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Tata Power Company Ltd.

BSE: 500400 Sector: Infrastructure
NSE: TATAPOWER ISIN Code: INE245A01021
BSE 00:00 | 05 Mar 107.30 -2.05
(-1.87%)
OPEN

111.00

HIGH

111.00

LOW

104.00

NSE 00:00 | 05 Mar 107.35 -1.95
(-1.78%)
OPEN

110.70

HIGH

110.70

LOW

104.00

OPEN 111.00
PREVIOUS CLOSE 109.35
VOLUME 7715904
52-Week high 114.00
52-Week low 27.00
P/E 50.61
Mkt Cap.(Rs cr) 34,286
Buy Price 107.30
Buy Qty 3061.00
Sell Price 107.70
Sell Qty 550.00
OPEN 111.00
CLOSE 109.35
VOLUME 7715904
52-Week high 114.00
52-Week low 27.00
P/E 50.61
Mkt Cap.(Rs cr) 34,286
Buy Price 107.30
Buy Qty 3061.00
Sell Price 107.70
Sell Qty 550.00

Tata Power Company Ltd. (TATAPOWER) - Director Report

Company director report

To the Members

The Directors are pleased to present to you the Integrated Report [prepared as per theframework set forth by the International Integrated Reporting Council (IIRC)] and OneHundred and First Annual Accounts on the business and operations of your Company alongwith the audited Financial Statements of Account for the financial year ended 31st March2020.

1. Financial Results

Particulars

Standalone

Consolidated

FY20 FY19 FY20 FY19#
(a) Net Sales / Income from Other Operations* 7075 8109 28948 29984
(b) Less: Operating Expenditure 4794 5302 21078 22995
(c) Operating Profit 2281 2807 7870 6989
(d) Less: Forex Loss 11 11 116 141
(e) Add: Other Income 583 516 563 386
(f) Less: Finance Cost 1510 1500 4494 4170
(g) Profit before Depreciation and Tax 1343 1812 3823 3064
(h) Less: Depreciation / Amortisation / Impairment 686 633 2634 2393
(i) Profit Before Share of Profit of Associates and Joint Ventures 657 1179 1189 671
(j) Add: Share of Profit of Associates and Joint Ventures NIL NIL 953 1402
(k) Profit Before Exceptional Item 657 1179 2142 2073
(l) Add/(Less): Exceptional Item (306) 1168 226 1746
(m) Profit/ (Loss) before Tax 351 2347 2368 3819
(n) Add/(Less): Tax Expenses or Credit (208) 452 641 1087
(o) Net Profit after Tax from Continuing Operations 559 1895 1727 2732
(p) Profit/ (Loss) before Tax from Discontinued Operations (443) (192) (443) (192)
(q) Add/(Less): Tax Expenses or Credit from Discontinued Operations 32 66 32 66
(r) Net Profit/(Loss) after Tax from Discontinued Operations (411) (126) (411) (126)
(s) Net Profit for the year 148 1769 1316 2606
(t) Net Profit for the year attributable to -
- Owners of the Company 148 1769 1018 2356
- Non-controlling interests NIL NIL 299 250
(u) Other Comprehensive income (Net of Tax) (53) (45) 836 164
(v) Total Comprehensive Income for the year 95 1724 2153 2770
(w) Total Comprehensive Income attributable to -
- Owners of the Company 95 1724 1856 2521
- Non-controlling interests NIL NIL 297 249

including rate regulatory income/(expense)

#Restated - Refer notes to consolidated financial statements

2. Financial Performance and the State of The Company's Affairs

2.1. Consolidated

On a consolidated basis the Operating Revenue was at Rs 28948 crore in FY20 comparedto Rs 29984 crore in FY19. The decrease was mainly due to delay in solar EPC projects onaccount of COVID-19 lower power demand and lower Free On Board (FOB) price of coal. Theoperating profit for FY20 recorded 13% growth over FY19 mainly due to lower fuel underrecovery in Mundra on account of lower

FOB price of coal higher coal blending and better coal sourcing. Finance costsincreased from Rs 4170 crore to Rs 4494 crore mainly due to impact of IND-AS 116 andcapacity addition in the renewables business. The profits from Joint Ventures (JV) andAssociates were lower mainly on account of lower profits from Indonesian coal mines due tolower coal prices.

