Your Directors are pleased to present the Sixteenth Annual Report of the Company together with the Audited Financial Statements for the Financial Year ended March 31 2020.
1. OPERATIONAL & FINANCIAL HIGHLIGHTS
The Management Discussion and Analysis Report for FY 20 is part of the Annual Report and explain the operating and financial performance of the business for the year.
Summary of the financial results of the Company for the year under review is as under:
(Rs in Crore except per share data)
|FY 20||FY 19||FY 20||FY 19|
|Profit before Tax and Exceptional item||1546||1248||1475||1264|
|Profit Before Tax||546||1248||475||1264|
|Total Comprehensive Income for the year (after non-controlling interest)||1209||883||1145||893|
|Add: Balance brought forward||4587||3379||4620||3405|
|Add: Impact on adoption of Ind AS 115||-||649||-||648|
|Balance available for Appropriation||5796||4911||5765||4946|
|Transfer to specific reserves||62||36||62||36|
|Dividend paid (including dividend distribution tax)||959||288||962||290|
|Balance carried to Balance Sheet||4775||4587||4741||4620|
|Basic and Diluted Earnings per Share (Rs per share)||26||19||24||19|
2. SCHEME OF ARRANGEMENT
During the year the Company entered into Scheme of Arrangement with TCL Cables Private Limited (wholly owned subsidiary of the Company) for transfer and vesting of its Cables Business Undertaking on a going concern basis by way of a slump sale as per the terms and conditions of the Scheme for a cash consideration of Rs 214.50 Crore subject to working capital adjustment on transfer. The appointed date for transfer is April 01 2020. The Company has received approvals from both the stock exchanges (NSE & BSE) with BSE being designated stock exchange. The Company has filed an application with National Company Law Tribunal (NCLT) Ahmedabad for approval of the Scheme.
The Company as a policy endeavours to distribute approx. 30% of its consolidated annual profits after tax as dividend in one or more tranches. The Board of Directors on February 12 2020 declared interim dividend of Rs 11.60 per equity share (including Rs 5.00 per equity share as a special dividend) on 480616784 equity shares for FY 20 (PY Rs 5.00 per equity share) amounting to Rs 557.51 Crore (PY Rs 240.31 Crore). The Board has not considered any further dividend for the year.
The Company paid Dividend Distribution Tax of Rs 114.60 Crore (PY Rs 49.40 Crore) on the above dividend; the total outflow on account of dividend was Rs 672.11 Crore (PY Rs 289.71 Crore). Excluding the special dividend of Rs 5.00 per equity share the dividend distribution was Rs 382.41 Crore i.e. 33.26% (PY 32.28%) of consolidated total comprehensive income for FY 20 after the provision for impairment of DGEN Power Plant. It may be noted that the said provision is a non-cash charge not impacting the cashflows of the current or future years.
The Dividend Distribution Policy of the Company can be accessed at the Company's website.
4. TRANSFER TO RESERVES
The Company has not transferred any amount to the Reserves for the year under review other than Rs 62 Crore to certain specific reserves as described in Statement of Changes in Equity as part of Standalone Financial Statements.
During the year CRISIL upgraded the long term credit rating of the Company from AA-/Stable to AA/Stable and reaffirmed the short term credit rating at A1+. Additionally India Ratings assigned short term rating of IND A1+ to Commercial Papers programme of Rs 850 Crore. The Company raised Rs 1078 Crore of new long term debt including through secured and unsecured Non-convertible Debentures (NCDs) mainly to finance ongoing capital expenditure in its distribution businesses and repaid Rs 1635 Crore of long term debt thus reducing the long term debt by Rs 557 Crore. The Company also tied up incremental working capital lines (fund and non-fund based) of Rs 839 Crore i.e. increased it from Rs 3111 Crore to Rs 3950 Crore.
