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Tata Power Company Ltd.

BSE: 500400 Sector: Infrastructure
NSE: TATAPOWER ISIN Code: INE245A01021
BSE 10:13 | 17 Aug 239.40 3.40
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NSE 10:04 | 17 Aug 239.85 3.85
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OPEN 238.05
PREVIOUS CLOSE 236.00
VOLUME 1208703
52-Week high 298.00
52-Week low 121.75
P/E 20.05
Mkt Cap.(Rs cr) 76,495
Buy Price 239.30
Buy Qty 96.00
Sell Price 239.40
Sell Qty 100.00
OPEN 238.05
CLOSE 236.00
VOLUME 1208703
52-Week high 298.00
52-Week low 121.75
P/E 20.05
Mkt Cap.(Rs cr) 76,495
Buy Price 239.30
Buy Qty 96.00
Sell Price 239.40
Sell Qty 100.00

Tata Power Company Ltd. (TATAPOWER) - Director Report

Company director report

To the Members

The Directors are pleased to present to you the third integrated report(prepared as per the framework set forth by the International Integrated Reporting Counciland in accordance with Global Reporting Initiatives (GRI) Standards 2021) and One Hundredand Third Annual Report on the business and operations of your Company along with theaudited Financial Statements for the financial year ended March 31 2022.

1. Financial Results

( Rs.in crore)
Sl. No. Particulars Standalone Consolidated
FY22 FY21 # FY22 FY21$
(a) Revenue from Operations* 11242 13469 42576 33239
(b) Less: Operating Expenditure 9560 10447 35305 25700
(c) Operating Profit 1682 3022 7271 7539
(d) Add: Other Income 2987 1260 920 439
(e) Earning before Interest Tax Depreciation & Amortisation 4669 4282 8191 7978
(f ) Less: Finance Cost 2189 2497 3859 4010
(g) Profit before Depreciation and Tax 2480 1785 4332 3968
(h) Less: Depreciation & Amortisation 1134 1235 3122 2745
(i) Profit Before Share of Profit of Associates and Joint Ventures 1346 550 1210 1223
(j) Add: Share of Profit of Associates and Joint Ventures Nil Nil 1943 873
(k) Pofit/(Loss) before Exceptional Item 1346 550 3153 2096
(l) (Less)/Add: Exceptional Item 1412 (109) (150) (109)
(m) Profit/(Loss) before Tax 2758 441 3003 1987
(n) (Less)/Add: Tax Expenses or credit 493 (101) (379) (502)
(o) Net Profit after Tax from Continuing Operations 3251 340 2624 1485
(p) Net Profit/(Loss) after Tax from Discontinued Operations (468) (220) (468) (220)
(q) (Less)/Add: Tax Expenses or Credit from Discontinued Operations Nil 174 Nil 174
(r) Net Profit/(Loss) after Tax from Discontinued Operations (468) (46) (468) (46)
(s) Net Profit for the year 2783 294 2156 1439
(t) Net Profit for the year Attributable to -
- Owners of the Company 2783 294 1742 1128
- Non-controlling interests Nil Nil 414 311
(u) Other Comprehensive income (Net of Tax) 314 243 473 (380)
(v) Total Comprehensive Income Attributable to - 3097 537 2629 1059
- Owners of the Company 3097 537 2215 747
- Non-controlling interests Nil Nil 414 312

*Including regulatory income/ (expense)

# Restated due to CGPL and Af-Taab merger (refer page no. 325 of the StandaloneFinancial Statement)

$ Restated due to completion of acquisition accounting of Odisha Discoms (refer pagenos. 464 and 465 of the Consolidated Financial Statement)

2. FINANCIAL PERFORMANCE AND THE STATE OF THE COMPANY'S AFFAIRS

2.1 CONSOLIDATED

The Operating Revenue stood at Rs. 42576 crore in FY22 compared to Rs.33239 crore in FY21 on a consolidated basis. The increase was mainly due to acquisitionof Odisha Discoms RE capacity addition and execution of major solar EPC projects. EBITDAwas at Rs. 8191 crore in FY22 compared to Rs. 7978 crore in FY21 mainly due tofavourable regulatory orders and capacity addition in RE generating companies improvedperformance and full year impact of Odisha Discoms offset by lower generation inMundra [erstwhile Coastal Gujarat Power Limited (CGPL)]. Finance costs decreased from Rs.4010 crore to Rs. 3859 crore mainly due to full year impact of repayment of loans inMundra (erstwhile CGPL). The Profits from Joint Ventures (JVs) and Associates were highermainly due to higher profits from Indonesian coal mines due to higher coal prices whichwas partly offset by higher loss in Tata Projects Limited (Tata Projects). TheConsolidated Profit after tax in FY22 was at Rs. 2156 crore compared to Rs. 1439 crorein FY21 mainly due to improved performance and full year impact of Odisha Discomsfavourable regulatory orders in RE generating companies lower finance cost offset byhigher loss in Tata Projects.

2.2 STANDALONE

The Operating Revenue stood at Rs. 11242 crore in FY22 compared to Rs.13469 crore in FY21 on a standalone basis.

The decrease was mainly due to lower generation on account of partialshutdown in Mundra. The Profit after tax in FY22 was Rs. 2783 crore as compared to Rs.294 crore in FY21. The increase in the profit was mainly due to higher dividend fromforeign subsidiaries creation of deferred tax assets on merger gain on sale of shares inTrust Energy Resources Pte. Limited to Tata Power International Pte. Limited partly offsetby impairment loss in Strategic Engineering Division.