The Consolidated Profit after tax in FY20 was at Rs 1316 crore compared to Rs 2606crore in FY19 mainly due to exceptional items of Rs 226 crore in FY20 as compared to Rs1746 crore in FY19. The current year exceptional items includes gain on sale ofinvestment in joint venture in South Africa ("Cennergi") reversal of impairmentprovision pertaining to Georgia investment partly offset by the adverse impact of thestandby order passed by the Supreme Court and impairment provisions in StrategicEngineering Division (SED). The exceptional item for previous year includes gain on saleof investments in associate companies viz. Tata Communications Limited (TCL) and PanatoneFinvest Limited (PFL) partially offset by impairment provisions of Rithala plant. Detaileddescription of exceptional items is provided in Standalone and Consolidated FinancialSection of Management Discussion & Analysis (MD&A).

2.2. Standalone

On a standalone basis the Operating Revenue stood at Rs.7075 crore in FY20 comparedto Rs. 8109 crore in FY19. The decrease was mainly due to lower generation on account oflower demand from procurers lower transmission charges as per the MERC tariff order andimpact of the truing up order passed by MERC. The profit in FY20 was Rs. 148 crore ascompared to Rs. 1769 crore in FY19. The decrease in the profit was mainly due to gain onsale of investment in TCL and PFL in FY19.

Refer to Management Discussion and Analysis for more details.

No material changes and commitments have occurred after the close of the year underreview till the date of this Report which affect the financial position of the Company.

2.3. Annual Performance

Details of the Company's annual financial performance as published on the Company'swebsite and presented during the Analyst Meet after declaration of annual results can beaccessed using the following link: https://www.tatapower.com/pdf/investor-relations/analyst- presentation-may-20.pdf.

2.4. Integrated Report

In keeping with the Company's commitment to society your Company this yeartransitioned from compliance based reporting to governance based reporting by adopting theIntegrated Reporting framework developed by International Integrated Reporting Council.

We present to you our First Integrated Report which highlights the Company's effortsduring the year which contribute to long term sustainability and value creation pavingthe way for a better tomorrow.

3. Improvement in Leverage Ratios and Cash from Operations

In line with the strategic intent of the Company to deleverage the Balance Sheet yourCompany's Net Debt/ Reported EBIDTA ratio has shown marked improvement from 6.2 to 5.2from FY19 to FY20 on a consolidated level. Net Debt/Equity on a consolidated level hasimproved from 2.2 to 2.0 from FY19 to FY20. This year saw a good performace in terms ofcash generated from operations with an increase of 61% from FY19 (FY20-Rs 7375 crorevis-a-vis FY19-Rs 4574 crore) due to prudent working capital management employed by yourCompany along with robust operating performance. As a result reported EBIDTA of yourCompany has also increased by 15% (FY20-Rs 8317 crore compared to FY19-Rs.7235 crore) ona consolidated basis. A brief discussion on the highlights of financial performance ofyour Company and financial and return ratios is presented in the financial capital sectionof Integrated Report (pages 114-119) as well as page 3 of the Integrated Report.

4. Management Discussion and Analysis

The Management Discussion and Analysis as required in terms of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 (Listing Regulations) is annexed to this Report.

5. Dividend

Based on the Company's performance the Directors of your Company recommend a dividendof 155% (Rs 1.55 per share of Rs. 1 each) (previous year - 130%) subject to the approvalof the Members.

The Board recommended dividend based on the parameters laid down in the DividendPolicy.

Pursuant to the Finance Act 2020 dividend income will be taxable in the hands of theshareholders w.e.f. 1st April 2020 and the Company is required to deduct tax at source(TDS) from dividend paid to the Members at prescribed rates as per the Income-tax Act1961.

The Register of Members and Share Transfer Books of the Company will remain closed fromThursday 16th July 2020 to Thursday 30th July 2020 (both days inclusive) for the purposeof payment of the dividend for the financial year ended 31st March 2020.

According to Regulation 43A of the Listing Regulations the top 500 listed entitiesbased on market capitalisation calculated as on 31st March of every financial year arerequired to formulate a dividend distribution policy which shall be disclosed in theirannual reports and on their websites. Accordingly the Dividend Policy of the Company isprovided in Annexure-I.

