BOARD'S REPORT Dear Members, Your Directors are pleased to present the Twelfth Annual Report of the Company together with the Audited Accounts for the financial year ended 31st March, 2016. 1. STATE OF THE AFFAIRS HIGHLIGHTS The key highlights for the Financial Year 2015-16 are: • Financial performance of the Company on consolidated basis: o Increase in Revenue by 11.12% to Rs.11,959.24 Crore O Increase in PBDIT by 33.37% to Rs.3,262.45 Crore o Increase in PAT (after minority interest) by 140.65% to Rs.865.60 Crore • SUGEN, UNOSUGEN and DGEN Plants participated in the Phase I and Phase II of Scheme for utilisation of Gas based power generation capacity by submitting the bids and were allotted Re-gasified Liquefied Natural Gas (RLNG) and related Power System Development Fund support from the Government. The Company has booked regasification and storage capacity with Petronet LNG Limited (PLL) up to 1 mmtpa for 20 years starting from April 2017. • Hon'ble Central Electricity Regulatory Commission (CERC) has issued final true-up tariff order for the tariff period 2009-14 for SUGEN and UNOSUGEN Plants dated 25th June, 2015 and 30th October, 2015 respectively and tariff order dated 6th October, 2015 for the tariff period 2014-19 for SUGEN Plant. • Hon'ble Gujarat Electricity Regulatory Commission (GERC) vide its order dated 31st March, 2016 for true-up of FY 2014-15 and tariff determination for FY 2016-17 has reduced FPPPA to Rs.1.35/unit (Earlier rate Rs.1.98/ unit), i.e. reduction of Rs.0.63/unit for both Ahmedabad and Surat License Areas in view of the recent trend of reduction in fuel price, particularly gas price. Further, Hon'ble GERC has allowed recovery of Regulatory Charge @ Rs.0.45/unit to address the gap of earlier years. Hence, there is effective reduction of around Rs.0.18/unit in the overall tariff. • A user-friendly Customer Self Service mobile application "Torrent Power Connect" offering highly personalized services in the Company's License Areas of Ahmedabad, Gandhinagar and Surat as well as in the Franchisee Areas of Agra & Bhiwandi has been launched. • 81 MW GENSU Solar Power Project adjacent to SUGEN Plant has been successfully commissioned during the year in a cost effective manner. Additionally, the Company has entered into an agreement with M/s. Suzlon Energy Limited for developing, constructing and maintaining 201.6 MW Wind Power Project at Nakhatrana and Jamanwada in Kutch district and at Mahuva in Bhavnagar district in Gujarat. Further, an agreement with M/s. Wind World India Ltd. has been entered into for developing, constructing and maintaining 136.8 MW Wind Power Project at Mahidad in Rajkot and Surendranagar districts in Gujarat. With operational renewable capacity of 182 MW and under-construction wind power projects of 338 MW, the total renewable generation capacity of the Company would reach to 520 MW. • DGEN Plant has received five star rating from British Safety Council for Health and Safety Management System and Cables Unit received certifications for ISO 14001: 2004 and OHSAS 18001: 2007 • The Hon'ble High Court of Gujarat vide its order dated 13th August, 2015, has sanctioned the Composite Scheme of Amalgamation (the Scheme) of Torrent Energy Limited (TEL) and Torrent Cables Limited (TCL) with Torrent Power Limited (TPL). These orders were filed with the Registrar of Companies on 1st October, 2015. Accordingly, the Scheme has become operational with effective date of 1st October, 2015 and appointed date of 1st April, 2014. 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, on 10th March, 2016, declared interim dividend of 45% i.e. Rs.4.50 per equity share having face value of Rs.10/- on 48,06,16,784 equity shares for FY 2015-16 and, on 18th May, 2016, recommended the same for confirmation as final dividend (PY - Rs.1.50 per equity share having face value of Rs.10/- on 47,24,48,308 equity shares), amounting to Rs.216.28 Crore (PY - Rs.70.87 Crore). The said dividend has been paid. With Dividend Distribution Tax of Rs.44.03 Crore (PY - Rs.14.43 Crore), the total outflow on account of dividend works out to Rs.260.31 Crore (PY - Rs.85.30 Crore) i.e. 30.07% (PY - 23.71%) of consolidated annual profits after tax and minority interest. MANAGEMENT DISCUSSION AND ANALYSIS As stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report forms part of this Annual Report. COMPOSITE SCHEME OF AMALGAMATION The Hon'ble High Court of Gujarat vide its order dated 13th August, 2015, has sanctioned the Composite Scheme of Amalgamation (the Scheme) of TEL and TCL with TPL. These orders were filed with the Registrar of Companies on 1st October, 2015. Accordingly, the Scheme has become operational with effective date of 1st October, 2015 and appointed date of 1st April, 2014. From the effective date, TEL