New long term debt raised included Rs 370 Crore by way of issuance of NCDs on private placement basis as per the details mentioned below:
|Description of NCDs||Date of Allotment||Number of NCDs issued||Face Value and Issue Price||Amount raised||Coupon Rate||Maturity Date|
|(Rs in Lakh)||(Rs in Crore)||(Series wise) |
|Unsecured Rated Listed Taxable Non-Cumulative Redeemable NCDs||May 14 2019||2700||10||270||10.25% p.a.||A - May 13 2022|
|B - May 12 2023|
|C - May 14 2024|
|Secured Rated Listed Taxable Non-Cumulative Redeemable NCDs||March 19 2020||1000||10||100||7.65% p.a.||March 17 2023|
Outstanding long term debt as on March 31 2020 was Rs 8898 Crore details of which are provided in Note 22 to the Consolidated Financial Statements. The consolidated debt to equity (including deferred tax liability) ratio as at the end of FY 20 was 0.92 (PY 0.90). The particulars of loans given guarantees provided and investments made are disclosed in Note 55 to the Standalone Financial Statements.
6. SUBSIDIARIES ASSOCIATES AND JOINT VENTURES
The Board has reviewed the affairs of the Company's subsidiaries and associates at regular intervals. In accordance with section 129(3) of the Companies Act 2013 the Company has prepared Consolidated Financial Statements incorporating the Financial Statements of all subsidiaries which form part of the Annual Report. Further a statement containing salient features of the Financial Statements of the Company's subsidiaries and associates is given in prescribed Form AOC-1 which forms part of the Annual report at page no. 249. The said Form also highlights the financial performance of each of the subsidiaries and associate companies included in the Consolidated Financial Statements.
Details pertaining to companies that ceased to be the associates of the Company during the year are provided in Note no. 41 of the notes to the Consolidated Financial Statements forming part of the Annual Report.
In accordance with section 136(1) of the Companies Act 2013 the Financial Statements of the subsidiary and associate companies are available for inspection by the Members at the Registered Office of the Company during business hours on all days except Saturday Sunday and Public Holiday. Any person desirous of obtaining said Financial Statements may write at firstname.lastname@example.org. The Annual Report of the Company and Audited Financial Statements of each of the subsidiary companies have been placed on the website of the Company at www.torrentpower.com.
7. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
Pankaj Joshi IAS Director resigned wef December 17 2019 due to his transfer within the Government. The Board places on record its appreciation for the guidance and support provided by him during his tenure as a member of the Board.
Government of Gujarat holding 11.22% equity shares of the Company as at end of the year nominated Sunaina Tomar IAS - Principal Secretary Energy and Petrochemicals Department (DIN: 03435543) on the Board of the Company in place of Pankaj Joshi IAS and the Board at its meeting held on February 12 2020 appointed her as Additional Director wef February 13 2020 till the commencement of ensuing Annual General Meeting (AGM). The Board hereby recommends her appointment as Director liable to retire by rotation wef the ensuing AGM i.e. August 06 2020. As per the provisions of the Companies Act 2013 Samir Mehta (DIN: 00061903) Director retires by rotation at the ensuing AGM and being eligible has offered himself for re-appointment. A brief resume and other relevant details of Samir Mehta are given in the Explanatory Statement to the Notice convening the AGM.
The Board at its meeting held on May 15 2019 appointed Rahul Shah as Company Secretary & Whole-time KMP of the Company wef May 16 2019 in place of Samir Shah who took up another role in the Company.
8. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declaration from the Independent Directors confirming that they meet the criteria of independence as prescribed under Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. Independent Directors are in compliance with the Code of Conduct prescribed under Schedule IV of the Companies Act 2013.
9. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION POLICY
The Nomination and Remuneration Committee (NRC) has approved the following criteria and process for identification / appointment of Directors:
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 concerning the 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 Chairperson of the Company meeting the above criteria. If the Chairperson deems fit necessary recommendation shall be made by him to the NRC.
ii. Chairperson 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.
The Company has in place a policy relating to the remuneration of the Directors Key Managerial Personnel and other employees of the Company. The policy is available on the website of the Company.
10. 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.
The proforma formats for facilitating the evaluation process of Non-Independent Directors & Board as a whole and Committees were sent to all Independent Directors. A presentation on functioning of the Board and Committees containing the outcome of their evaluation and feedback was reviewed by the Independent Directors in their separate meeting and by the Board. Based on the feedback the Board expressed satisfaction on overall functioning of the Board Committees and performance of Directors.