The Dividend Policy of the Company can also be accessed using the following link:https://www.tatapower.com/pdf/ aboutus/dividend-policy.pdf.

6. Current Business

Your Company has presence across the entire value chain of power business vizGeneration Transmission Distribution Power Trading Power Services Coal Mines andLogistics Solar PV manufacturing and associated Engineering Procurement and Constructionservices (EPC) new business initiatives like solar rooftop solar pumps EV charginghome automation and microgrid.

As on 31st March 2020 your Company has an installed capacity of 12742 MW out ofwhich 3883 MW is from 'Clean and Green sources' (Hydro waste heat recovery wind andsolar) which constitute about 30% of the total portfolio.

Your Company has decided to move away from conventional coal based power plants with acommitment to reduce carbon footprint and dependency on fossil fuel based resources likecoal and gas and focus on renewable generation foraying into new business initiativeslike solar rooftop solar pumps EV charging home automation as well as tapping intoopportunities to widen its distribution network and broaden its customer base. Anotherimportant venture is Microgrids where it has test charged around 18 microgrid projects ason 31st March 2020 with another 55 projects in pipeline in line with its commitment toprovide the rural population with affordable clean and reliable power.

Focussing on achieving growth in an environmentally responsible and sustainable manneryour Company has commissioned around 312 MW of solar PV and rooftop projects through TataPower Renewable Energy Limited (TPREL) and Tata Power Solar Systems Limited (TPSSL) inFY20 while commissioning another 178 MW hydro project overseas in Georgia. Your Company'ssubsidiary TPSSL has achieved a portfolio of 421 MW of solar rooftop projects with anorder book of another 1580 MW EPC projects amounting to a value of Rs. 7000 crore as on31st March 2020. In the solar products domain your Company is one of the leading playerswith a portfolio of 25000 solar agricultural pumps in seven states Details of yourCompany's business portfolio has been discussed in a greater detail in the section onManufactured Capital of Integrated Report (pages 40-51).

7. Reserves

As per Standalone Financials the net movement in the reserves of the Company for FY20and FY19 is as follows:

Particulars As at 31st March 2020 As at 31st March 2019
Capital Redemption Reserve 2 2
Capital Reserve 62 62
Securities Premium 5635 5635
Debenture Redemption Reserve 297 422
General Reserve 3854 3854
Retained Earnings 3027 2954
Equity Instruments through OCI (45) 331
Statutory Reserve 660 660

The Board of Directors has decided to retain the entire amount of profits for FY20 inP&L account.

8. Subsidiaries/Joint Ventures/Associates

As on 31st March 2020 the Company had 54 subsidiaries (40 are wholly ownedsubsidiaries) 30 Joint Ventures (JVs) and 5 Associates. Of the subsidiaries 3 companieshave been classified as JVs under Indian Accounting Standards (Ind AS).

During the year under review the following changes occurred in your Company's holdingstructure:

a) Energy Eastern Pte. Limited (subsidiary) merged with Trust Energy Resources Pte.Limited.

b) The entire shareholding in erstwhile JV i.e. Cennergi Pty. Limited and its 2subsidiaries was sold during the year under review. The proceeds of the divestment will beutilised towards reducing the debt in consolidated Tata Power in FY21 in line with thestrategic objective of your Company to deleverage the Balance Sheet.

c) Gamma Land Holdings Limited Beta Land Holdings Limited and Ginger Land HoldingsLimited are three JVs which ceased to exist during the year under review.

d) Renascent Power Ventures Private Limited an associate of your Company acquired75.01% equity stake in Prayagraj Power Generation Company Limited.

e) TP Kirnali Limited was incorporated as wholly owned subsidiary of TPREL.

f) TP Solapur Limited was incorporated as wholly owned subsidiary of TPREL.

A report on the performance and financial position of each of the subsidiaries JVs andAssociates has been provided in Form AOC-1 as per Section 129(2) of the Companies Act2013 (the 'Act").

Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company consolidated financial statements along with relevant documents andseparate audited financial statements in respect of subsidiaries are available on thewebsite of the Company https://www.tatapower.com/investor-relations/annual-reports-subsidiaries.aspx.

The policy for determining material subsidiaries of the Company has been provided inthe following link: https://www.tatapower.com/pdf/aboutus/policy-for-determining-material-subsidiaries.pdf.

