The Directors are pleased to present the Thirteenth Annual Report of the Company together with the Audited Accounts for the financial year ended 31st March, 2017
The key highlights for the Financial Year 2016-17 are:
- Financial performance of the Company on consolidated basis: o Decrease in Total Income by 14.61% to Rs,10,244.44 Crore o Decrease in PBDIT by 20.71% to Rs,2,651.18 Crore
o Decrease in Total Comprehensive Income (after Non-controlling interest) by 52.70% to Rs,422.58 Crore
- The Distribution Franchise Agreement with MSEDCL for distribution of power in Bhiwandi Circle has been renewed for a further period of 10 years w.e.f. January 26, 2017.
- Hon’ble GERC, vide Tariff Order dated 31st March, 2016, had allowed recovery of Regulatory Charge @ ''''0.45 per unit to address the gap of earlier years. Subsequently, vide order dated 1st July 2016, Hon’ble GERC reduced the same to ''''0.18 per unit and ''''0.17 per unit for Ahmadabad and Surat respectively against which the Company had filed an appeal before Hon’ble Appellate Tribunal For Electricity (APTEL). Hon’ble APTEL, vide order dated 30th March, 2017 and without expressing any opinion on the merits of the case, set aside the order dated 1st July 2016 and remanded the matter back to Hon’ble GERC with a direction that members who passed the original tariff order dated 31st March, 2016 shall hear afresh the review petitions filed with respect to the order and shall pass appropriate orders. Accordingly, it is expected that the True-up order for FY 2015-16 and Tariff order for FY 2017-18 would be passed by Hon’ble GERC only after an appropriate order w.r.t the tariff order dated 31st March, 2016 is issued.
- The Storage-cum-degasification capacity contracted at Petronet LNG Limited’s Dahej Terminal has commenced from 1st April, 2017. The Company has contracted 7 LNG cargoes to be imported during April 2017 to December 2017 to meet its generation obligations.
- Hon’ble Central Electricity Regulatory Commission (CERC) has issued tariff orders dated 18th August, 2016 and 31st March, 2017 for the tariff period 2014-19 for UNOSUGEN and DGEN Plants respectively.
- After the successful launch of ‘Torrent Power Connect’, the online service portal as well as mobile application, the Company has upgraded the infrastructure and service quality at the new model Service Centre ‘PLUGPOINT’ in Ahmadabad area, on a pilot basis. The new Service Centre provides a complete digital service experience to the customers at large.
- 216 MW Wind Power Projects, comprising 201.6 MW at Nakhatrana and Jamanwada Sites in Kutch district and 14.4 MW at Mahidad Site in Rajkot district, have been successfully commissioned during the year. Further, wind power projects consisting of 50.4 MW at Mahuva Site in Bhavnagar district and 46.4 MW at Mahidad Site in Rajkot district are under implementation. The Company has also enhanced the capacity at GENSU Solar Power plant from 81 MW to 87 MW. With this, the total operational and under-construction renewable power capacity of the Company has crossed 500 MW.
Summary of the financial results of the Company for the year under review is as under:
(Rs, in Crore)
For the year ended 31st
For the year ended 31st
For the year ended 31st
For the year ended 31st
Profit Before Depreciation, Interest and Tax
Profit Before Exceptional Items and Tax
Profit Before Tax
Short / (Excess) provision of current tax for earlier
Profit for the period
Other comprehensive income(net of tax)
Total comprehensive income for the year
Add: Balance brought forward
Balance available for Appropriation
Transfer to Contingency Reserve
Transfer to Debenture Redemption Reserve
Transfer to General Reserve
Dividend (including interim dividend) paid
Dividend distribution tax paid
Balance carried to Balance Sheet
Basic and Diluted Earnings per Share - (Rs, per share)
Note: From 1st April, 2016, the Company has adopted accounting standards notified under Companies (Indian Accounting Standards) Rules, 2015 (“Ind AS”). Accordingly the financial results for the previous periods are restated as per Ind AS.
