Torrent Power Limited - Annaul Report 2007-08

Happiness for all; a simple philosophy that continues to inspire us year on year.
Something that makes for us, the business of power generation and distribution more than just that. At Torrent it's not just about adding another power generation plant or spreading our distribution network to some more territories, it's about being able to brighten more lives. It's not about being able to achieve just impressive financials but through them bring smiles to the employees and shareholders who place trust in us. It's this sense of achievement that grows and illuminates our path to a brighter future; a future that brings happiness for all.
CORPORATE INFORMATION
(as on 31st May, 2008)
Directors
Sudhir Mehta S. K. Barua S. B. Kunwar Samir Mehta Pankaj Patel P S. Shenoy . Markand Bhatt Murli Ranganathan P S. Shenoy . S. K. Barua S. B. Kunwar Pankaj Patel Pankaj Patel Markand Bhatt Samir Mehta Samir Mehta Markand Bhatt Murli Ranganathan Rajiv Shah C. C. Chokshi & Co.
Chairman
Whole-time Director Whole-time Director Chairman
Audit Committee
Shareholders' / Investors' Grievance Committee
Chairman
Committee of Directors
Chairman
Company Secretary Auditors Registered Office
Chartered Accountants
Torrent House, Off Ashram Road, Ahmedabad 380009 Telephone: 26585090, 26583060 Fax: 26582326 Sabarmati, Ahmedabad 380005 Vatva Gas Power Station, Vatva, Ahmedabad 382445 SUGEN CCPP Surat 394115 , www.torrentpower.com Sharepro Services (India) Private Limited Satam Industrial Estate Cardinal Gracious Road Chakala, Andheri (East) Mumbai 400099 Telephone: 022 67720300, 67720345, 67720372 Fax: 022 28375646 Email: sharepro@shareproservices.com
Plants
Website Registrar and Share Transfer Agent
Annual Report 2007-2008
DIRECTORS' REPORT DIRECTORS' REPORT

Dear Shareholders, Your directors have pleasure in presenting the 4th Annual Report of the Company together with the Audited Accounts for the year ended on 31st March, 2008. 1. Highlights
The key highlights of the operations for the financial year 2007-08:
All round improvement in the performance of the Company illustrated by:

Increase in turnover by Increase in PBDIT by Increase in PAT by country. 30.34 % 36.30 % 47.19%
Further reduction in T&D losses in Ahmedabad, Gandhinagar and Surat distribution circle to 8.75% - lowest in the Operations in Bhiwandi Distribution Franchise area stabilised. Commissioning of 1147.5 MW SUGEN project, though delayed due to reasons beyond control, expected to
commence generation in 2008-09.
SUGEN project approved for Clean Development Mechanism (CDM) Benefits by UNFCCC.
2. Financial Results, Accounts and Dividend