9. Directors' Responsibility Statement

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company the work performed by the internal statutoryand secretarial auditors and external consultants including the audit of internalfinancial controls over financial reporting by the Statutory Auditors and the reviewsperformed by management and the relevant board committees including the Audit Committeethe Board is of the opinion that the Company's internal financial controls were adequateand effective during FY20.

Pursuant to Section 134(5) of the Companies Act 2013 (the 'Act') the Board ofDirectors to the best of its knowledge and ability confirm that:

i. in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;

ii. they have selected such accounting policies and applied them consistently and madejudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

10. Directors and Key Managerial Personnel

Change in Board Composition

Mr. Ashok S. Sethi superannuated as COO & Executive Director of the Companyeffective close of business hours on 30th April 2019.

Mr. Ashok Sinha was appointed as Additional Director and Independent Director of theCompany effective 2nd May 2019. His appointment was approved by the Members at the 100thAGM of the Company held on 18th June 2019.

Mr. Deepak M. Satwalekar and Mr. Nawshir H. Mirza completed their tenure as IndependentDirectors of the Company on 12th August 2019. The Board places on record its deep sense ofappreciation of the valuable contribution made to the Company by them during theirrespective tenures.

In accordance with the requirements of the Act and the Company's Articles ofAssociation Mr. Hemant Bhargava retires by rotation and is eligible for re-appointment.Members' approval is being sought at the ensuing AGM for his re-appointment.

During the year under review the Non-Executive Directors (NEDs) of the Company had nopecuniary relationship or transactions with the Company other than sitting feescommission and reimbursement of expenses incurred by them if applicable for the purposeof attending Board/Committee meetings of the Company.

Independent Directors

In terms of Section 149 of the Act Ms. Anjali Bansal Ms. Vibha Padalkar Mr. SanjayV. Bhandarkar Mr. Kesava M. Chandrasekhar and Mr. Ashok Sinha are the IndependentDirectors of the Company. The Company has received declarations from all the IndependentDirectors confirming that they meet the criteria of independence as prescribed under theAct and the Listing Regulations.

In terms of Regulation 25(8) of the Listing Regulations they have confirmed that theyare not aware of any circumstances or situation which exists or may be reasonablyanticipated that could impair or impact their ability to discharge their duties. Basedupon the declarations received from the Independent Directors the Board of Directors hasconfirmed that they meet the criteria of independence as mentioned under Regulation16(1)(b) of the Listing Regulations and that they are independent of the management.

A declaration on compliance with Rule 6(3) of the Companies (Appointment andQualification of Directors) Rules 2014 along with a declaration as provided in theNotification dated October 22 2019 issued by the Ministry of Corporate Affairs (MCA)regarding the requirement relating to enrollment in the Data Bank for IndependentDirectors has been received from all the Independent Directors along with declarationmade under Section 149(6) of the Act.

Number of Board Meetings

Four Board Meetings were held during the year under review. For further details pleaserefer Report on Corporate Governance which forms a part of this Report.

Key Managerial Personnel

In terms of Section 203 of the Act the following are the Key Managerial Personnel(KMP) of the Company as on 31st March 2020:

• Mr. Praveer Sinha CEO & Managing Director

• Mr. Ramesh N. Subramanyam Chief Financial Officer

• Mr. Hanoz M. Mistry Company Secretary

11. Annual Evaluation of Board Performance and Performance of its Committees andIndividual Directors

The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act andListing Regulations.

The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors on the basis of criteria such as the board composition and structureeffectiveness of board processes information and functioning etc.

The performance of the Committees was evaluated by the Board after seeking inputs fromthe Committee members on the basis of criteria such as the composition of committeeseffectiveness of committee meetings etc.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued bythe Securities and Exchange Board of India on January 5 2017.

In a separate meeting of Independent Directors performance of Non-IndependentDirectors the Board as a whole and the Chairman of the Company was evaluated taking intoaccount the views of the Executive Director and NEDs.

The Nomination and Remuneration Committee (NRC) reviewed the performance of individualdirectors on the basis of criteria such as the contribution of the individual director tothe Board and Committee meetings like preparedness on the issues to be discussedmeaningful and constructive contribution and inputs in meetings etc.