The Company, as a policy, endeavours to distribute approx. 30% of its consolidated annual profits after tax as dividend in one or more tranches. Following the said policy, the Board of Directors, on 23rd May, 2017, recommended dividend of Rs,2.20 per equity share having face value of Rs,10/- on 48,06,16,784 equity shares (PY - Rs,4.50 per equity share having face value of Rs,10/- on 48,06,16,784 equity shares), amounting to Rs,105.73 Crore (PY - Rs,216.28 Crore).
With Dividend Distribution Tax of Rs,21.53 Crore (PY - Rs,44.03 Crore), the total outflow on account of dividend works out to Rs,127.26 Crore (PY - Rs,260.31 Crore) i.e. 30.12% (PY - 29.14%) of consolidated Total Comprehensive Income for FY 2016-17.
The Dividend Distribution Policy of the Company can be accessed at the Company’s website: http://www.torrentpower. com/pdf/investors/06-01-2017_hfl6a_Dividend_Distribution_ Policy.pdf.
3. MANAGEMENT DISCUSSION AND ANALYSIS
As stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report forms part of this Annual Report.
4. CUSTOMER INITIATIVES
The customer centric approach of the Company ensures highest level of services to the customers through adoption of new technology, processes, and innovative ideas. Some of the key developments in this regard during FY 2016-17 include; (a) opening of 300 new collection centres, (b) up gradation of infrastructure & service quality at the new model Service Centre ‘PLUGPOINT’ in Ahmadabad, (c) regular SMS / Mobile App notifications regarding bill generation, payment, status on query / complaints, scheduled shutdowns, etc., (d) enabling submission of own meter reading by consumer through Service portal, etc. and (e) Redesigning of the bill format to include more information like past consumption, Security deposit amount, explanation of the billed amount, safety & energy conservation tips etc.
5. ENVIRONMENT, HEALTH AND SAFETY (EHS)
The Company accords utmost importance to environment, health and safety in its various operations. The key developments concerning environment, health and safety during FY 2016-17 include:
- Meghdhanush, the township at Dgen, has been rated in Platinum category (the highest rating) in the green building rating scale, by the Indian Green Building Council.
- IMS implementation at Distribution units (Ahmadabad, Surat and Dahej), GENSU plant and new Corporate Office covering certifications under ISO 14001 (Environment Management System), OHSAS 18001 (Occupational Health and Safety Assessment Series) and ISO 9001 (Quality Management System). Additionally, as part of such implementation, the Distribution units have obtained certifications under ISO 50001 (Energy Management System) and ISO 55001 (Asset Management System).
- Up gradation of existing Occupational Health Unit with advanced equipments and facilities for better diagnosis and monitoring of employees’ health at AMGEN.
- Integration of various active as well as passive design strategies to ensure a climate responsive and energy efficient design, resulting into ~70% lesser electricity consumption at new Corporate Office.
- Other key EHS initiatives include, Rainwater harvesting system in DGEN; Water filtration and pre-treatment plant at Meghdhanush; Safety training programs for differently abled persons at GENSU, Safety awareness programs, emphasis on e-bill registration, Usage of environmental friendly bio-degradable Ester oil in place of mineral oil in Distribution transformers, Celebrations of EHS / Road / Electrical / Chemical / Mechanical safety week, National Safety Day, National Fire Service Day, World Environment Day, Earth Day, etc.
Moreover, the Company has in place the “Conviction for Safety” policy which provides for substantial compensation to the personnel (Employees as well as Contractors) and their families, who are adversely affected by accidents.
6. HUMAN RESOURCES
Adapting to change is quintessential to a growing organization’s longevity. Over the time, Torrent has changed to adapt and evolve with the changing economic landscape, while keeping its core values firmly entrenched.
The Human Resource (HR) Department has strategic and functional responsibilities for all of the HR disciplines in this changing scenario. There are four corresponding roles for HR: a) as a strategic partner working to align HR and business strategy, b) as an administrative expert working to improve organizational processes and deliver basic HR services, c) as an employee champion, listening and responding to employees’ needs, and d) as a change agent managing change processes to increase the effectiveness of the organization.
Within organization, Human Resource Department has active engagement with employee issues, listening to their concerns, and building a professional and stable relation between employees and employers. Managing expectations, being flexible, communicating and adequate training are few of the most significant factors in keeping employees contented. Human Resource Department conducts performance appraisals, career development and up skilling, developing effective reward systems and designing jobs to fit both the needs of the business and employees.