11. MEETINGS OF THE BOARD COMMITTEES & COMPLIANCE TO SECRETARIAL STANDARDS
The Board meets at regular intervals with gap between two meetings not exceeding 120 days. During the year under review the Board met four times.
The Board has six committees namely Audit Committee (AC) Nomination and Remuneration Committee (NRC) Corporate Social Responsibility Committee (CSR) Stakeholders Relationship Committee (SRC) Risk Management Committee (RMC) and Committee of Directors (CoD). A detailed note on the composition of the Board and its committees (AC NRC and SRC) is provided in the Corporate Governance Report included in the Annual Report. Composition of CSR Committee is given in the Report on CSR Activities (Annexure C). Composition of RMC is provided in this Report in Risk Management section. CoD is a Board Committee to facilitate routine executive decisions and exercise of authority granted by the Board in various matters. The minutes of all the Committee meetings are reviewed at every Board meeting.
During the year the Company has complied with the provisions of Secretarial Standard 1 (relating to meetings of the Board of Directors) and Secretarial Standard 2 (relating to General meetings).
12. DIRECTORS' RESPONSIBILITY STATEMENT
In terms of section 134(3) of the Companies Act 2013 the Board of Directors state that:
a) in preparation of the Financial Statements 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 March 31 2020 and of the profits for the year ended March 31 2020;
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 Financial Statements 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.
The Members at the 13th AGM of the Company had appointed M/s. Price Waterhouse Chartered Accountants LLP as Statutory Auditors of the Company to hold office from the close of the 13th AGM till the conclusion of the 18th AGM. The Auditors' Report for FY 20 forms part of the Annual Report and does not contain any qualification reservation or adverse remark.
Pursuant to section 148(3) of the Companies Act 2013 M/s. Kirit Mehta & Co. Cost Accountants Mumbai had been appointed as Cost Auditors of the Company for FY 20 by the Board of Directors for conducting audit of cost records maintained in respect of electricity and electricals or electronic machinery. Their remuneration was ratified by Members at the 15th AGM of the Company. The Cost Audit Report for FY 19 does not contain any qualification and was filed on August 26 2019 with the Central Government (within the prescribed time limit) pursuant to section 148(6) of the Companies Act 2013.
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 20. The Secretarial Audit Report for FY 20 is annexed herewith as Annexure A.
There are no adverse observations in the Secretarial Audit Report which call for explanation.
14. INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference to Financial Statements. The Statutory Auditors of the Company have audited such controls with reference to Financial Reporting and their Audit Report is annexed as Annexure A to the Independent Auditors' Report under Standalone Financial Statements and Consolidated Financial Statements which forms part of the Annual Report.
15. CORPORATE GOVERNANCE
In compliance with Regulation 34 read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 Report on Corporate Governance forms part of the Annual Report. Certificate of the Auditors regarding compliance with the conditions of Corporate Governance is annexed to the Board's Report as Annexure B.
16. CORPORATE SOCIAL RESPONSIBILITY (CSR)
During FY 20 the Company incured CSR expenditure of Rs 20.36 Crore which was 2% of average net profit for the past three Financial Years. The CSR activities by the Company were under the thrust areas of Community Healthcare Sanitation & Hygiene Education & Knowledge Enhancement and Social Care & Concern. Brief outline of the CSR Policy of the Company and the details of key CSR programs and activities undertaken at Group level are provided in the Report on CSR Activities annexed herewith as Annexure C.
In addition to above the Company continued other social activities during the year the brief details of the same are described hereunder:
- Creating livelihoods
o To contribute towards societal goal of uplifting the local youth of the area 48 unemployed youth with basic primary education were selected from surrounding areas in FY 20. They were imparted an intensive in-house developed training module of 33 working days followed by a structured on-the-job training for one month covering security basic firefighting and computer skills. Post completion of successful training they were absorbed as security guards at SUGEN and DGEN power plants. Till date total 186 such youth have been trained and employed.
o Differently abled persons (with impaired hearing and speech) were trained for routine cleaning of solar panels at GENSU Solar Plant thus providing them a dignified livelihood.
o Employment opportunities for uneducated and destitute locals for horticulture house keeping and canteen work at industrial and office facilities.