In a subsequent Board meeting the performance of the Board its Committees andindividual Directors was also discussed. Performance evaluation of Independent Directorswas done by the entire Board excluding the Independent Director being evaluated.

12. Policy on Board Diversity and Director Attributes and Remuneration Policy forDirectors Key Managerial Personnel and Other Employees

In terms of the provisions of Section 178(3) of the Act and Regulation 19 read withPart D of Schedule II to the Listing Regulations the NRC is responsible for formulatingthe criteria for determining for determining qualification positive attributes andindependence of a Director. The NRC is also responsible for recommending to the Board apolicy relating to the remuneration of the Directors Key Managerial Personnel and otheremployees. In line with this requirement the Board has adopted the Policy on BoardDiversity and Director Attributes which is provided in Annexure-II to this Report andRemuneration Policy for Directors Key Managerial Personnel and other employees of theCompany which is reproduced in Annexure - III to this Report.

13. Committees of the Board

The Committees of the Board focus on certain specific areas and make informed decisionsin line with the delegated authority.

The following statutory Committees constituted by the Board function according to theirrespective roles and defined scope:

• Audit Committee of Directors

• Nomination and Remuneration Committee

• Corporate Social Responsibility Committee

• Stakeholders Relationship Committee

• Risk Management Committee

Details of composition terms of reference and number of meetings held for respectivecommittees are given in the Report on Corporate Governance which forms a part of thisReport.

The Company has adopted a Code of Conduct for its employees including the ManagingDirector and the Executive Directors. In addition the Company has adopted a Code ofConduct for its Non-Executive Directors which includes Code of Conduct for IndependentDirectors which suitably incorporates the duties of Independent Directors as laid down inthe Act. The same can be accessed using the following link:https://www.tatapower.com/pdf/aboutus/Code-of-Conduct-NEDs.pdf.

All Senior Management personnel have affirmed compliance with the Tata Code of Conduct(TCoC). The CEO & Managing Director has also confirmed and certified the same. Thecertification is enclosed as Annexure-I at the end of the Report on

Corporate Governance.

14. Conservation of Energy and Technology Absorption

Your Company is committed to Conservation of Energy through various Demand SideManagement initiatives as well as fostering energy efficient appliances at highlydiscounted prices among your customers. In FY20 more than 6000 Mwh of energy savings haveoccurred due to Energy Saving programme in FY20 in Mumbai license area. These initiativeshave been discussed in greater details in the information on conservation of energy andtechnology absorption stipulated under Section 134 (3) (m) of the Act read with Rule 8 ofThe Companies (Accounts) Rules 2014 which is attached as Annexure - IV to this Report.

15. Corporate Governance

Pursuant to Regulation 34 of the Listing Regulations Report on Corporate Governancealong with the certificate from a Practicing Company Secretary certifying compliance withconditions of Corporate Governance is annexed to this Report.

16. Vigil Mechanism

Your Company believes in the conduct of the affairs of its constituents in a fair andtransparent manner by adopting the highest standards of professionalism honestyintegrity and ethical behaviour. In line with the TCoC any actual or potential violationhowsoever insignificant or perceived as such would be a matter of serious concern for theCompany. The role of the employees in pointing out such violations of the TCoC cannot beundermined.

Pursuant to Section 177(9) of the Act a vigil mechanism was established for directorsand employees to report to the management instances of unethical behaviour actual orsuspected fraud or violation of the Company's code of conduct or ethics policy. The VigilMechanism provides a mechanism for employees of the Company to approach the Chief EthicsCounsellor (CEC)/Chairman of the Audit Committee of the Company for redressal. No personhas been denied access to the Chairman of the Audit Committee.

17. Risk Management

Your Board has formed a Risk Management Committee to frame implement and monitor therisk management plan for the Company. The Committee is responsible for monitoring andreviewing the risk management plan and ensuring its effectiveness. The Audit Committee hasadditional oversight in the area of financial risks and controls. The major risksidentified by the businesses and functions are systematically addressed through mitigatingactions on a continuing basis. Furthermore your Company has set up a robust internalaudit function which reviews and ensures sustained effectiveness of Internal FinancialControls (IFC) by adopting a systematic approach to its work. The development andimplementation of risk management policy has been covered in the Integrated Report (pages32-33).