On the Statutory front, during the year under review, there was no case received under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The year also saw reinforcement of the already existing “Whistle Blower” policy in order to emphasize and encourage reporting of any wrongdoing or any unethical practice.
On the industrial front, the Company continued to foster cordial industrial relations with its workforce during the year.
The Company has a diverse workforce of 7,414 employees as on 31st March, 2017 vis-a-vis 7,296 employees as on 31st March, 2016. Going forward, the Company will continue to focus on nurturing the right talent to achieve the business goal.
7. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Torrent Group believes in the well being of the society at large. As a social corporate citizen, it has always believed in the philosophy of “Think of others also when you think about yourself’.’ Over past many years, the Group has contributed to the society in the field of Community Healthcare, Sanitation & Hygiene, Education & Knowledge enhancement and Social Care & Concern.
In line with the provisions of the Companies Act, 2013 and Rules made there under, a Corporate Social Responsibility Committee has been formed by the Board of Directors. The Composition of the CSR Committee is as under:
Name of Director Category of Directorship
Smt. Bhavna Doshi, Chairperson Independent Director
Shri Samir Barua Independent Director
Shri Jinal Mehta Whole-time Director
During FY 2016-17, the CSR programs and activities undertaken at Group level are described hereunder:
- REACH: In January 2016, Torrent Power Limited and Torrent Pharmaceuticals Limited jointly initiated a Child Centric Health Care Program - REACH - Reach EAch CHild under the aegis of Tornascent Care Institute (section 8 company of Torrent Group). The program encompasses three major activities: (a) SHAISHAV for grass root intervention; (b) JATAN for Greenfield action; and (c) MUSKAN for other allied initiatives. The focus during FY 2016-17 was mainly on SHAISHAV, wherein following activities were carried out:
- Identification of villages with underserved population around the four regions where Torrent Group has its manufacturing facilities i.e. Indrad, Nadiad, Surat and Dahej.
- Conducting 157 paediatric camps covering 219 villages and 36,142 children (in the age group of 6 months to 6 years) to obtain their base line health status, identify and treat anaemia and malnutrition and provide specialized treatment to those identified with other ailments like cardiac, neurological and respiratory disorders.
Periodic assessments and follow-up actions for all such cases are being undertaken under the supervision of qualified Pediatricians. The initial results were encouraging with 66% children cured of their anemic condition and around 52% of children pulled out of severe malnourishment. Around 405 children were provided specialized treatment for cardiac, neurological, respiratory, etc. disorder.
During later part of the year, the following activities under Greenfield Action- ‘JATAN were initiated:
- Procurement of Mobile vans for all the four locations for providing mobile OPDs and reaching out to the villages covered under SHAISHAV.
- Starting of two fully equiped Paediatric Centres at Sugen (near Surat) and Pakhajan (near Dahej) to provide free high quality primary medical treatment to the nearby villages.
- Shiksha Setu - During FY 2016-17 under UNM Foundation, Phase II of the Program was initiated in 13 schools, located in Sugen, Chhatral, Chhapi, Memadpur and Ahmadabad locations covering about 4,300 students and 150 teachers. The following activities were conducted under the programme in FY 2016-17:
- Provision of ~ 1,250 Tablets and 20 smart boards in 13 programme schools.
- Training to the students and teachers on the new educational tools.
- Step by step improvisation in the tools based on the feedbacks received from the teachers and students from different schools
- Community meetings involving more than 1,500 parents to seek their support.
The Annual Report on CSR Activities is given as Annexure A to this Report which indicates that the Company has spent Rs,13.45 Crore (more than 2% of the average net profits of last three financial years) in this regard.
Other CSR initiatives undertaken by the Company during FY 2016-17 include:
- Creating livelihood:
o 42 days intensive training course, developed in-house by the security team at Sugen, covering security, basic firefighting, personality development and working knowledge of computers was conducted. Training was provided to 44 unemployed youths with basic primary education from nearby villages at Sugen and Dgen before absorbing them into security services at the plant sites of Sugen and Dgen.
o Training for multi skilling was organized for security guards:
- To work as “Suraksha Doots” during execution of projects.