Refer Section 4 of Management Discussion and Analysis (MD&A) formore details.

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

2.3 ANNUAL PERFORMANCE

Details of your Company's annual financial performance aspublished on the Company's website and presented during the Analyst Meet afterdeclaration of annual results can be accessed using the following link:https://www.tatapower. com/investor-relations/investor-downloads.aspx.

2.4 INTEGRATED REPORT

Continuing with our commitment towards a sustainable future and focuson governance-based reporting your Company has progressed to publish third IntegratedReport highlighting the Company's efforts to empower all categories of customers andstakeholders with future-ready smart energy solutions.

3. IMPROVEMENT IN LEVERAGE RATIOS AND CASH FROM OPERATIONS

Your Company's Net Debt / Underlying EBIDTA ratio has shownimprovement from 4.1 to 3.9 from FY21 to FY22 on a consolidated level reinforcing theCompany's commitment to maintain comfortable debt position for sustainable growth.Net Debt / Equity on a consolidated level has remained largely in line with the previousyear even after repayment of Unsecured Perpetual Securities of Rs. 1500 crore and capexof Rs. 7268 crore. A brief discussion on the highlights of financial performance of yourCompany and financial and return ratios is presented in the Investors section ofIntegrated Report (Pages 46-51).

4. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis as required in terms of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 (Listing Regulations) is annexed to this Report.

5. DIVIDEND

Based on the Company's performance the Directors of your Companyrecommend a dividend of Rs. 1.75 per share of Rs. 1 each subject to the approval of theMembers.

Pursuant to the Finance Act 2020 dividend income is taxable in thehands of the Members w.e.f. April 1 2020 and the Company is required to deduct tax atsource (TDS) from dividend paid to the Members at prescribed rates as per the Income-taxAct 1961.

The Register of Members and Share Transfer Books of the Company willremain closed from Friday June 17 2022 to Thursday July 7 2022 (both days inclusive)for the purpose of payment of dividend for the financial year ended March 31 2022.

According to Regulation 43A of the Listing Regulations the top 1000listed entities based on market capitalization calculated as on 31st March of everyfinancial year are required to formulate a Dividend Distribution Policy which shall bedisclosed on the website of the listed entity and a weblink shall also be provided intheir Annual Reports. Accordingly the Dividend Distribution Policy of the Company can beaccessed using the following link: https://www.tatapower.com/pdf/aboutus/dividend-policy.pdf.

6. CURRENT BUSINESS

Your Company is present across the entire value chain of power businessviz. Generation Transmission Distribution Power Trading Power Services Coal Mines andLogistics Solar PV manufacturing and associated Engineering Procurement and Constructionservices (EPC) Consumer facing businesses such as solar rooftop solar pumps EVcharging home automation and microgrid. Leading position in many of these segments placesyour Company as one of India's largest integrated power companies.

There has been no change in the nature of business of the Companyduring the year.

As on March 31 2022 your Company has an installed capacity of 13515MW out of which 4655 MW is from "Clean and Green sources" (Hydro waste heatrecovery wind and solar) which constitute about 34% of total portfolio.

Moving away from conventional coal-based power plants with a commitmentto reduce carbon footprint and dependency on fossil fuel-based resources like coal andgas your Company has decided to focus on renewable generation venturing intoconsumer-facing businesses like solar rooftop solar pumps EV charging home automationas well as tapping into opportunities to widen its distribution network and broaden itscustomer base. During the year your Company has acquired NESCO Utility through TP NothernOdisha Distribution Limited (TPNODL) in Odisha through competitive bidding which willcater to around 2 million consumers and is pursuing similar growth opportunity indistribution and transmission. Your Company through Resurgent Power Ventures Pte. Limited(Resurgent Platform) has acquired NRSS XXXVI Transmission Limited. Your Company hasinstalled 191 microgrid projects till March 31 2022 in line with its commitment toprovide rural population affordable clean and reliable power.

Furthermore your Company has launched smart energy solutions with theidea of "power of smart" through IoT based Home Automation solutions smartenergy management tools and various other home automation products encouraging customersto implement efficient and cost-eRs.ective home automation solutions to manage electricityusage.

Focussing on achieving growth in an environmentally responsible andsustainable manner your Company has added684MWSolarPVassetsinoperatingportfolioforsupplyof power to Discoms and captive consumers and around 23 MW of rooftop projects.Your Company's subsidiary Tata Power Solar Systems Limited (TPSSL) has commissioned1.5 GW of Utility scale projects and has an order book of around 3 GW amounting to Rs.12000 crore as on March 31 2022.

In the solar products domain your Company is a leading player with aportfolio of over 65000 solar agricultural pumps in 16 states. During the year yourCompany has refinanced Rs. 1500 crore of unsecured perpetual securities with long termdebt carrying lower interest rate.

The National Company Law Tribunal Mumbai Bench vide its Orders datedMarch 31 2022 and March 15 2022 approved the Composite Scheme of Arrangement betweenbetween CGPL and the Company and their respective shareholders and the Scheme ofAmalgamation of Af-Taab Investment Company Limited (Af-Taab) with the Company underSections 230 to 232 of the Act respectively. The Appointed Date of both the Schemes wasApril 1 2020.