- Community Healthcare
During the year Swadhar community healthcare facility was renamed Sumangal and integrated into Rangtarang hospital complex comprising 150 bed paediatric hospital inaugurated in February 2020. Sumangal now operates with an enhanced scope which includes specialized consultations in the areas of dental care ophthalmology dermatology gynaecology physiotherapy and orthopeadic. During FY 20 100311 patients have benifitted from the facility.
The Company made charitable donations amounting to Rs 19.44 Crore to various organisations for activities related to healthcare education arts & culture science relief to disaster victims; socio-economic development including de-addiction skill development self-help groups upliftment of women integrated development of tribes protection of consumer rights building of toilets etc.
The Company has also dontated Rs 15.00 Crore to Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM - CARES Fund) and Rs 35.00 Lakh to various charitable organizations to fight the effects of COVID -19 pandemic and its fallout on poorer sections of the society.
17. ENVIRONMENT HEALTH AND SAFETY (EHS)
The Company accords utmost importance to EHS in its various operations. The key developments concerning EHS during FY 20 include:
AMGEN Power Plant has been awarded the prestigious sword of honour by British Safety Council in October 2019 for its commitment to excellence in occupational health and safety.
Gas based generation plants have implemented 5S Work Place Management System and were certified by Quality Circle Forum of India (QCFI) and Union of Japanese Scientist and Engineers (JUSE).
Kitchen waste of all Company operated canteens was converted into manure through organic waste converter machines.
Extensive plantations of trees and shrubs in all the vacant lands of the Company.
Implemented Behaviour Based Safety (BBS) to develop and inculcate safety as a behavioural aspect of each individual at the gas-based generation plants.
Health talks on common health problems such as Hypertension Diabetes Life Style Diseases Yoga mini marathon etc. were conducted for employees.
Specialized external training workshops were organised by AMGEN power plant for AED (Automated External Defibrillator) AMBU Bag (Artificial Manual Breathing Unit) Cardio Pulmonary Resuscitation (CPR) technique with the practical demonstration awareness for hazards and precautions for COVID-19 electrical safety training for safe isolation mock drills for different kind of emergency scenarios such as body illness fire in office premise etc. E-learning initiatives taken up for EHS training in AMGEN power plant.
Continuing efforts for reducing paper consumption by development of Field Force Application for various activities.
Measurement and monitoring of environmental parameters related to drinking water quality food quality work place noise ambient noise DG stack emission monitoring ambient air quality monitoring and usage of environmental friendly bio-degradable ester oil in place of mineral oil in distribution transformers in densely populated and congested areas to enhance safety and to prevent land contamination.
Moreover the Company has in place the Conviction for Safety policy which provides for substantial compensation to the personnel (employees as well as contractors' labour) and their families who are adversely affected by accidents.
18. VIGIL MECHANISM
The Company has in place a Whistle Blower Policy pursuant to the applicable statutory requirements. The details of the Whistle Blower Policy are explained in the Report on Corporate Governance.
19. N I VESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of sections 124 and 125 of the Companies Act 2013 and Investor Education and Protection Fund (Accounting Audit Transfer and Refund) Rules 2016 as amended from time to time during the year under review the Company has credited unpaid / unclaimed Dividend to IEPF Authority and equity shares to the Demat account of IEPF Authority as per the details mentioned below:
|Financial Year||Unpaid / Unclaimed Dividend transferred||No. of equity shares transferred|
|(in Rs )|
|2011-12 (Final dividend)||10974765.00||183907|
During the year under review the Company has also credited following dividend to IEPF authority against equity shares already transferred:
|Financial Year||Dividend||Amount credited to IEPF||No. of equity shares already transfered|
|(in Rs )||(in Rs )|
|2018-19 (Final dividend)||5.00 per share||8832455.00||1766491|
|2019-20 (Interim dividend)||11.60 per share||22205624.80||1914278|
Members whose shares and unclaimed dividend have been transferred to the IEPF Demat Account or IEPF account as the case may be may claim the shares or apply for refund of dividend by making an application to the IEPF Authority in web Form IEPF-5 (available on http://www.iepf.gov.in). Details of Members whose dividend remained unpaid for 7 consecutive years or more may be accessed at Company's website at www.torrentpower.com.