and TCL stand dissolved (without being wound up) and merged with TPL. Pursuant to amalgamation, 81,68,476 equity shares of the Company of Rs.10 each, at par, fully paid up, were allotted to the shareholders of TCL and were duly listed on BSE and NSE. FINANCE During the year under review, the Company tied-up long term loans from various Banks and Financial Institution to the tune of Rs.7,930 Crore for the purpose of reorganisation of existing long term loans of the Company and for part funding capital expenditure of the Company. Such long term loans were raised as a part of debt reorganisation of the consolidated debt of TPL, TEL and TCL pursuant to amalgamation of TEL and TCL with TPL. Outstanding amount towards long term loans, NCDs and APDRP loans as on 31st March, 2016 is Rs.8,442.92 Crore. Further, loan of USD 49.84 Mio from KfW, Germany and loan of Rs.209.78 Crore from Kotak Mahindra Bank were prepaid during the year. Details of long term loans of the Company for the year under review are provided in Note 4 to the Financial Statements. The consolidated debt to equity (including deferred tax liability) ratio as at the end of FY 2015-16 was 1.01 (PY - 1.26). CRISIL has revised long term rating for Company's long term loans, cash credit and NCDs from AA / Stable to AA- / Stable. Letters of credit / bank guarantees of the Company are rated CRISIL A1+ (Reaffirmed). 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. DIRECTORS' RESPONSIBILITY STATEMENT In terms of Section 134(3) of the Companies Act, 2013, the Board of Directors states that: a) in preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures; b) 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, 2016 and of the profits for the year ended 31st March, 2016; 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. 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. 2. SUBSIDIARIES AND JOINT VENTURES The Company has four subsidiary companies viz. Torrent Solargen Limited (TSL), Torrent Power Grid Limited, Torrent Pipavav Generation Limited and AEC Cements and Constructions Limited (AECCCL). Pursuant to the amalgamation in FY 2015-16, the shares held by TCL in AECCCL were vested in the Company, thus making AECCCL a subsidiary of the Company. The Board of Directors of the Company and TSL at their respective meetings held on 18th May, 2016, approved the Scheme of Arrangement for transfer and vesting of Solar and Wind Energy undertakings of TSL to the Company on a going concern basis for a lumpsum cash consideration representing their net asset value as on appointed date i.e. 1st April, 2015. The Scheme is conditional upon, inter-alia, requisite approvals. The Company, jointly with Torrent Pharmaceuticals Limited, promoted two Section 8 Companies under the Companies Act, 2013, viz. Tornascent Care Institute and UNM Foundation for the purpose of carrying out CSR activities. During the year, Tornascent Care Institute launched a Paediatric Healthcare Program - REACH i.e. Reach EAch CHild. 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 the Company's subsidiaries and the manner in which associates have been dealt with, forms part of Note 44 of Consolidated Financial Statements in the prescribed format. 3. CUSTOMER INITIATIVES After successfully launching the Customer Self Service Portal "connect.torrentpower.com'' the Company has recently launched a user-friendly Customer Self Service mobile application "Torrent Power Connect" to harness the power of smartphone penetration across the country for offering highly personalized services in the Company's License Areas of Ahmedabad, Gandhinagar and Surat as well as in the franchisee areas of Agra & Bhiwandi. The application incorporates various convenience features such as instant bill payments, personalized dashboard, real time service notifications and complaint registration without any need to contact the call centre or providing service number. These initiatives have virtually eliminated the need for the customers to visit a service / payment centre. Additionally, the Company has also tied up with various new online payment gateways to facilitate transition from physical to online transactions for energy bill payments. 