Your Company's business portfolio has been discussed in detail inthe Strategy for cluster section of Integrated Report (Pages 32-35).

7. RESERVES

As per Standalone financials the net movement in the reserves of theCompany for FY22 and FY21 is as follows:

(Rs.in crore)
Particulars As of March 31 2022 As of March 31 2021#
Capital Redemption Reserve 5 5
Capital Reserve 66 66
Securities Premium 3108 3108
Special Reserve Nil 126
Debenture Redemption 297 297
Reserve
General Reserve Nil Nil
Retained Earnings 5896 3575
Equity Instruments through 529 222
OCI
Statutory Reserve 660 660

# Restated due to CGPL and Af-Taab merger

The Board of Directors has decided to retain the entire amount ofprofits for FY22 in P&L account.

8. SUBSIDIARIES/JOINT VENTURES/ASSOCIATES

As on March 31 2022 your Company had 61 subsidiaries (41 were whollyowned subsidiaries) 32 JVs and 5 Associates. Of the subsidiaries 3 companies have beenclassified as JVs under Indian Accounting Standards (Ind AS). During the year underreview the following changes occurred in your Company's holding structure:

a) The Company has acquired 51% stake in the following Odisha Discom:

i) TP Northern Odisha Distribution Limited

b) The following company has been incorporated as a subsidiary of the Company:

i) TP Solapur Saurya Limited

c) The following companies have merged with the Company:

i) Coastal Gujarat Power Limited

ii) Af-Taab Investment Company Limited

d) The following company has been merged with Nelco Limited (subsidiary):

i) Tatanet Services Limited

e) The following companies have ceased to be a subsidiary / JV of the Company:

i) TCL Ceramics Limited

ii) Koromkheti Georgia LLC

A report on the performance and financial position of each of thesubsidiaries JVs and Associates has been provided in Form AOC-1 as per Section 129(2) ofthe Companies Act 2013 (the Act).

Further pursuant to the provisions of Section 136 of the Act theaudited financial statements including consolidated financial statements along withrelevant documents of the Company and audited financial statements of the subsidiaries areavailable on the website of the Companyhttps://www.tatapower.com/investor-relations/annual-reports-subsidiaries.aspx. The policyfor determining material subsidiaries of the Company has been provided in the followinglink: https://www.tatapower.com/pdf/aboutus/policy-for-determining-material-subsidiaries.pdf.

9. DIRECTORS' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls (IFCs) andcompliance systems established and maintained by the Company the work performed by theinternal statutory and secretarial auditors and external consultants including the auditof IFCs over financial reporting by the Statutory Auditors and the reviews performed bymanagement and the relevant Board Committees including the Audit Committee of Directorsthe Board is of the opinion that the Company's IFCs were adequate and effectiveduring FY22. Pursuant to Section 134(5) of the Act the Board of Directors to the best ofits 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

During the year under review there was no change in thecomposition of the Board. However at the Annual General Meeting (AGM) held on July 52021 Members approved the re-appointment of Ms. Anjali Bansal Ms. Vibha Padalkar and Mr.Sanjay V Bhandarkar as Independent Directors of the Company for the second consecutiveterm of 5 years commencing from October 14 2021.

In accordance with the requirements of the Act and the Company'sArticles of Association Mr. Saurabh Agrawal retires by rotation and is eligible forre-appointment. Members' approval is being sought at the ensuing AGM for hisre-appointment.

Mr. Kesava Menon Chandrasekhar was appointed as Independent Director bythe Members on August 23 2017 for a period of 5 years w.e.f. May 4 2017 upto May 32022. Based on an evaluation of the balance of skills knowledge and experience on theBoard and further on the report of performance evaluation the external businessenvironment business knowledge skills experience and the substantial contribution madeby him during his tenure and considering that the continued association of Mr.Chandrasekhar as an Independent Director of the Company would be beneficial to theCompany and based on the recommendation of the Nomination and Remuneration Committee theBoard vide Resolution passed on April 21 2022 appointed Mr. Chandrasekhar as anAdditional Director of the Company and subject to approval of the Members by way ofSpecial Resolution at the ensuing AGM of the Company re-appointed him as aNon-Executive Independent Director not liable to retire by rotation for a secondconsecutive term commencing from May 4 2022 upto February 19 2023 when he attains theretirement age of 75 years as per the terms of the Governance Guidelines for TataCompanies on Board Effectiveness. Mr. Chandrasekhar shall also cease to be a Director ofthe Company with effect from close of business hours on February 19 2023. AccordinglyMembers' approval is being sought at the ensuing AGM for his re-appointment. Duringthe year under review the Non-Executive Directors (NEDs) of the Company had no pecuniaryrelationship or transactions with the Company other than sitting fees and commission asapplicable received by them.

In terms of Section 149 of the Act Ms. Anjali Bansal Ms. VibhaPadalkar Mr. Sanjay V. Bhandarkar Mr. Kesava Menon Chandrasekhar and Mr. Ashok Sinha arethe Independent Directors of the Company. In terms of Regulation 25(8) of the ListingRegulations they have confirmed that they are not aware of any circumstances or situationwhich exists or may be reasonably anticipated that could impair or impact their ability todischarge their duties. Based upon the declarations received from the IndependentDirectors the Board of Directors has confirmed that they meet the criteria ofindependence as mentioned under section 149(6) of the Act and Regulation 16(1)(b) of theListing Regulations and that they are independent of the management.