Internal Financial Control Systems and their Adequacy

The Company's internal control systems are commensurate with the nature of itsbusiness the size and complexity of its operations and such internal financial controlswith reference to the Financial Statements are adequate. Refer Integrated Report (page34).

18. Details of Significant and Material Orders

No significant and materials orders were passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future.

19. Statutory and Branch Auditors

M/s. S R B C & CO. LLP (SRBC) (ICAI Firm Registration Number: 324982E/E300003) whois the statutory auditor of your Company holds office until the conclusion of 103rd AGMto be held in the year 2022.

The requirement to place the matter relating to appointment of auditors forratification by Members at every AGM has been done away with by the Companies (Amendment)Act 2017 with effect from 7th May 2018. Accordingly no resolution is being proposed forratification of appointment of statutory auditors at the ensuing AGM.

The Company has in its Notice sought approval from the Members for passing a resolutionvide Item No. 6 authorizing the Board to appoint Branch Auditors of any Branch office ofthe Company whether existing or which may be opened/acquired outside India to act asBranch Auditors.

20. Statutory Auditors' Report

The standalone and the consolidated financial statements of the Company have beenprepared in accordance with Indian Accounting Standards (Ind AS) notified under Section133 of the Act.

The Statutory Auditor's report does not contain any qualifications reservationsadverse remarks or disclaimers.

The Statutory Auditors were present in the last AGM.

21. Cost Auditor and Cost Audit Report

Your Board has appointed M/s Sanjay Gupta and Associates Cost Accountants (FirmRegistration No.000212) as Cost Auditors of the Company for conducting cost audit for theFY21. The Company has in its Notice sought approval from the Members for passing aresolution vide Item No. 7 for ratifying the remuneration payable to the Cost Auditors forFY21. Maintenance of cost records as specified by the Central Government under Section 148(1) of the Act is not applicable to the Company.

22. Secretarial Audit Report

M/s. Makarand M. Joshi & Co. Company Secretaries (Peer Review Number:P2009MH007000) were appointed as Secretarial Auditors of your Company to conduct aSecretarial Audit of records and documents of the Company for FY20. The Secretarial AuditReport confirms that the Company has complied with the provisions of the Act RulesRegulations and Guidelines and that there were no deviations or non-compliances.

The Secretarial Audit Report does not contain any qualifications reservations oradverse remarks or disclaimers. The Secretarial Audit Report is provided in Annexure-V tothis Report.

The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand that such systems are adequate and operating effectively.

As per the requirements of Listing Regulations Practicing Company Secretaries of therespective material subsidiaries of the Company have undertaken secretarial audits of thematerial subsidiaries for FY20. The Audit Report confirms that the material subsidiarieshave complied with the provisions of the Act Rules Regulations and Guidelines and thatthere were no deviations or non-compliances.

23. Loans Guarantees Securities And Investments

The Company being an infrastructure company is exempt from the provisions asapplicable to loans guarantees security and investments under Section 186 of the Act.Therefore no details are provided.

24. Related Party Transactions

In line with the requirements of the Act and the Listing Regulations the Company hasformulated a

Policy on Related Party Transactions and the same can be accessed using the followinglink: https://www.tatapower. com/pdf/aboutus/rpt-policy-framework-guidelines.pdf.

During the year under review all transactions entered into with related parties wereapproved by the Audit Committee. Details of Related Party Transactions as per AOC-2 areprovided in Annexure-VI to this Report.

25. Sustainability

The Company has continued its journey of practising sustainability through its corevalue of Leadership with Care for the environment customers and shareholders communityand for our people.

The Company's efforts on sustainability were recognized at various platforms and atestimony to this were the various awards bestowed upon it. Your Company was ranked 1stamong power sector companies in Futurescape National Responsible Business Ranking forSustainability and Corporate Social Responsibility (CSR) released in November 2019 and wonNational Volunteering Award for promoting Employee Volunteering in February 2020. TheCompany also bagged the prestigious global Edison Award for promoting Energy and ResourceConservation under Club Enerji.