- Selected guards were put through advanced fire fighter’s training to act as reserve ‘Second Line Reserve of Fire Fighters.
- Selected 19 security guards are undergoing driving training to enhance their driving skill and obtain LMV licenses.
- New activity of in-house housekeeping training has been initiated with curriculum incorporating physical fitness, training, personality development, basic housekeeping, handling of light and heavy housekeeping machines, preparation of guest rooms and working in canteens.
- Continuing the initiative since FY 2015-16, 42 differently abled persons (with impaired hearing and speech) were deployed for cleaning of solar panels at the GENSU Solar Plant, thus providing them a dignified livelihood.
- Community healthcare: SWADHAR - the community health care center at SUGEN Plant, not only provided primary health care facilities at very nominal cost to surrounding communities, but also promoted health, hygiene and sanitation through various camps during the year. During FY 2016-17 about 14,500 persons benefitted from SWADHAR activities.
- Sanitation: With a view to build user friendly and long lasting toilets, the Company provided an additional amount of ''''23,500 per household, over and above the subsidy of ''''12,000/- provided by the Government under ‘Swachh Bharat Mission’ for construction of individual household toilets, at Akhakhol village near its Sugen plant. An added feature of the project was the active labour work done by the users in the making of such toilets (‘Shram Daan’). During FY 2016-17, 125 households benefited under the project.
- The Company also made donations to various organizations involved in activities related to education, health, socio-economic development, culture, integrated development of tribes, relief to disaster victims, promotion of social welfare, etc.
8. SCHEME OF ARRANGEMENT
The Hon’ble High Court of Gujarat vide its order dated 14th October, 2016 has sanctioned the Scheme of Arrangement between Torrent Solargen Limited (TSL) and Torrent Power Limited (TPL) (“Scheme”). The Scheme envisaged transfer of Solar Energy Undertaking and Wind Energy Undertaking from TSL to TPL on a going concern basis by way of slump sale for a lumpsum cash consideration as recommended by an Independent Chartered Accountant with effect from the Appointed Date i.e. 1st April, 2015. The effective date of the scheme is 1st December, 2016.
During the year under review, the Company raised long term loans to the tune of ''''1,087 Crore for refinancing some of its existing loans. The Company has tied up long term loans of ''''488.19 Crore for part funding of its renewable projects at Charanka (solar) and Mahidad (wind) in Gujarat. Further, the Company had issued Non-Convertible Debentures (NCDs) of ''''245 crore and has also tied up long term loans of Rs,385 Crore, inter alia, for part funding of its wind project at Kutch and Bhavnagar districts in Gujarat.
Outstanding amount towards long term loans, NCDs and APDRP loans as on 31st March, 2017 was Rs,8,630.89 Crore. Details of long term loans of the Company for the year under review are provided in Note 24 to the Financial Statements.
During the year under review, lenders of the existing long term loans of the Company approved significant reduction in interest rate.
The consolidated debt to equity (including deferred tax liability) ratio as at the end of FY 2016-17 was 1.06 (PY - 1.10).
Credit Rating of the Company’s long term loans, cash credit and NCDs has been Reaffirmed by CRISIL at AA- / Stable and that of Letters of credit / bank guarantees of the Company has been Reaffirmed at A1 .
During the year under review, the Company has neither accepted nor renewed any deposits.
10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The particulars of contracts or arrangements with related parties are given in the prescribed Form AOC-2, appended herewith as Annexure B and in the section on Related Party Transactions in the Report on Corporate Governance.
11. DIRECTORS’ RESPONSIBILITY STATEMENT
In terms of Section 134(3) of the Companies Act, 2013, the Board of Directors states that:
a) in preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;
b) t he Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2017 and of the profits for the year ended 31st March, 2017;
c) t he Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the annual accounts have been prepared on a going concern basis;
e) t he 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.
12. INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference to Financial Statements. During the year, such controls were tested and no reportable material weakness was observed.
13. SUBSIDIARIES AND JOINT VENTURES
The Company has four subsidiary companies viz. Torrent Solargen Limited (TSL), Torrent Power Grid Limited, Torrent Pipavav Generation Limited and AEC Cements and Constructions Limited (AECCCL).