4. ENVIRONMENT, HEALTH AND SAFETY (EHS) In line with its philosophy of highest importance to safety in its various operations and in an effort to create more awareness at the work place about safety and compliance of safety norms so as to avoid accidents at the workplace, the Company has in place the "Conviction for Safety" policy. The policy also provides for substantial compensation to the personnel and their families, who are adversely affected by accidents. Safety campaigns and public awareness programs have been enhanced. The developments concerning environment, health and safety during FY 2015-16 include: A. Gas based Generation Plants • Integrated Management System to ensure a safe, healthy and environmental friendly working at SUGEN, UNOSUGEN and DGEN Plants which includes duly certified compliances with Environmental Management ISO 14001:2004, Occupational Health & Safety Management ISO 18001:2007 and Energy Management ISO 50001:2011 standards. • Five Star rating to DGEN Plant from British Safety Council on Five Star Occupational Health and Safety System Audit. • Completion of reportable lost time accident free 3.21 million man-hours (1,187 calendar days) as on 31st March, 2016 at SUGEN Plant. • Other key EHS initiatives comprise: o Installation of rainwater collection system at DGEN Plant and rainwater harvesting system at Meghdhanush (colony building at DGEN Plant). o Relocation of diesel tank level monitoring from inside sump to ground level for safe access at DGEN Plant. o Regular meeting with short EHS related video clip, replacement of metallic hose boxes with FRP, replacement of 102 meter cooling tower corroded hand rails, installation of TOC meter to monitor liquid effluent quality at SUGEN and UNOSUGEN Plants. o Celebrations on National Safety Day, Road Safety Week, Electrical Safety Week, Chemical Safety Week, Mechanical Safety Week, National Fire Service Day, World Environment Day, Earth Day, etc. to strengthen EHS awareness. B. Coal based Generation Plant • Commissioning of NOx & SOx analyser as per guideline of CPCB and installation of CCTV camera with recording facility at water outlet points of ash ponds for monitoring water discharge and preventing possible seepage of water into the river - part of Continuous Emission Monitoring System. • In-house pilot study has been conducted for water conservation by operating cooling water system at high concentration of cycle. C. Others • No lost time accident at 51 MW Charanka Solar Plant. • Certifications under ISO 14001:2004 (Environment Management) and OHSAS 18001:2007 (Occupational Health & Safety Management) to Cables Unit. • Medical check-ups for all the permanent employees of the Company. 5. HUMAN RESOURCES Torrent Group values its employees and believes that its success is a result of the cumulative contribution of all its employees. The Human Resource Development function, continuously strives to emphasize creation of a conducive work environment and development of a robust and consistent approach towards talent management & leadership development. Attracting and retaining skilled employees, stabilizing the work force in the rapidly changing market, increasing their productivity, putting into place a credible and competent leadership, building an orientation that is consistent but accommodating local differences - are now increasingly becoming important. To accomplish this, during the year, the Group focused on redefining employee welfare policies to enrich their personal, professional and social life. Its gender diversity initiatives, focus towards ensuring that every employee gets the opportunity to effectively balance both work and life with oneself and family, were some of the key endeavours which helped to strengthen the work culture. As an organisation, Torrent Group is conscious about the health of its employees as well as their family members. This was reflected in various health care initiatives taken during the year under review towards (a) prevention, (b) cure and (c) safety net for unknown health risk to employees. Also, in order to strengthen the concept of 'Torrent Parivaar', participation of employees and their family members was encouraged through various social gatherings and events throughout the year. On the Statutory front, during the year under review, one case was filed and disposed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The year also saw reinforcement of the already existing "Whistle Blower" policy in order to emphasize and encourage reporting of any wrongdoing or any unethical practice. On the industrial front, the Company continued to foster cordial industrial relations with its workforce during the year. The Company has a diverse workforce of 7,296 employees as on 31st March, 2016 vis-a-vis 7,308 employees as on 31st March, 2015. Going forward, the Company will continue to focus on developing the right talent to achieve the common business goal. 6. CORPORATE GOVERNANCE The Corporate Governance philosophy of the Company rests on five basic principles viz. protection of rights & interests of members, equality in treatment of all members, disclosure of timely & accurate information, strategic guidance & effective monitoring by the Board and accountability of the Board to the Company & its members. As stipulated by Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Report on Corporate Governance forms