In the opinion of the Board there has been no change in thecircumstances which may affect their status as Independent Directors of the Company andthe Board is satisfied of the integrity expertise and experience (including proRs.ciencyin terms of Section 150(1) of the Act and applicable rules thereunder) of all IndependentDirectors on the Board. Further in terms of Section 150 read with Rule 6 of the Companies(Appointment and Qualification of Directors) Rules 2014 as amended IndependentDirectors of the Company have included their names in the data bank of IndependentDirectors maintained with the Indian Institute of Corporate Affairs.

During the year under review Mr. Ramesh N. Subramanyam ChiefFinancial Officer and Key Managerial Personnel (KMP) of the Company tendered hisresignation w.e.f. close of business hours on December 31 2021. The Board places onrecord its appreciation for the valuable contribution and guidance of Mr. Subramanyamduring his tenure as Chief Financial Officer. Mr. Sanjeev Churiwala has been appointed asthe Chief Financial Officer and designated as KMP of the Company w.e.f. January 1 2022.

In terms of Section 203 of the Act following are the KMP of theCompany as on March 31 2022:

• Dr. Praveer Sinha CEO and Managing Director

• Mr. Sanjeev Churiwala Chief Financial Officer

• Mr. Hanoz M. Mistry Company Secretary

11. ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITSCOMMITTEES AND INDIVIDUAL DIRECTORS

The Board of Directors has carried out an annual evaluation of its ownperformance board committees and individual directors pursuant to the provisions of theAct and the Listing Regulations. The performance of the Board was evaluated by the Boardafter seeking inputs from all the Directors based on criteria such as the boardcomposition and structure effectiveness of board processes information and functioningetc. The performance of the Committees was evaluated by the Board after seeking inputsfrom the Committee members based on criteria such as the composition of Committeeseffectiveness of Committee meetings etc.

In a separate meeting of Independent Directors performance ofNon-Independent Directors the Board as a whole and the Chairman of the Company wasevaluated taking into account the views of the Executive Director and NEDs. The NRCreviewed the performance of individual directors on the basis of criteria such as thecontribution of the individual director to the Board and Committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. The above criteria are broadly based on the Guidance note onBoard Evaluation issued by the Securities and Exchange Board of India on January 5 2017.

In a subsequent Board meeting the performance of the Board itsCommittees and individual Directors was also discussed. Performance evaluation ofIndependent Directors was done by the entire Board excluding the Independent Directorbeing evaluated.

12. POLICY ON BOARD DIVERSITY AND DIRECTOR ATTRIBUTES AND REMUNERATIONPOLICY FOR DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

In terms of the provisions of Section 178(3) of the Act and Regulation19 read with Part D of Schedule II to the Listing Regulations the NRC is responsible fordetermining qualification positive attributes and independence of a Director. The NRC isalso responsible for recommending to the Board a policy relating to the remuneration ofthe Directors KMP and other employees. In line with this requirement the Board hasadopted the Policy on Board Diversity and Director Attributes which is provided inAnnexure - I to this Report and Remuneration Policy for Directors KMP and other employeesof the Company which is reproduced in Annexure - II to this Report.

13. BOARD AND COMMITTEES OF THE BOARD

Board Meetings:

8 Board Meetings were held during the year under review. For furtherdetails please refer to the Report on Corporate Governance which forms a part of thisAnnual Report.

Committees of the Board:

The Committees of the Board focus on certain specific areas and makeinformed decisions in line with the delegated authority.

The following statutory Committees constituted by the Board functionaccording to their respective 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 heldfor respective Committees are given in the Report on Corporate Governance which forms apart of this Annual Report.

The Company has adopted a Code of Conduct for its employees includingthe Managing Director. In addition the Company has adopted a Code of Conduct for itsNon-Executive Directors which includes Code of Conduct for Independent Directors whichsuitably incorporates the duties of Independent Directors as laid down in the Act. Thesame can be accessed using the following link: https://www.tatapower.com/pdf/aboutus/Code-of-Conduct-NEDs.pdf. All Senior Management personnel haveafirmed compliance with the Tata Code of Conduct (TCoC). The CEO & Managing Directorhas also confirmed and certified the same. The certification is enclosed as Annexure - Iat the end of the Report on Corporate Governance.

14. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Your Company is a pioneer in propagating energy conservation andoperational efficiency with the objective of providing substantial benefit to customers inthe form of reduced emissions pollutants and deliver cost effective and environmentfriendly energy solutions. In Mumbai License area a unique consumer initiative called‘Be Green' under Demand Side Management (DSM) was launched for residentialcustomers to purchase energy efficient appliances at discounted prices and doorstepdelivery. More than 6500 appliances were delivered in FY22. It is our endeavour toincorporate cutting-edge energy efficiency technologies in our programs. These initiativeshave been discussed in detail in the information on conservation of energy and technologyabsorption stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies(Accounts) Rules 2014 as amended from time to time attached as Annexure - III to thisReport.

15. CORPORATE GOVERNANCE

Pursuant to Regulation 34 of the Listing Regulations Report onCorporate Governance along with the certificate from a Practicing Company Secretarycertifying compliance with conditions of Corporate Governance forms part of this AnnualReport.

16. VIGIL MECHANISM

Your Company believes in the conduct of the affairs of its constituentsin a fair and transparent manner by adopting the highest standards of professionalismhonesty integrity and ethical behaviour. In line with the TCoC any actual or potentialviolation howsoever insignificant or perceived as such would be a matter of seriousconcern for the Company. The role of the employees in pointing out such violations of theTCoC cannot be undermined.