25.1 Care For Our Community/Community Relations

Your Company actively worked on five thrust areas viz. education health andsanitation livelihood and skill building water and financial inclusivity in which keyflagship interventions were undertaken in the vicinity of the Company's business presenceand beyond while maintaining focus on Affirmative Action (AA) initiatives of the Tatagroup impacting 27.10 lakh beneficiaries across Tata Power group companies in FY20(including around 14.06 lakh beneficiaries on a Standalone basis).

The CSR policy of the Company has been provided on the Company's website athttps://www.tatapower.com/pdf/ aboutus/csr-policv-14.pdf.

The Company's standalone CSR spend for FY20 stood at Rs. 3.80 crore against the 2% CSRobligation of Rs. 3.04 crore. Details of the consolidated CSR activities of your Companyand its key subsidiaries are described in Social and Relationship Capital of IntegratedReport (pages 82-93) as well as in the Business Responsibility Report (BRR). The annualreport on CSR activities (standalone) is provided in Annexure-VII to this Report. Onoverall basis the Tata Power group entities' expenditure on CSR activities stood at Rs.39.97 crore against the CSR obligation of Rs. 33.30 crore (calculated as per Section 135of the Act) in FY20.

25.2 Affirmative Action

Under its AA program your Company continued to focus on upliftment of Dalit and tribalcommunities through the defined Es under AA viz. Employment EntrepreneurshipEmployability Education and Essential Amenities around its operating sites. As part ofthe enhanced focus Tata Power Skill Development Institute (TPSDI) inducted 25% traineesfrom AA communities and achieved remarkable placements post-training. In total 4 lakhbeneficiaries were covered under AA initiatives. Besides this your Company also engagedin nurturing vendors and suppliers from AA communities to help with job creation. This hasbeen further described in the section on Social and Relationship Capital of IntegratedReport (Page 94).

25.3 Sustainability Reporting

Your Company has adopted the International Integrated Reporting Council IR Framework toprepare its first Integrated Report 2019-20. SEBI recommended Integrated Reporting to beadopted on a voluntary basis by the top 500 companies which are required to prepare BRRin February 2017. The content of the report is in accordance with the Global ReportingInitiative (GRI) standards: Core option and espouses linkages from the National VoluntaryGuidelines (NVG) on Social Environmental and Economic responsibilities of the business aswell as the United Nations Sustainable Development Goals (SDGs). The Integrated Reportcommunicates Tata Power's performance on financial and non-financial aspects to allstakeholders underlying the importance of our leadership and strategy towards valuecreation.

1. Environment

Your Company aims to be a pioneer for environmental stewardship in the power industrythrough reduction in greenhouse gas emissions and release of air pollutants bycontinuously striving for efficiency in its operations and maintenance and following bestpractices to optimize the efficiency parameters like heat rate and auxiliary consumptionof power generating stations. Your Company also has been consistently focussing on scalingup Renewables business as part of its stated strategic intent and also venturing into newenergy efficient green business initiatives like Microgrids EV charging HomeAutomations Solar Rooftop and exploring new opportunities in distribution businessesthereby working towards its commitment of sustainable 'Green' growth. A brief outline ofyour Company's ventures on these businesses and growth of renewables is given in theManufactured Capital section of Integrated Report (pages 40-51).

2. Health and Safety

Health and Safety management is one of your Company's topmost priority with a definedsafety vision "To be a leader in Safety Excellence in the global power and energybusiness". Your Company employs a pro-active and pre-emptive approach to occupationalhealth and safety and are committed to actively drive the agenda through the length andbreadth of the organisation. Consequently 100% of your contractual workforce are trainedon various aspects of Occupational health and safety. Close monitoring of safetyperformance has also helped your Company to achieve desired goal of zero injuries andfatalities. The Suraksha mobile app is one such intervention that enables employees toconveniently report unsafe conditions. A detailed description of Health and Safetyinitiatives taken by your Company is outlined in Human Capital section of IntegratedReport (pages 58-69).

3. Customer Relationship

Your Company is steadily transitioning from a B2B or a B2G company to a B2C companywith enhanced focus on value creation for customers. Foraying into various new businessinitiatives as a part of your sustainable growth strategies like rural electrification(microgrids) solar rooftop solutions Electric Vehicle charging etc. are posing newcustomer service challenges. Your Company has numerous touchpoints for customers to raisetheir queries and a structured process of tracking complaints and ensuring resolutionwithin pre-defined timelines. Your Company has also been a pioneer in developing customercentric technology through innovation and digitisation. Few of such initiatives are KnowYour Energy Consumption (KYEC) VoiceBot TINA e-Nach all women customer relations centreetc. Furthermore your Company has been instrumental in raising energy conservationawareness as well as reducing the energy cost for the consumers through variousinitiatives such as "Be Green" solar rooftop off-grid solutions etc. A detaileddescription of your customer relation measures is given in the Social and RelationshipCapital section in the Integrated Report (pages 70-81).