The Company, jointly with Torrent Pharmaceuticals Limited, has promoted two Section 8 Companies under the Companies Act, 2013, viz. Tornascent Care Institute and UNM Foundation for the purpose of carrying out CSR activities, which are detailed in section 8 of this report.
The Board reviewed the affairs of the Company’s subsidiaries during the year at regular intervals. In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared Consolidated Financial Statements of the Company and all its subsidiaries except AECCCL (under liquidation), which form part of this Annual Report. Further, a statement containing salient features of the Financial Statements of the Company’s subsidiaries and the manner in which associates have been dealt with, forms part of Note 64 of Consolidated Financial Statements in the prescribed format.
14. CORPORATE GOVERNANCE
The Corporate Governance philosophy of the Company rests on five basic principles viz. protection of rights & interests of members, equality in treatment of all members, disclosure of timely & accurate information, strategic guidance & effective monitoring by the Board and accountability of the Board to the Company & its members. As stipulated by Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Report on Corporate Governance forms part of this Annual Report. Certificate of the Auditors regarding compliance with the conditions of Corporate Governance as stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to the Board’s Report as Annexure C.
15. DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTMENT, RESIGNATION AND RETIREMENT
The Members of the Company had at the 12th Annual General Meeting held on 2nd August, 2016, appointed Shri P. K. Taneja, IAS (holding DIN: 00010589), an Additional Director of the Company, as a Director with effective from 2nd August, 2016, who shall be liable to retire by rotation pursuant to the applicable provisions of the Companies Act, 2013. The Members had, in the same meeting, also approved the re-appointment of Shri Markand Bhatt (holding DIN: 00061955), as a Whole time Director of the Company with effect from 1st April, 2016, for a term of five consecutive years.
Shri P. K. Taneja, IAS resigned from the Board w.e.f. 23rd May, 2017 consequent upon his retirement on superannuation from IAS. The Board places on record its appreciation for the valuable services rendered by Shri P. K. Taneja, IAS during his tenure as Director of the Company.
The Government of Gujarat has nominated Shri Pankaj Joshi, IAS (holding DIN: 01532892) as its nominee on the Board of the Company and the Company has appointed him as an Additional Director on the Board w.e.f. 23rd May,
2017 till the commencement of ensuing Annual General Meeting (AGM). It is proposed to appoint him as a Director, liable to retire by rotation, with effect from the ensuing AGM i.e. 1st August, 2017
DECLARATION BY INDEPENDENT DIRECTORS
Pursuant to Section 149(7) of the Companies Act, 2013, the Company has received necessary declaration from each Independent Director confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
POLICY ON DIRECTORS’ APPOINTMENT
The Nomination and Remuneration Committee (NRC) has approved the 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, specialization / 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
- Involved in scale, complexity of business and specific market and environment factors affecting the functioning of the Company
ii. The appointment shall be in compliance with the Board Diversity Policy of the Company.
Process for Identification / Appointment of Directors:
i. Board members may (formally or informally) suggest any potential person to the Chairman of the Company meeting the above criteria. If the Chairman deems fit, necessary recommendation shall be made by him to the NRC.
ii. Chairman of the Company can himself also refer any potential person meeting the above criteria to the NRC.
iii. NRC will process the matter and recommend such proposal to the Board.
iv. Board will consider such proposal on merit and decide suitably.
CRITERIA FOR PERFORMANCE EVALUATION
During the year under review, the Board considered and refined the criteria as well as the process for performance evaluation of itself, that of its Committees and Individual Directors as follows:
Evaluation of Criteria for Evaluation
Board - Degree of fulfillment of key responsibilities including special responsibilities as under:
- Focus on strategic and policy issues
- Governance and compliance
- Stakeholders’ value and responsibility
- Effectiveness of Board process and information sharing.
- Board culture and dynamics.
- Quality of decisions
- Establishment and delineation of responsibilities to Committees
- Facilitation of Independent Directors.
Evaluation of Criteria for Evaluation
Committee - Degree of fulfillment of key responsibilities.
- Frequency and effectiveness of meetings.