Pursuant to Section 177(9) of the Act a vigil mechanism wasestablished for directors and employees to report to the management instances of unethicalbehaviour actual or suspected fraud or violation of the Company's code of conductor ethics policy. The Vigil Mechanism provides a mechanism for employees of the Company toapproach the Chief Ethics Counsellor / Chairman of the Audit Committee of Directors of theCompany for redressal. No person has been denied access to the Chairman of the AuditCommittee of Directors.

17. RISK MANAGEMENT

The Board has formed a Risk Management Committee to frame implementand monitor the risk management plan for the Company. The Committee is responsible formonitoring and reviewing the risk management plan and ensuring its effectiveness. TheAudit Committee of Directors has additional oversight in the area of financial risks andcontrols. The major risks identified by the businesses and functions are systematicallyaddressed through mitigating actions on a continuing basis. Furthermore your Company hasset up a robust internal audit function which reviews and ensures sustained effectivenessof IFC by adopting a systematic approach to its work. The development and implementationof risk management policy has been covered in the Integrated Report (Pages 36-39).

Internal Financial Control Systems and their Adequacy

Your Company's internal control systems are commensurate with thenature of its business the size and complexity of its operations and such IFCs withreference to the Financial Statements are adequate. Your Company has implemented robustprocesses to ensure that all IFCs are effectively working. For details on IFC systemsplease refer Integrated Report (Page 37).

18. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS

No significant and materials orders were passed by the regulators orcourts or tribunals impacting the going concern status and your Company's operationsin future.

There was no application made or proceeding pending against the Companyunder the Insolvency and Bankruptcy Code 2016 (31 of 2016) during the year under review.

19. STATUTORY AND BRANCH AUDITORS

S R B C & CO. LLP (SRBC) (ICAI Firm Registration Number: 324982E /E300003) who are the statutory auditor of your Company hold office until the conclusionof the 103rd AGM to be held on July 7 2022.

Pursuant to the provisions of Sections 139 142 and other applicableprovisions if any of the Act (including any statutory modification or re-enactmentthereof for the time being in force) and the Companies (Audit and Auditors) Rules 2014as amended from time to time SRBC are proposed to be re-appointed as Statutory Auditorsof the Company for a second term of five years to hold office from the conclusion of the103rd AGM till the conclusion of the 108th AGM in 2027 subject to approval of Members inthe ensuing AGM. The necessary resolutions for re-appointment of SRBC form part of theNotice convening the ensuing AGM scheduled to be held on July 7 2022.

The Company has in its Notice convening AGM sought approval from theMembers for passing a resolution vide item No. 19 authorizing the Board to appoint BranchAuditors of any Branch office of the Company whether existing or which may beopened/acquired outside India to act as Branch Auditors.

20. STATUTORY AUDITOR'S REPORT

The standalone and the consolidated financial statements of the Companyhave been prepared in accordance with Ind AS notified under Section 133 of the Act.

The Statutory Auditor's report does not contain anyqualifications reservations adverse remarks or disclaimers. The Statutory Auditors ofthe Company have not reported any fraud to the Audit Committee as specified under section143(12) of the Act during the year under review.

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 (FirmRegistration No 000212) Cost Accountants as Cost Auditors of the Company for conductingcost audit for FY23. A resolution seeking approval of the Members for ratifying theremuneration of Rs. 650000 (Rupees Six lakh Rs.fty thousand) plus applicable taxestravel and actual out-of-pocket expenses payable to the Cost Auditors for FY23 isprovided in the Notice to the ensuing AGM. Maintenance of cost records as specified by theCentral

Government under section 148 (1) of the Act is not applicable to theCompany. The Cost Audit Report does not contain any qualifications reservations adverseremarks or disclaimers.

22. SECRETARIAL AUDIT REPORT

M/s. Makarand M. Joshi & Co. Company Secretaries (Peer ReviewNumber: P2009MH007000) were appointed as Secretarial Auditors of your Company to conducta Secretarial Audit of records and documents of the Company for FY22. TheSecretarial Audit Report confirms that the Company has complied with the provisions of theAct Rules Regulations and Guidelines and that there were no deviations ornon-compliances. The Secretarial Audit Report is provided in Annexure-IV to this Report.

The Secretarial Audit Report does not contain any qualificationsreservations adverse remarks or disclaimers. As per the requirements of the ListingRegulations Practicing Company Secretaries of the material unlisted subsidiaries of theCompany have undertaken secretarial audits of such subsidiaries for FY22. The AuditReports of such material unlisted subsidiaries confirm that they have complied with theprovisions of the Act Rules Regulations and Guidelines and that there were no deviationsor non-compliances. The Secretarial Audit Reports of the unlisted material subsidiariesviz. Tata Power Delhi Distribution Limited Tata Power Solar Systems Limited and WalwhanRenewable Energy Limited have been annexed to this Report.

23. SECRETARIAL STANDARDS

The Company has devised proper systems to ensure compliance with theprovisions of all applicable Secretarial Standards issued by the Institute of CompanySecretaries of India and that such systems are adequate and operating effectively.

24. LOANS GUARANTEES SECURITIES AND INVESTMENTS

Your Company being an infrastructure company is exempt from theprovisions as applicable to loans guarantees securities and investments under Section186 of the Act. Therefore no details are required to be provided.