part of this Annual Report. Certificate of the Auditors regarding compliance with the conditions of Corporate Governance as stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to the Board's Report as Annexure B. 7. CORPORATE SOCIAL RESPONSIBILITY (CSR) Torrent Group as a philosophy believes "Think of others also when you think about yourself". Concern for Community is an imbibed culture at the Company. The Company, as a part of its Corporate Social Responsibility, made focused efforts in the fields of Community Healthcare, Sanitation & Hygiene, Education & Knowledge Enhancement and Social Care & Concern. During the year, the Board had revised the CSR Policy of the Company to align it with the amendments in the Companies Act, 2013. The revised CSR Policy may be accessed at the below web-link: <http://www.torrentpower.com/> investors/2015/csrpolicy.pdf During FY 2015-16, the CSR programs and activities undertaken at Group level are described hereunder: • REACH: Torrent Power Limited and Torrent Pharmaceuticals Limited jointly initiated a Paediatric Health Care Program - REACH - Reach EAch CHild under the aegis of Tornascent Care Institute. Paediatric health check up camps were organised under the banner of "Shaishav" in four villages in the vicinity of the establishments of the Company as a pilot project. More than 1,200 children under the age of 6 years were medically examined. Remedial support under the supervision of Paediatricians was provided to the identified anaemic and malnourished children. Support is also being provided to special cases with chronic ailments on need basis through further medical treatment and management. • Shiksha Setu - Teaching and Learning Excellence Programme involving 6,500 students and 230 teachers, achieved 53.18% cumulative learning improvement at the end of fifth year. Programme interventions like computer based adaptive learning tool, continuous teachers' training, learning assessment of students and community sensitization brought positive outcomes that include faster learning pace of students, improved students' attendance and significant improvement in teaching capabilities. The Annual Report on CSR Activities is given as Annexure C to this Report which indicates that the Company has spent Rs.10.22 Crore (more than 2% of the average net profits of last three financial years) in this regard. Other CSR initiatives undertaken by the Company during FY 2015-16 include: • Creating livelihood: o A 42 days intensive training course covering security, basic firefighting and working knowledge of computers has been developed in-house by the security team. 82 unemployed youths from villages neighbouring SUGEN and DGEN Plants having basic primary education were provided training during FY 2015-16 and those successfully completing the training were absorbed into security related jobs at the project sites; o For routine cleaning of solar panels at the GENSU Solar Plant, a team of 42 specially abled persons (with impaired hearing and speech) were selected, oriented and inducted, thus providing them a dignified livelihood; o Many of the erstwhile land owners of DGEN Plant were sent on special vocational training (like fireman's course, ITI training etc), with necessary scholarship and stipend support, to make them skillful and employable; they were absorbed into the project on successful completion of their training. • Community healthcare: SWADHAR - the community health care center at SUGEN Plant, not only provided primary health care facilities at very nominal cost to surrounding communities, but also promoted health, hygiene and sanitation through various camps during the year. During FY 2015-16, about 7,000 persons benefitted from SWADHAR activities. • The Company had also made donations to various organisations involved in education, healthcare, providing relief to disaster victims and promotion of social welfare, harmony and nationalism. 8. DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTMENT AND RESIGNATION The Members of the Company had at the 11th Annual General Meeting held on 4th August, 2015, appointed Smt. Bhavna Doshi as an Independent Director for a term of three consecutive years ending 3rd August, 2018, pursuant to Section 149 and other applicable provisions of the Companies Act, 2013. The Members had, in the same meeting, also approved the re-appointment of Shri Sudhir Mehta as Chairman and Shri Samir Mehta as Vice Chairman of the Company w.e.f. 1st August, 2015 for a term of five consecutive years. The Government of Gujarat has nominated Shri P. K. Taneja, IAS as its nominee on the Board of the Company and the Company has appointed him as an Additional Director on the Board w.e.f. 4th August, 2015 till the commencement of ensuing Annual General Meeting (AGM). It is