- Committee dynamics, especially openness of discussions, including with the Board.
- Adequacy of Committee composition.
- Quality of relationship of the committee with the Board and the Management.
Individual - Fulfillment of functions
Directors - Participation in Board in terms of adequacy (time & content).
- Contribution at meetings.
- Guidance / support to Management outside Board / Committee meetings. _- Independent views and judgement (only for Independent Directors)_
MANNER OF EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
The evaluation of Board, its Committees and Individual Directors was carried out as per the process and criteria laid down by the Board of Directors based on the recommendation of the Nomination and Remuneration Committee.
The obtaining and consolidation of feedback from all Directors in this regards, was co-ordinate by the Vice Chairman. Based on this, Chairman / Vice Chairman briefed the Board and each of the Individual Directors, as applicable.
NUMBER OF MEETINGS OF THE BOARD
The Board meets at regular interval with gap between two meetings not exceeding 120 days. During the year under review, the Board met four times.
The Company has in place the policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees of the Company which is as under:
Components of Remuneration
i. Fixed Pay comprising Basic Salary, HRA, Car Allowance (applicable to General Managers & above employees), Conveyance Allowances / Reimbursement, Company’s contribution to Provident Fund, Superannuation Fund, Gratuity, etc.
ii. Variable Pay, which is either in the form of:
- Commission to Managing Directors
- Commission to Whole-time Directors
- Performance Based Pay to General Managers & above (up to 20% of CTC), based on unit performance grades
- One-time reward for identified employees in exceptional cases who undertake tasks which go beyond their normal call of duty and play a crucial role in the success of an event.
iii. Retention Pay: In the case where stability is an issue, part of the CTC is kept as retention pay which is being paid after 3 years or more.
Such remuneration is determined at the time of recruitment based on various factors such as Educational Qualification, Experience, Competence, Current CTC, Internal Equity and / or External Market comparison, etc.
Annual Appraisal Process
i. Annual Appraisals are conducted, following which annual increments and promotions in deserving cases are decided once in a year based on:
- Employees self-assessment
- Assessment by Immediate Superior and
- Assessment by Head of Department
ii. Annual Increment leading to an increase in Fixed Pay consists of
- Economic Rise based on All India Consumer Price Index published by the Government of India or Internal Survey wherein inflation on commonly used items is calculated.
- Performance Rise based on industry and overall business scenario and factoring the following aspects: o Company’s performance vis-a-vis the industry
o Unit performance is generally carried out based on various financial and non-financial parameters and grades assigned are used for working out the overall ceiling for remuneration and performance based pay at Unit level.
o Individual Performance / track record including care for health / balance between quality of work and family life.
- Promotion Rise
iii. Also, Performance Based Pay i.e. Variable Pay (to General Manager & above employees) is based on annual appraisal process.
iv. The increments as decided for a particular financial year are paid during the subsequent financial year. For example, the performance appraisal of an employee for FY 2016-17 is conducted in FY 2017-18 and his salary rise in FY 2017-18 reflects his performance for FY 2016-17.
Remuneration of Non-Executive Directors:
The Company has formulated a policy for the remuneration of Non-Executive Directors as follows:
i. Sitting Fees of ''''1 lac for each meeting of the Board or any Committee thereof, attended by them.
ii. Commission on the basis of participation in the meetings of Board and Audit & Risk Management Committee subject to the condition that total commission paid to all Directors (other than Managing Director or Whole time Director) including service tax thereon shall not exceed the limit of 1% of net profits in a financial year as laid down under the provisions of Section 197(1) of the Companies Act, 2013 read with Section 198 of the Act.
iii. Non-Executive Directors will be reimbursed for all the expenses incurred for attending any meeting of the Board or Committees thereof, and which may arise from performance of any special assignments given by the Board.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
I n terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures pertaining to remuneration and other details are provided in Annexure D to this Report.
17 AUDITORS STATUTORY AUDITORS
M/s. Deloitte Haskins & Sells, Chartered Accountants, the Statutory Auditors of the Company retire at the ensuing Annual General Meeting.