25. RELATED PARTY TRANSACTIONS

In line with the requirements of the Act and the Listing Regulationsthe Company has formulated a Policy on Related Party Transactions and the same can beaccessed using the following link: https://www.tatapower.com/pdf/aboutus/rpt-policy-framework-guidelines.pdf.

During the year under review all transactions entered into withrelated parties were approved by the Audit Committee of Directors. Certain transactionswhich were repetitive in nature were approved through omnibus route. There were nomaterial transactions of the Company with any of its related parties. Therefore thedisclosure of Related Party Transactions as required under Section 134(3)(h) of the Act inForm AOC-2 is not applicable to the Company for FY22 and hence the same is not requiredto be provided.

26. SUSTAINABILITY

Your Company is committed to the Tata Group values and thenation's vision for sustainable growth and energy security for all. Your Companystays on the path to progressive practices and societal imperatives in alignment with UNSDGs. Your Company is also conscious of rising gen-next consumer sentiment aroundenvironmentally responsible lifestyle and consumption and has created multiple productsand services that enable customers to make small changes today for a greener tomorrow.

Nearly 1/3rd of your Company's generating capacity comes from cleanenergy sources like solar wind and hydro. Your Company aims to be a significantcontributor to India's promise on Carbon Net Zero by 2045 with an additional targeton Water neutrality and Zero Waste to Landfill before 2030. Your Company's efforts onthis path have been validated and acknowledged by external ESG experts with your Companyconsistently leading the Energy sector rankings domestic and global. Your Companyrepresented India to co-create the Global SDG roadmap for electric utilities with WBCSD(World Business Council for Sustainable Development) along with 10 other global energyutilities.

26.1 CARE FOR OUR COMMUNITY/COMMUNITY RELATIONS

As the country's oldest and leading integrated energy utilityyour Company today serves millions of lives through its business value chain and thesocial development and ecological initiatives seeded through the Tata Power CommunityDevelopment Trust (TPCDT). Our ethos of nation building finds visibility through our focuson women empowerment and inclusive growth. Your Company has been working on three thrustareas viz. Education (including Financial and Digital Literacy) Employability andEmployment (including skill training for livelihoods) and Entrepreneurship (includingmicro-enterprise through Self-Help Groups). In addition special programs aroundAffirmative Action (AA) and Disabilities including Autism Care help further the inclusivegrowth commitment.

Your Company enlists support from all its employees to run a wide anddeep volunteering program (Arpan) through which multiple Bio-diversity conservationefforts including Tree Mittra (to conserve native species) and Club Enerji (to developyoung conservation champions) are ampliRs.ed and clock over one lakh volunteering hoursannually.

Your Company has been committed to long-term sustainable conservationefforts most notable among them being 50 years of Mahseer conservation (which led to theDeccan Mahseer moving from endangered to Least Concern status) in Maharashtra. YourCompany is also working in Odisha to raise awareness around Elephant Conservation. InFY22 your Company's flagship programmes enabled an impact for lakhs of community membersin over 60 districts spread across 17 states including 10 aspirational districts (asdefined by Government of India) and multiple marginalized communities served under ourTata AA efforts.

As a part of its COVID-19 response initiatives your Company reachedout to all possible geographical clusters across 16 states and union territories(UT) and also enabled COVID and disaster response support like insurance and vaccinationsupport aided by a multi-lingual live helpline in the country.

The Company's relief and resilience measures supported over 1.90 lakhcommunity members and more than 150 public institutions in underserved areas around 65+operating sites 6+ aspirational districts; strengthening the abilities of PHCssub-centres local hospitals district administrators sarpanches police; ANMsaanganwadi workers temporary Covid relief centres CSR teams volunteers Self-Help Group(SHG) women and others in our local ecosystems.

Flagship initiatives undertaken across various locations during FY22can be summarized as below:

• Financial inclusivity (Adhikaar) program was undertaken acrossall major locations with nearly 3 lakh beneficiaries covered with resources worthRs. 200 crore accessed under various Government schemes by communities. A unique model hasbeen furthered under #Adhikaar - training and empowering more than 840 'Adhikaarpreneurs'who earn livelihoods while acting as local community change agents to lead transformation.

• 2300 SHG (women) covering 16000 members involved in variousflagship initiatives such as Anokha Dhaaga Abha Roshni and Adhikaar with 5000+ membersare active economic value generating members through semi-organized income generatingactivities with cumulative turnover of Rs. 2.3 crore across sites for all SHGs. A uniqueblend of Reduce Re-use and Recycle has been adopted piloted and deployed with SHGmembers in Maharashtra and Jharkhand focussing on products made from recycled papers.

• With core focus on addressing skill-gap challenge your Company has trainednearly 1 lakh youth through uniquely created integrated skilling centres (Roshni) ensuring75% of placement to eligible youth.

• Over 45000 youth were skilled through Tata Power Skill Development Institute(Roshni). Of which 25% youth from AA community were benefitted from the intervention. YourCompany has also launched and signed MoU for Skill Park in Kerala.

• Through its Tree Mittra program over 8.5 lakh saplings are planted by itsvolunteers and partners year on year - covering multiple sites.

The CSR policy of the Company has been provided on the Company'swebsite at https://www.tatapower.com/pdf/ aboutus/csr-policy.pdf.

