on 58A o f t heC o m pan ies A c t , 1956 . N o o r de r has been passed by t he C o m pany Law B o a rd o r N a t iona l C o m pany LawTr ibun a l o r Reserve Bank o f Ind ia or any Co ur t o r any o ther Tr ibun a l.

8 . I n ou r op in ion , t he C om pany has an adequa te i n te rnal aud i t system com m ensu ra te w i t h i t s si ze andnatur e of i ts business.

9 . W e h av e b r o a d ly r e v ie w e d t h e b o o k s o f ac c o u n t m a i nt a in e d b y t h e C o m p an y p u r su an t t o t h e r u l e s m ad eby the C en t ra l G o ve rnm en t f o r m a in tenance o f cost r eco r ds unde r sec t i on 209 (1 ) (d ) o f t he C o m pan iesA c t , 1956 i n r espec t o f gene ra t ion and d i st r i bu t i on o f e l ec t r i c it y and a re o f t he o p in ion t ha t p r ima facie t hepr escr ibed accoun ts and reco rd s have been main ta ined. We have not , ho w ever , m ade a det a iledexam inat ion o f the sa id reco rd s .

10 . (a) A cco r d ing t o t he i n fo rm a t ion and exp lanat i ons gi ven to us, t he C om pany is gene ra ll y r egu la r i ndepos i t ing w i t h app ro p r i a te au tho r i t i e s und i spu ted sta tu to r y dues i nc lud ing p ro v iden t f und , i nvesto reducat ion and pr o t ec t ion fund , em ployees ' s tate insurance, incom e tax , sa les tax , w ea lth t ax , serv icetax , cus tom dut y, exc ise dut y, cess and o ther m ater ia l s tatu t or y dues app l icab le to i t .

( b ) A cco r d ing t o t he i n fo r m a t ion and exp lana t ions g iven to us, no und i spu ted amo un ts payab le i n r espec to f incom e tax , w ea lth t ax , sa les tax , custo m s dut y and exc ise duty w ere o uts tand ing , as a t 31s t M arch2008 fo r a pe r i od o f m o r e t han si x mo n ths fr om the da te t hey becam e payab le .

( c ) A cco r d ing t o t he i n fo rm a t ion and exp lanat i ons gi ven to us , t he re a re no dues o f w eal t h t ax , exc isedut y and cess w h ich have not b een depo si ted on account o f any d isput e . In respect o f custo m dut y,sales tax and incom e tax , the fo l low ing dues have not b een depo s ited o n accoun t o f d ispute :

D escr ip t io n A m o u nt Fo r um w her e d isp ut e is p end in g(Rs. i n Crore)

C ust o m D ut y o n H igh er Assessm en t Value 0 .1 6 T he C ust o m s, Ex cise an d Ser v ice Tax

App e l late Tr ibuna l, Mum bai

C u st o m D ut y o n H igh er Assessm ent Value 0 .2 8 Su p r em e C o ur t of Ind ia, N ew D elh i

C ust o m D ut y o n H igh er Assessm ent Value 6 .7 8 C om m issio ner of A p p eal, Jam nagar

Sales Tax o n W o r k s C o n t r act s 0 .2 4 Sales Tax A p p e llat e Tr ib u n al, C alicu t ,

Sales Tax o n W o r k s C o n t r act s 0 .1 1 A p p e llat e Tr ib u n al, C u t t ak

Sales Tax o n W o r k s C o n t r act s 0 .2 9 A n d h r a Pr ad esh H igh C o ur t

Sales Tax o n W o r k s C o n t r act s 0 .1 5 Sales Tax A p p e llat e Tr ib u n al, A nd h r a Pr ad esh

Sales Tax o n W o r k s C o n t r act s 0 .09 Sales Tax Tr ib u n al, O r issa

Sales Tax o n W o r k s C o n t r act s 0 .13 Sales Tax A p p e llat e Tr ib u n al, C alicu t .