The Statutory Auditors have completed the maximum tenure to serve as the Statutory auditors according to provisions of the Companies Act, 2013. Hence, the Statutory Auditors need to be rotated at the 13th Annual General Meeting of the Company. Accordingly, the Board hereby recommends the appointment of Price Waterhouse Chartered Accountants LLP as Statutory Auditors of the Company to hold the office from the close of the 13th Annual General Meeting till the conclusion of the 18th Annual General Meeting, subject to their appointment being ratified by the shareholders in every Annual General Meeting.
The Auditors’ Report for FY 2016-17 forms part of this 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 the Cost Auditors of the Company for FY 2016-17 by the Board of Directors and their remuneration was ratified by members at the 12th Annual General Meeting of the Company. The Cost Audit Report for FY 2015-16 was filed on 31st August, 2016 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, Ahmadabad, as Secretarial Auditors of the Company for FY 2016-17 The Secretarial Audit Report for FY 2016-17 is annexed herewith as Annexure E.
There are no adverse observations in the Secretarial Audit Report which call for explanation.
18. AUDIT AND RISK MANAGEMENT
The Composition of the Audit and Risk Management Committee is in compliance with the provisions of the SEBI (LODR) Regulations, 2015 and Section 177 of the Companies Act, 2013. Composition of the Committee as on 31st March, 2017 is given below:
COMPOSITION OF THE COMMITTEE Name of the Director Category of Directorship
Shri Keki Mistry, Chairman Independent Director
Shri Samir Barua Independent Director
Shri Kiran Karnik Independent Director
Smt. Bhavna Doshi Independent Director
Ms. Dharmishta Raval_Independent Director_
During the year, the Board has accepted all the recommendations made by the Audit and Risk Management Committee. VIGIL MECHANISM
The Company has in place a Whistle Blower Policy pursuant to the applicable statutory requirements. The Policy empowers all the Stakeholders to raise concerns by making Protected Disclosures as defined in the Policy. The Policy also provides for adequate safeguards against victimization of Whistle Blower who uses such mechanism and also provides for direct access to the Chairman of the Audit and Risk Management Committee, in exceptional cases. The functioning of the Whistle Blower mechanism is reviewed by the Audit and Risk Management Committee on a quarterly basis. The details of the Whistle Blower Policy are explained in the Report on Corporate Governance and the Policy is available on the website of the Company at http://www.torrentpower.com/investors/pdfs/2015/whistle_blower_policy. pdf
The Company has in place a Risk Management framework for a systematic approach to control risks. The Risk Management Policy of the Company lays down procedures for risk identification, assessment, monitoring, review and reporting. The Policy also lists the roles and responsibilities of Board, Risk Management Committee, Chief Risk Officer, Risk Champions and Co-coordinators. Internal and external risks, with potential impact and likelihood, that may impact the Company in achieving its strategic objectives or may threaten its existence have been identified and assessed.
19. THE EXTRACT OF THE ANNUAL RETURN
The extract of the Annual Return in Form MGT-9 is appended herewith as Annexure F to this Report.
20. 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 An nexure G which forms part of this Report.
21. APPRECIATION AND ACKNOWLEDGEMENTS
The Board of Directors is pleased to place on record its appreciation for the continued guidance and support received from the Government of India, the State Governments, the Central and State Electricity Regulatory Commissions / Authorities, the National, Regional and State Load Dispatch Centres, Regional Power Committees, Gujarat Energy Development Agency, Bureau of Energy Efficiency, Chief Electrical Inspectors of Gujarat, Uttar Pradesh and Maharashtra, State Energy Developers, State Discoms, National and State Transmission Companies, the Gram Panchayats, Taluka Panchayats, District Collectors, Local Authorities, Corporation and Municipal Authorities of the areas of Company’s operation, Contractors, Fuel Suppliers and Transporters, Power Exchanges, Banks, Financial Institutions and Security Trustees. The Board is thankful to the Members, Auditors, Consultants, Vendors, Service Providers, Insurers and all its Employees for their unstinted support and contribution. The Board also recognizes the contribution of the esteemed Consumers to the growth of the Company and takes this opportunity to pledge the Company’s commitment to serve them better.
For and on behalf of the Board of Directors
Ahmadabad Sudhir Mehta
23rd May, 2017 Chairman