The Company's standalone CSR spend for FY22 stood at Rs. 2.09crore (i.e. 2% CSR obligation). Details of the consolidated CSR activities of your Companyand its key subsidiaries are described in Communities section of Integrated Report (Pages62-67) as well as in the Business Responsibility and Sustainability Report (BRSR). Theannual report on CSR activities (standalone) is provided in Annexure - V to this Report.On a consolidated basis the Company's Group entities expenditure on CSR activities stoodat Rs. 32.77 crore against the CSR obligation of Rs. 40.30 crore (calculated as perSection 135 of the Act) in FY22. The balance unspent of CSR obligation has beentransferred to Special Bank Account in compliance with the provisions of the Act.

26.2 AFFIRMATIVE ACTION

As a part of AA your Company continued particular focus on SocialInclusivity and AA commitment targeted outreach to families from Scheduled Castes (SC)Scheduled Tribes (ST) Other Backward Classes (OBC) migrant families sanitation workersdifferently abled as well as other such disadvantaged communities. In alignment to Tataphilosophy your Company remains committed to the upliftment of the most marginalizedcommunities and groups through defined Es- Entrepreneurship Employability and Employmentand Education around the operating sites. In its journey your Company continued workingwith local vendors and promoting inclusion of SC/ST in the business opportunities. This isdriven by Corporate Contracts department with a single point of contact at the corporatelevel as well as at division/site level to facilitate inclusion of SC/ST vendors. AAprocess for vendor enlistment and ordering was deployed to encourage and evolveentrepreneurship skill among the communities and enable them to be a part of businessecosystem. It also made them compete with positive discrimination element by offering aprice preference of 5% over the L1 bidder and gives incentive of 1% of contract value forengaging 50% workforce from SC/ST community. Your Company also promoted entrepreneurshipat community level by supporting enterprise development. In FY22 business worth Rs. 9.63crore was given to 24 vendors from SC/ST community.

26.3 SUSTAINABILITY REPORTING

Your Company has voluntarily adopted the International IntegratedReporting Council (IIRC)-IR Framework to prepare its third Integrated Report FY22 as perSEBI recommendations in February 2017. Your Company has also voluntarily prepared theBusiness Responsibility and Sustainability Report (BRSR) a year before the mandate by SEBIin May 2021 for the top 1000 listed companies (by market capitalization) to report onBRSR by FY23. The content of the report is in accordance with the Global ReportingInitiative (GRI) 2021 standards and aligns to the National Voluntary Guidelines (NVG) onSocial Environmental and Economic responsibilities of the business as well as the UnitedNations Sustainable Development Goals (SDGs). The Integrated Report communicates yourCompany's performance on financial and non-financial aspects to all stakeholdersunderlying the priority of our leadership and strategy towards value creation as well ascommitment to a more sustainable future with low-carbon smart energy solutions giving morepower to you.

1. Environment

Your Company continues to strive for efficiency in operations andmaintenance through adoption of best practices optimizing its efficiency parameters likeheat rate and auxiliary power consumption resulting in lower resource consumption andlower carbon emissions. Continuing its path to be a pioneer for environmental stewardshipin the power industry your Company further focusses on efficient use of water prudentrecycling and waste disposal measures and remains committed to comply with regulations.Your Company also has been strategically focussing on scaling up renewables businessventuring into new energy efficient green business initiatives like Microgrids EVcharging Home Automation Solar Rooftop as well as exploring new opportunities indistribution businesses. All these initiatives reinforce your Company's commitmenttowards sustainable 'Green' growth and encouraging the customer to avail energy efficientfuture-ready smart energy solutions. A brief outline of your Company's effortstowards protection of environment and biodiversity is given in the Environment section ofIntegrated Report (Pages 76-83).

2. Health and Safety

Your Company is consciously committed to health and safety of allemployees and other stakeholders with a defined safety vision 'To be a leader in SafetyExcellence in the global power and energy business'. Your Company employs a pro-active andpre-emptive approach to occupational health and safety and is committed to actively drivethe agenda through the length and breadth of the organization. Consequently 100% of youremployees and contractual workforce are trained on various aspects of Occupational Healthand Safety. Close monitoring of safety performance has also helped your Company to achievedesired goal of zero injuries and fatalities. Suraksha mobile app is one such monitoringintervention that enables employees to conveniently report unsafe conditions and similarprovision for reporting of unsafe conditions has been made available to contractualworkforce through Stakeholder Suraksha Application. Furthermore your Company has alreadystarted venturing towards application of advanced technologies like digitizatione-enablement of safety processes usage of drones remote monitoring safe systems forhigh-risk activities etc. to eliminate and minimize the risks associated with variousactivities for betterment of safety performance. More deployment of advanced technologiesskill set and behavioral interventions are planned in the near future for furtherenhancement of safety performance. A detailed description of Health and Safety initiativestaken by your Company is outlined in Employee section of Integrated Report (Pages 68-75).

3. Customer Relationship

Your Company is working consistently towards a dedicated theme ofenergizing and sensitizing customers for smart and future-ready energy solutions to ensurea sustainable future. Relationships with customers play a crucial role in our valuecreation journey. The focus in our routine operations revolves around our customeraffection statement 'To earn the affection of customers by delivering superior value andsuperior experience thereby making them ambassadors'. Your Company ensures 100% health andsafety communication for products and services through safety signage in and aroundsubstations and public places.