4. Human Resource Management

Your Company considers it imperative to create a work environment which iscollaborative as well as learning and growth oriented to enable employees to perform attheir full potential. Your HR strategy adopts a multipronged approach covering all the keyfacets of employee development. Learning as a stated value of the Company also sets thetone of your Company's endeavour to develop competencies to rise to new challengesespecially posed by changing strategies of foraying into new business areas and coming outof growth through conventional coal based thermal power generating assets. Some of the keyHuman Resource programmes of your Company are Talent Next Ullhas Youth Power

Confluence Gyankosh Long-Service Award etc. A detailed description is given in theHuman Capital section of the Integrated Report (pages 58-69).

25.4 Business Responsibility Report (BRR)

The BRR is in line with the SEBI requirement based on the 'National VoluntaryGuidelines on Social Environmental and Economic Responsibilities of Business' notified byMinistry of Corporate Affairs (MCA) Government of India in July 2011. Your Companyreported its performance for FY20 as per the BRR framework describing initiatives takenfrom an environmental social and governance perspective.

As per Regulation 34 of the Listing Regulations a BRR is attached and is a part ofthis Annual Report. Since the Company is publishing this Report under IIRC report on thenine principles of the National Voluntary Guidelines on social environmental and economicresponsibilities of business as framed by the MCA is provided in relevant sections of IRwith suitable references to the BRR.

25.5 Prevention of Sexual Harassment

Disclosures in relation to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 have been provided in the Report on CorporateGovernance.

26. Extract of Annual Return

Pursuant to Section 92 of the Act and Rule 12 of the Companies (Management andAdministration) Rules 2014 the extract of Annual Return in Form MGT-9 is provided inAnnexure - VIII to this Report and also available onhttps://www.tatapower.com/investor-relations/annual-return.aspx.

27. Particulars of Employees And Remuneration

The information required under Section 197(12) of the Act read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is attachedas Annexure - IX.

The information required under Rule 5(2) and (3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided in the Annexure formingpart of this Report. In terms of the first provision to Section 136 of the Act the Reportand Accounts are being sent to the Members excluding the aforesaid Annexure. Any Memberinterested in obtaining the same may write to the Company Secretary atinvestorcomplaints@tatapower.com. None of the employees listed in the said Annexure arerelated to any Director of the Company.

Officers of the organisation are classified into five management work levels i.e. MAMB MC MD and ME. The work levels are further divided into grades. Nonmanagementemployees are across different grades and also have been classified as unskilledsemi-skilled skilled and highly skilled.

28. Disclosure requirements

The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand that such systems are adequate and operating effectively.

29. Deposits

The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of theBalance Sheet.

30. Foreign Exchange - Earnings and Outgo

Particulars - Standalone FY20 FY19
Foreign Exchange Earnings 125 116
Foreign Exchange Outflow mainly on account of: 1301 1336
Fuel purchase 1070 1222
• Interest on foreign currency borrowings NRI dividends 3 4
• Purchase of capital equipment components and spares and other miscellaneous expenses 228 110

31. Acknowledgements

On behalf of the Directors of the Company I would like to place on record our deepappreciation to our shareholders customers business partners vendors-both internationaland domestic bankers financial institutions and academic institutions for all thesupport rendered during the year.

The Directors are thankful to the Government of India the various ministries of theState Governments the central and state electricity regulatory authorities communitiesin the neighbourhood of our operations municipal authorities of Mumbai and localauthorities in areas where we are operational in India; as also partners governments andstakeholders in international geographies where the Company operates for all the supportrendered during the year.

Finally we appreciate and value the contributions made by all our employees and theirfamilies for making the Company what it is.

On behalf of the Board of Directors
N. Chandrasekaran
Chairman
Mumbai 19th May 2020 (DIN: 00121863)

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