proposed to appoint him as a Director, liable to retire by rotation, with effect from the ensuing AGM i.e. 2nd August, 2016. Further, in accordance with Section 149 and other applicable provisions of the Companies Act, 2013, the Members of the Company had approved (through Postal Ballot) the appointment of Ms. Dharmishta Raval as an Independent Director of the Company w.e.f. 16th October, 2015 for a term of three consecutive years ending 15th October, 2018. The Board had, at its meeting held on 4th August, 2015, appointed Shri Darshan Soni as Company Secretary and Whole-time Key Managerial Personnel of the Company. RE-APPOINTMENT OF DIRECTORS The term of Shri Markand Bhatt as Whole-time Director ceased on the closing hours of 31st March, 2016 and the Board re-appointed him as Whole-time Director at its meeting held on 28th October, 2015 for a term of five years w.e.f. 1st April, 2016, subject to 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 Jinal Mehta, 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 12th 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 confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. POLICY ON 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 leadership and vision at senior levels, and have the ability to articulate a clear direction for the Company • have relevant experience with respect to Company's business (In exceptional circumstances, specialisation / expertise in unrelated areas may also be considered) • have appropriate comprehension to understand or be able to acquire that understanding o relating to Corporate Functioning 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. MANNER OF EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS The evaluation of Board, its Committees and Individual Directors was carried out as per the process and criteria laid down by the Board of Directors based on the recommendation of the Nomination and Remuneration Committee. The obtaining and consolidation of feedback from all Directors in this regards, was co-ordinated by the Vice Chairman. Based on this, Chairman / Vice Chairman briefed the Board and each of the Individual Directors, as applicable. NUMBER OF MEETINGS OF THE BOARD The Board meets at regular interval with gap between two meetings not exceeding 120 days. Additional meetings are held as and when necessary. During the year under review, the Board met five times. 9. REMUNERATION REMUNERATION POLICY The Company has in place the policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees of the Company which is as under: Components of Remuneration i. Fixed Pay comprising Basic Salary, HRA, Car Allowance (applicable to General Managers & above employees), Conveyance Allowances / Reimbursement, 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 is generally carried out based on various financial and non-financial parameters and grades assigned are used for working out the overall ceiling for remuneration and performance based pay at Unit level. o Individual Performance / track record including care for health / balance between quality of work and family life. • Promotion Rise iii. Also, Performance Based Pay i.e. Variable Pay (to General Manager & above employees) is based on annual appraisal process. iv. The increments as decided for a particular financial year are paid during the subsequent financial year. For example, the performance appraisal of an employee for FY 2015-16 is conducted in FY 2016-17 and his salary rise in FY 2016-17 reflects his performance for FY 2015-16. Remuneration of Non-Executive Directors: The Company has formulated a policy for the remuneration of Non-Executive Directors as follows: i. Sitting Fees of Rs.1 lac for each meeting of the Board or any Committee thereof, attended by them; ii. Commission on the basis of participation in the meetings of Board and Audit & Risk Management Committee subject to the condition that total commission paid to all Directors (other than Managing Director or Whole-time Director) including service tax thereon shall not exceed the limit of 1% of net profits in a financial year as laid down under the provisions of Section 197(1) of the Companies Act, 2013 read with Section 198 of the Act. iii. Non-Executive Directors will be reimbursed for all the expenses incurred for attending any meeting of the Board or Committees thereof, and which may arise from performance of any special assignments given by the Board. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures pertaining to remuneration and other details are provided in the Annexure D to this Report. 10. 