Inco m e Tax A ct , 1 9 6 1 4 .52 Inco m e- t ax A p p e llat e Tr ib un al

Inco m e Tax A ct , 1 9 6 1 5 .33 G u jar at H igh C o u r t


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2 7

11 . The C om pany has been regi ste red f o r a pe r i od l ess t han f ive years and ne i t he r i t has any accumu la tedlosses nor cash losses dur ing the f inanc ia l year covered by our aud i t and the immedia te ly p reced ingf inanc ial per iod .

12 . I n ou r op in i on and acco rd ing t o t he in fo rm a t ion and exp lana t ions gi ven to us , t he C o m pany has no t

defau l ted in repayment o f dues to f inanc ia l ins t i tu t ions or banks . The Company has not issued anydeben tu res .

13 . T he C o m pany has no t g ran ted l oans and advances on t he b asi s o f secu r i t y by w ay o f p ledge o f sha res,deben tu r es and o the r secu r i t i e s.

14 . A cco r d ing t o t he i n fo r m a t ion and exp lana t ions gi ven to us , t he C om pany has no t g i ven any gua ran tee f o rloans taken by o ther s f ro m banks or f inanc ial inst i tu t ions .

1 5 . I n o u r o p i n io n , t h e t e r m l o an s h av e b e e n ap p l ie d f o r t h e p u r p o se f o r w h i ch t h e y w e r e r a ise d e x c e p t t othe ex t en t t he f unds dep loyed t em po r a r i ly e l sew he re pend ing app l icat i on f o r t he spec if ied pu r pose .

16 . A cco r d ing t o t he i n fo rm a t ion and exp lana t ions gi ven to us, and on an ove ra l l examina t ion o f t he ba lancesheet o f the C om pany, funds ra ised on shor t te r m basis have, p r im a fac ie , no t be en used dur ing the year

fo r l ong t e rm i nvestm en t .

17 . The C om pany has no t m ade p re fe ren t i a l a ll o tm en t o f sha res t o pa r t i es and com pan ies cove red i n t hereg i ste r m a in ta ined unde r sec t i on 301 o f t he C om pan ies A c t , 1956 .

18 . The C om pany has no t i ssued any deben tu res du r i ng t he year .

19 . The C om pany has no t r a i sed m oney by pub l ic issue du r i ng t he year .

20 . To the bes t o f ou r know ledge and be l i e f and acco rd ing t o t he i n fo rm a t ion and exp lana t ions gi ven to us , nom a te r i al fr aud on o r by t he C om pany w as no t i ced o r r epo r ted du r i ng t he yea r excep t i n case o f t he f t o fe l ect r i c i t y r epo r ted by t he v i g il ance depa r tm en t o f t he C om pany, t he am oun t f o r w h i ch is no tascertainable.

Fo r C.C. Chokshi & Co.


Gaurav J. Shah

A hm ed ab ad Par t ne r

15 t h M ay, 2 00 8 M em b er sh ip N o .3 57 01


30/96

Schedule A s at A s atst st

3 1 M ar ch , 20 0 8 3 1 M ar ch , 2 0 07

SOURCES OF FUNDSShareholders' Funds

Share Capi ta l 1 4 7 2 .4 5 47 2 .45Reserve s and Surp lus 2 2 ,4 1 7 .3 1 2 ,23 2 .932 ,889 .76 2 ,705 .38

Loan FundsSecured Loans 3 2 ,476 .00 1 ,464 .23U n s e c u r e d Loans 4 61 .25 162 .89

2 ,537 .25 1 ,627 .12Other FundSer v ice L in e and Secu r it y D ep o sit s fr o m C o nsum er s 3 3 4 .6 8 30 0 .80

Deferred Tax Liability (net) 92 .73 31 .515 ,854 .42 4 ,664 .81

APPLICATION OF FUNDSFixed Assets

G r oss B lock 5 3 ,689 .23 2 ,985 .67Less: D eprec ia t i on 517 .37 364 .22N e t B l o c k 3 ,1 7 1 .8 6 2 ,6 2 1 .4 5Cap i ta l W or k - i n -Prog ress 2 ,827 .90 2 ,247 .56