The details of unpaid / unclaimed dividend lying in the unpaid dividend accounts as on March 31 2020 are mentioned below:
|Sr. No.||Dividend for Financial Year||Due date for transfer to IEPF||Amount of Unpaid / Unclaimed Dividend|
|(in Rs )|
|1.||2012-13 (Final) of erstwhile Torrent Cables Ltd.||August 25 2020||937321.00|
|2.||2012-13 (Final) of Torrent Power Ltd.||August 30 2020||6354982.00|
|3.||2013-14 (Final) of erstwhile Torrent Cables Ltd.||September 02 2021||469672.50|
|4.||2013-14 (Final) of Torrent Power Ltd.||September 02 2021||1779553.50|
|5.||2014-15 (Final) of erstwhile Torrent Cables Ltd.||September 02 2022||308956.00|
|6.||2014-15 (Final) of Torrent Power Ltd.||September 09 2022||5285455.50|
|7.||2015-16 (Interim) of Torrent Power Ltd.||April 15 2023||16162267.50|
|8.||2016-17 (Final) of Torrent Power Ltd.||September 06 2024||12133748.00|
|9.||2017-18 (Final) of Torrent Power Ltd.||September 06 2025||15780585.00|
|10.||2018-19 (Final) of Torrent Power Ltd.||September 10 2026||12135915.00|
|11.||2019-20 (Interim) of Torrent Power Ltd.||March 19 2027||24168971.20|
Note: Torrent Cables Ltd. was amalgamated with Torrent Power Ltd. wef October 01 2015.
The actual amount lying in unpaid dividend accounts alongwith corresponding shares related thereto will be transferred to IEPF Authority within statutory timeline as applicable.
Rahul Shah Company Secretary has been appointed as Nodal Officer of the Company and details of the Nodal Officer are available on the website of the Company at https://www.torrentpower.com/index.php/investors/iepf.
20. BUSINESS RESPONSIBILITY REPORT
As stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Business Responsibility Report forms part of the Annual Report.
21. 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 (RMC) Chief Risk Officer Risk Champions and Risk Co-ordinators. The Risk Management process is reviewed and monitored by the functional heads. RMC meets at least once in a year to review internal and external risks with potential impact and likelihood that may impact the Company in achieving its strategic objectives or may threaten its existence. Composition of RMC consists of member of Board and Senior Management of the Company as provided below:
|Name of Member||Category|
|Samir Barua Chairperson||Independent Director|
|Bhavna Doshi||Independent Director|
|Sanjay Dalal||Chief Financial Officer|
Management and Discussion Analysis section of the Annual Report identifies the key risks which can affect the performance of the Company.
22. 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 annexed herewith as Annexure D and in the section on Related Party Transactions in the Report on Corporate Governance.
23. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The details in terms of section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended from time to time are forming part of this Report as Annexure E.
24. PROTECTION OF WOMEN AGAINST SEXUAL HARASSMENT AT WORK PLACE
The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
25. THE EXTRACT OF THE ANNUAL RETURN
The extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure F to this Report.
26. 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 which forms part of this Report.
27. OTHER DISCLOSURES
During the year under review the Company has neither accepted nor renewed any fixed deposits.
During the year under review there are no changes in the nature of business.
There are no material changes and commitments affecting the financial position of the Company which has occurred between end of financial year i.e. March 31 2020 and the date of Directors' Report i.e. May 18 2020.
No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and the Company's operation in future.
28. APPRECIATION AND ACKNOWLEDGEMENTS
The Board of Directors is pleased to place on record its appreciation for the continued support received from all stakeholders including government regulatory authorities and financing institutions. The Board is thankful to the members and employees for their unstinted support and contribution. The Directors regret the loss of life due to COVID-19 pandemic and have immense respect for every person who risked their life and safety to fight this pandemic.
For and on behalf of the Board of Directors
|May 18 2020||Samir Mehta|