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 relevant Rules. The Board of Directors recommends their re-appointment for one year. The Auditors' Report for FY 2015-16 forms part of this Annual Report and does not contain any qualification, reservation or adverse remark. COST AUDITORS Pursuant to Section 148(3) of the Companies Act, 2013, M/s. Kirit Mehta & Co., Cost Accountants, Mumbai had been appointed as the Cost Auditors of the Company for FY 2015-16 by the Board of Directors and their remuneration was ratified by members at the 11th Annual General Meeting of the Company. The Cost Audit Report for FY 2014-15 was filed on 1st October, 2015 with the Central Government (within the prescribed time limit) pursuant to Section 148(6) of the Companies Act, 2013. SECRETARIAL AUDITORS Pursuant to Section 204 of the Companies Act, 2013 read with Rules thereof, the Board of Directors had appointed M/s. M. C. Gupta & Co., Company Secretaries, Ahmedabad, as Secretarial Auditors of the Company for FY 2015-16. A Secretarial Audit Report for FY 2015-16 is annexed herewith as Annexure E. There are no adverse observations in the Secretarial Audit Report except for a temporary non-compliance in composition of Nomination and Remuneration Committee for the interim period of approx. 5 months. The Board of Directors noted the observation stated in the Secretarial Audit report and observed that the same had occurred due to the exigency arising out of the resignation of Smt. Renu Challu, a member of Nomination & Remuneration Committee. This vacancy was filled within 5 months and thereby appropriate compliance with the statutory requirements was duly ensured. 11. AUDIT AND RISK MANAGEMENT During the year, the Board reviewed and revisited the decision taken by it regarding the role of Risk Management being carried out by the Audit Committee and after detailed deliberations it was decided that the Audit Committee of the Board shall continue to play the role of Risk Management Committee and be called as Audit and Risk Management Committee' unless otherwise decided by the Board. COMPOSITION OF THE COMMITTEE During the year the Board had revised the terms of reference of the Committee to give effect to the new requirements under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. During the year, the Board has accepted all the recommendations made by the Audit and Risk Management Committee. VIGIL MECHANISM The Company has in place a Whistle Blower Policy pursuant to the requirements of the Companies Act, 2013 and the erstwhile Listing Agreement. The Policy empowers all the Stakeholders to raise concerns by making Protected Disclosures as defined in the Policy. The Policy also provides for adequate safeguards against victimization of Whistle Blower who uses such mechanism and also provides for direct access to the Chairman of the Audit and Risk Management Committee, in exceptional cases. The functioning of the Whistle Blower mechanism is reviewed by the Audit and Risk Management Committee on a quarterly basis. The details of the Whistle Blower Policy are explained in the Report on Corporate Governance and the Policy is available on the website of the Company at <http://www.torrentpower.com/investors/pdfs/2015/whistle_blower_policy.pdf> RISK MANAGEMENT The Company has in place a Risk Management framework for a systematic approach to control risks. The Risk Management Policy of the Company lays down procedures for risk identification, assessment, monitoring, review and reporting. The Policy also lists the roles and responsibilities of Board, Risk Management Committee, Chief Risk Officer, Risk Champions and Co-ordinators. Internal and external risks, with potential impact and likelihood, that may impact the Company in achieving its strategic objectives or may threaten its existence have been identified and assessed. 12. 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. 13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The details relating to conservation of energy, technology absorption, foreign exchange earnings and outgo prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are given in the Annexure G and form part of this Report. 14. APPRECIATION AND ACKNOWLEDGEMENTS The Board of Directors is pleased to place on record its appreciation for the continued guidance and support received from the Government of India, the State Governments, the Central and State Electricity Regulatory Commissions / Authorities, the National, Regional and State Load Dispatch Centres, Regional Power Committees, Gujarat Energy Development Agency, Bureau of Energy Efficiency, Chief Electrical Inspectors of Gujarat, Uttar Pradesh and Maharashtra, State Energy Developers, State Discoms, National and State Transmission Companies, the Gram Panchayats, Taluka Panchayats, District Collectors, Local Authorities, Corporation and Municipal Authorities of the areas of 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 Sudhir Mehta Chairman Ahmedabad 18th May, 2016 |