Your Company customises product and service delivery as per customerneeds and offering customers a combination of power supply sources to minimise costs.Multiple technical solutions (basis study conducted by IIT Mumbai) have been implementedto reduce voltage fluctuations. Measures were also implemented to reduce cost which wasreflected in the reduced tariff proposal in the Multi Year Tariff (MYT) petition.

Your Company has an Internal Grievance Redressal Cell for customers tolodge complaint in case of any dissatisfaction. As of March 31 2022 there have been0.011% of customer complaints or consumer cases pending beyond the turnaround time inMumbai Distribution area.

Your Company has also been a pioneer in leveraging digital technologyto serve customers efficiently. Few of such initiatives are Know Your Energy Consumption(KYEC) Webchat integrated chatbot TINA e-Nach all women customer relations centre etc.Webchat integrated chatbot TINA went live on customer portal since January 2021 throughwhich consumers can have live communication with Company officials. Furthermore throughimplementation of e-billing your Company reinforces its commitment towards saving oftrees and ecosystem. Since the inception of this initiative around 3.4 lakh customersopted for e-billing in Mumbai license area resulting in saving of approximately 5960trees. A detailed description of your customer relation measures is given in the Customerssection in the Integrated Report (Pages 52-59).

4. Human Resource Management

A key area of focus for your Company is to create a performance drivenworkforce while ensuring the health and well-being of employees and their families. Manypolicies and benefits were implemented to maximize employee engagement and welfare. YourCompany also continues to endeavour to create a work environment which is collaborativeand learning and growth oriented to enable employees to perform at their full potential.Our Human Resource (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 aim to develop competencies to rise to new challengesespecially posed by ventures into new business areas and renewable energy. Some of the keyHR programmes of your Company are Talent Next Youth Power Confluence Gyankosh Rewardand Recognition etc. A detailed description is given in the Employee section of theIntegrated Report (Pages 68-75).

26.4 BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT (BRSR)

The Company has provided BRSR in lieu of Business Responsibility Reportand the same is in line with the SEBI requirement based on the ‘National VoluntaryGuidelines on Social Environmental and Economic Responsibilities of Business'notified by Ministry of Corporate Affairs (MCA) Government of India in July 2011 and theamendment to Listing Regulations in May 2021. Your Company reported its performance forFY22 as per the BRSR framework describing initiatives taken from an environmental socialand governance perspective.

As per Regulation 34 of the Listing Regulations a BRSR is a part ofthis Annual Report. Since the Company is publishing Annual Report under IntegratedReporting Council Framework (IIRC) report on the nine principles of the NationalVoluntary Guidelines on social environmental and economic responsibilities of business asframed by the MCA is provided in relevant sections of IR with suitable references to theBRSR.

26.5 PREVENTION OF SEXUAL HARASSMENT

Disclosures in relation to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 have been provided in the Report onCorporate Governance as well as MD&A.

27. ANNUAL RETURN

Pursuant to Section 92 of the Act and Rule 12 of the Companies(Management and Administration) Rules 2014 the Annual Return is available on the websiteof the Company on the following link: https://www.tatapower.com/pdf/investor-relations/Annual-Return-MGT-21-22.pdf.

28. PARTICULARS OF EMPLOYEES AND REMUNERATION

The information required under Section 197(12) of the Act read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is attached as Annexure - VI.

Statement containing the particulars of top ten employees and theemployees drawing remuneration in excess of limits prescribed under Section 197(12) of theAct read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is an annexure forming part of this Report. In terms ofthe proviso to Section 136(1) of the Act the Report and Accounts are being sent to theMembers excluding the aforesaid annexure. The said statement is also available forinspection with the Company. Any Member interested in obtaining a copy of the same maywrite to the Company Secretary at investorcomplaints@tatapower.com.

Officers of the organisation are classified into five management worklevels i.e. MA MB MC MD and ME. The work levels are further divided into grades.Non-management employees are across different grades and also have been classified asunskilled semi-skilled skilled and highly skilled.

29. DEPOSITS

The Company has not accepted any deposits from public and as such noamount on account of principal or interest on deposits from public was outstanding as onthe date of the Balance Sheet.

30. FOREIGN EXCHANGE - EARNINGS AND OUTGO

( Rs.in crore)

Particulars - Standalone FY22 FY21#
Foreign Exchange Earnings 4656 809
Foreign Exchange Outflow mainly on account of: 4714 4891
• Fuel purchase 4678 4745
• Interest on foreign currency borrowings NRI dividends 5 4
• Purchase of capital equipment components and spares and other miscellaneous expenses 31 142

# Restated due to CGPL and Af-Taab merger

31. ACKNOWLEDGEMENTS

On behalf of the Directors of the Company I would like to place onrecord our deep appreciation to our shareholders customers business partners vendors(both international and domestic) bankers financial institutions and academicinstitutions for all the support rendered during the year. The Directors are thankful tothe Government of India the various ministries of the State Governments the Central andState Electricity Regulatory authorities communities in the neighbourhood of ouroperations municipal authorities of Mumbai and local authorities in areas where we areoperational in India; as also partners governments and stakeholders in internationalgeographies where the Company operates for all the support rendered during the year.

The Directors regret the loss of life due to COVID-19 pandemic and aredeeply grateful and have immense respect for every person who risked their life and safetyto Rs.ght this pandemic.

Finally we appreciate and value the contributions made by all ouremployees and their families for making the Company what it is.

.