5 ,999 .76 4 ,869 .01Investments 6 6 1 .8 8 12 5 .33Current Assets, Loans and Advances 7In te res t accrued on Investm en ts and D epos i ts 0 .43 2 .00Inven to r i es 165 .80 152 .80Sundry D eb to rs 412 .80 342 .76C ash and Ban k Balances 1 8 5 .8 8 4 1 .29Lo ans an d A d van ces 4 6 7 .0 9 35 5 .88

1 ,2 3 2 .0 0 89 4 .73Less: Curr ent Liabilit ies and Provisions 8C ur r en t L iab ilit ies 8 3 4 .2 3 80 1 .93Pr o v isio ns 6 04 .9 9 42 2 .33

1 ,439 .22 1 ,224 .26Net Current Assets (2 07 .2 2 ) (32 9 .5 3 )

5 ,854 .42 4 ,664 .81

Significant Accounting Policies 14Not es on Accounts 15

A n n u a l R e p o r t 2 0 0 7 - 2 0 0 8

A s p e r o u r r e p o r t o f e v e n d ate Sudhir MehtaC h a i r m a n

Fo r C.C. Chokshi & Co. Samir MehtaC h ar t e r ed A cco un t an t s D ir ect o r

Gaurav J. Shah Rajiv ShahPar t ne r C o m p any Secr et ar y

A h m ed ab ad , 15 t h M ay, 20 0 8 A h m ed ab ad , 15 t h M ay, 20 0 8

BALANCE SHEET

AS AT 31ST MARCH, 2008 (Rs in crores)


31/96

Schedule Year ended Six M on t hs ended

3 1st M ar ch , 2 00 8 31 st M ar ch , 20 0 7

INCOME

Sale o f Elect r ical En er gy 3 ,61 8 .3 2 1 ,3 8 8 .0 7

N et Incom e o f Serv i ces D iv is ion 9 7 .2 8 3 .9 7N et Incom e o f F ly -Ash D iv i si on 10 (0 .0 9 ) (0 .2 5 )

Insu rance C la im Receip t 8 .28 7 .83

O t h e r In c o m e 11 88 .21 46 .73

3 ,722 .00 1 ,446 .35

EXPENDITURE

Elect r i cal Energy Purchased 1 ,932 .47 718 .77

Gener a t i on , D i st r i bu t i on , Adm in is t ra t i on and O the r Expenses 12 1 ,20 5 .2 4 5 1 3 .2 4

In te res t and F inance C harges 13 59 .78 19 .43

D ep r eciat io n 15 6 .3 3 6 8 .4 5

Less: Tr ansfe r fr o m Ser v ice l ine co n t r ib u t io n an d A PD RP G r an t 8 .3 9 3 .2 3

14 7 .9 4 6 5 .2 2

3 ,34 5 .4 3 1 ,3 1 6 .6 6

Profit Before Tax 37 6 .5 7 1 2 9 .6 9

Pr o visio n fo r C ur r en t Tax { ( Inc lud in g Rs.0 .05 cr o r e fo r 7 9 .7 7 1 6 .7 7

Wea l th tax ) ( 31s t March ,2007 Rs . 0 .05 c ro r e ) }

Fr in ge Bene fi t Tax 1 .0 6 0 .5 4

Pr o visio n fo r D efe r r ed Tax 6 1 .2 2 4 0 .6 0

Profit After Tax Before Exceptional Items 23 4 .5 2 7 1 .7 8

Sho r t Pr o visio n o f Tax at io n fo r ear lier year s 2 3 .2 8 0 .0 2

Net Profit for the year 21 1 .2 4 7 1 .7 6

Balan ce b r o ugh t fo r w ar d fr o m Pr evio u s p e r io d 12 7 .8 7 8 2 .7 3

Amount available for Appropriations 339 .11 154 .49

APPROPRIATIONS

G ener al Reser ve 14 0 .0 0 5 .0 7

In te r im D i v id e n d - 1 8 .9 0

Propo sed D iv idend 56 .69 -

C o r p o r at e D iv id end Tax 9 .6 4 2 .6 5

20 6 .3 3 2 6 .6 2

Balance Carr ied to Balance Sheet 13 2 .7 8 1 2 7 .8 7

33 9 .1 1 1 5 4 .4 9

Basic and D i lu ted Earn ings per Share of face value of

Rs. 1 0 each ( in Ru p ees) (Refer N o t e1 7 , Sch ed u le 1 5 ) 4 .4 7 1 .5 2

Significant Account ing Policies 14

Notes on Accounts 15

2 9

A s p e r o u r r e p o r t o f e v e n d ate Sudhir MehtaC h a i r m a n

Fo r C.C Chokshi & Co Samir MehtaC h ar t e r ed A cco un t an t s D ir ect o r

Gaurav J. Shah Rajiv ShahPar t n er C o m p any Secr et ar y

A hm ed ab ad , 1 5 t h M ay, 20 0 8 A h m ed ab ad , 15 t h M ay, 20 0 8

PROFIT & LOSS ACCOUNT

FOR THE YEAR ENDED 31st MARCH, 2008 (Rs in cro res)


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A n n u a l R e p o r t 2 0 0 7 - 2 0 0 8

A s p e r o u r r e p o r t o f e v e n d ate Sudhir Mehta

C h a i r m a n

Fo r C.C. Chokshi & Co. Samir MehtaC h ar t e r ed A cco un t an t s D ir ect o r

Gaurav J. Shah Rajiv ShahPar t ne r C o m p any Secr et ar y

A hm ed ab ad , 15 t h M ay, 20 0 8 A h m ed ab ad , 15 t h M ay, 20 0 8

Year end ed Six M o nt h s en d ed31 st M ar ch , 20 0 8 3 1 st M ar ch , 2 0 0 7

Cash Flow from Operating Act ivitiesN et Pr o f it b efo r e t ax 3 7 6 .5 7 1 29 .6 9Adjustments for :

D ep r eciat io n 1 4 7 .9 4 65 .2 2Ex cess p r o v isio n w r it t en b ack (0 .4 0 ) (2 .9 1 )In t e r est ex p en ses 5 9 .7 8 18 .9 1Pr o fit o r L o ss o n Sale / r ed em p t io n o f invest m en t (n et ) - 0 .0 1L o ss o n sale o f fix ed asse t s 1 0 .0 7 5 .7 3D iv id end / In t er est (7 .2 9 ) (6 .60 )Operating Profit before Working Capital Changes 5 8 6 .6 7 2 10 .0 5Adjustments for :Tr ad e and t he ir Rece ivab les (9 1 .8 7 ) 10 .9 2In ven t o r ies (1 3 .0 0 ) (58 .8 5 )C ur r en t L iab ilit ies and Pr o v isio ns 3 1 .4 7 2 69 .2 0Ser v ice line an d Secur it y D ep o sit s 3 3 .8 8 7 .8 4In t e r est o n Secu r it y D ep o sit s (1 3 .2 6 ) (0 .37 )Cash Generated from Operations 5 3 3 .8 9 4 38 .7 9

Tax es Paid (8 8 .6 3 ) (29 .76 )Net Cash Flow from Operating Act ivities 4 4 5 .2 6 4 09 .0 3Cash Flow from Investing ActivitiesPur chase o f fix ed asse t s (1 ,2 9 9 .2 9 ) (1 ,4 36 .0 2 )Sale o f f ix ed asse t s 2 .1 6 1 .00Pur chase o f invest m en t s (22 .2 4 ) (0 .03 )Sale o f invest m en t s 6 2 .2 6 17 .86D iv id end and in t e r est r eceived fr o m invest m en t s 8 .8 6 7 .04Net Cash used in Investing Activities (1 ,2 4 8 .2 5 ) (1 ,4 10 .15 )Cash Flow from Financing Activit iesLo ng Ter m b o r r o w ings 1 ,1 7 8 .9 5 9 31 .15U n secur ed lo an 1 5 0 .0 0 1 00 .00Rep aym en t o f f ix ed d ep o sit s (0 .0 3 ) (0 .01 )Rep aym en t o f b o r r o w ings (4 17 .1 8 ) (26 .24 )R

01. Torrent Power Limited - Annaul Report 2007-08

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Transcript of 01. Torrent Power Limited - Annaul Report 2007-08