A summary of the financial results for the year under review is as under:
(Rs. Crores)
Particulars For the year ended on 31st March, 2008 3722.00 584.29 147.94 59.78 376.57 79.77 61.22 1.06 23.28 211.24 127.87 339.11 140.00 56.69 9.64 132.78 339.11 For the six months ended on 31st March, 2007 1446.35 214.34 65.22 19.43 129.69 16.77 40.60 0.54 0.02 71.76 82.73 154.49 5.07 18.90 2.65 127.87 154.49
Total Income Gross Profit before Depreciation, Interest and Tax Depreciation Interest Profit before Tax Current Tax Deferred Tax Fringe Benefit Tax Shortfall in provision for Taxation for earlier years Profit After Tax Balance brought forward Balance Available for appropriation Appropriations Transfer to General Reserve Interim Dividend Proposed Dividend Dividend Distribution Tax Balance carried to Balance Sheet
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Data for the current accounting year is not comparable with the data for the earlier period as the current accounting period is for the full year while the previous accounting period was for 6 months. During the current year, the financials include impact of Bhiwandi operations for the full year in comparison with its impact being reflected in the financials of the previous period for a part of the period.
3. Dividend The Board of Directors is pleased to recommend a dividend @ 12% i.e. Rs. 1.20 per equity share on 47,24,48,308 equity shares of Rs. 10 each for the financial year 2007-08, amounting to Rs. 56.69 Crores. With Dividend Distribution Tax of Rs. 9.64 Crores, the total outflow on account of dividend works out to Rs. 66.33 Crores.
4. Operations Ahmedabad Generation and Ahmedabad and Surat Distribution The sales for Ahmedabad and Surat have increased from 3325 MUs (6 months) to 7510 MUs (12 months) registering a healthy growth of 12.94 % over the previous financial period on an annualised basis. Simultaneously, the number of consumers also increased from 20.19 lacs to 20.87 lacs. This growth is due to healthy economic growth, reduction in T&D losses and continued focus on Slum Electrification under which 16797 new connections were released during the year. The sustained and concentrated efforts in theft reduction, efficient billing system, slum electrification and strengthening of the distribution network led to further reduction in T&D losses which are now lowest in the country. The system demand for these areas increased to 1408 MW which was met through the Company's own generation as well as import of power. The generation plant of the Company continued to perform in an excellent manner registering the PAF and PLF of 95.33% and 90.59% respectively. The availability of gas for Vatva plant and price thereof has become an issue of concern. During the year under report, the Company could get only 78% of its requirement. The price also went up substantially resulting into the levy of higher Fuel Price and Power Purchase Adjustment Charge on the consumers. The price has gone up further and will have impact on the FPPPA and the working of 2008-09. Continuing the process of strengthening the distribution network, the Company added 321 Distribution Transformers of 11 kV at Ahmedabad, Gandhinagar and Surat. The Company also commissioned the first phase of 220 kV Transmission Lines project at Surat which will help Surat Distribution area to receive power from SUGEN project. Bhiwandi Distribution The Company demonstrated its ability to efficiently manage the distribution business by stabilising the operations of Bhiwandi area in Maharashtra where the Company has been appointed as a Distribution Franchise. The sales in Bhiwandi area amounted to 1908 MUs during the financial year to about 1.6 lac consumers. The system peak demand for Bhiwandi distribution area was 571 MW which was met through purchase of 2620 MUs from Maharashtra State Electricity Distribution Company Limited. However, it must be noted that this system peak demand is a restricted demand due to load shedding of around 200 MW which is in effect round the clock at Bhiwandi.
The Company put in concentrated efforts to upgrade and strengthen the network in the area as well as improve the metering and billing efficiency (a) to serve the consumers of the Bhiwandi circle better (b) to make the network robust and (c) to bring down the AT&C losses. The Company has enhanced the distribution transformation capacity by more than 100 MVA by putting in 889 new 22 kV Distribution transformers as well as by increasing the capacity of the existing transformers, 31kms. of 22 kV overhead lines and 65 kms. of underground feeders were also added during the year. More than 92,000 meters were replaced at the customer premises during the period.
5. A Mega Strategic Initiative - 1147.5 MW SUGEN Power Project The prestigious SUGEN Mega Power Project of 1147.5 MW capacity is being implemented to secure long term reliable source of supply for the distribution business of the Company. Unfortunately, the EPC Contractor, Siemens, is lagging behind in the progress of the project and there is a delay in the commissioning of the same. It is now expected that it will commence generation during the financial year 2008-09. An amount of Rs. 2537 Crores has been spent on the project out of which Rs. 1707 Crores have been financed by Term Loans. The Company has tied-up its entire requirement for the gas. It has also entered into a Gas Transportation Agreement and thus, has made an arrangement for bringing gas to the site. However, with the increase in the crude oil prices and gas situation at domestic and international level, the price of the gas remains volatile and uncertain. The Company is happy to inform that as a result of considerable efforts, SUGEN project has been approved for Clean Development Mechanism (CDM) benefits. Consequently, SUGEN plant will be eligible to earn Carbon Credits (CERs) once the generation commences. It is heartening to note that the methodology proposed for CDM by the Company has been accepted by UNFCCC for evaluation of gas based power generation projects in future. Evacuation arrangement for SUGEN project The subsidiary of the Company, Torrent Power Grid Limited (TPGL) - a Joint Venture with Power Grid Corporation of India Limited (PGCIL) - has completed the first phase of evacuation arrangement by construction of 26 kms. Gandhar-Vapi LILO. The work for 400 kV Double Circuit Transmission line from SUGEN to Pirana (Ahmedabad) is in progress. The Company also has installed transmission lines to connect SUGEN plant with Kim sub-station of GETCO. Three 220 kV Double Circuit lines from SUGEN to Surat and two 220 kV receiving sub-stations are complete and energised to take care of transmission of power to meet Surat requirement.
6. Consumers' satisfaction The Company has continued its stress on becoming consumer centric organisation. To this end, the Company has taken various steps to improve the customers' services by revising various systems and processes. It has introduced many new features to cater the requirement of consumers and respond to the consumers quickly and in a better way. The Company has established better performance than the standards of performance prescribed by Gujarat Electricity Regulatory Commission.
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7. New Generation Projects The Company has a long-term strategic growth plan, in order to enable it to capitalise on opportunities. The Company is currently pursuing development of several projects for achieving growth. These are: A. SUGEN Expansion The Company is planning to increase its project capacity by additional 3000 MW. SUGEN II and SUGEN III both will add 1500 MW in each phase at SUGEN site. Land adjacent to SUGEN project has been identified and acquisition process for the same has commenced. B. Dahej The Company has been named as co-developer for Dahej SEZ near Bharuch in Gujarat state and is authorised to put up generation project upto 1500 MW. The Company is planning to set up approximately 400 MW gas based combined cycle power plant in the first phase through a new Special Purpose Vehicle, Torrent Energy Limited. The Contour survey & Geo-Technical investigation for the project has been completed. Further, bids have been invited under international competitive bidding process for awarding EPC contract. C. Pipavav The Company is planning to set up a 2000+ MW coal based thermal power project in Pipavav in Amreli District of Gujarat. Torrent Pipavav Generation Limited has been incorporated as a subsidiary of the Company for development of the project. Land for the project is under possession of Gujarat Power Corporation Limited which will be transferred to the Company. Fuel will be supplied from Baitarni Coal Block in Talchar Coal Field, Orissa. D. Morga The Company's bid to supply power to GMDC on the basis of coal to be supplied by GMDC from Morga-II Coal Block, Chhattisgarh has been accepted. The Company is planning to set up 1,000+ MW coal based thermal power project in Chhattisgarh for this purpose. A Memorandum of Understanding (MOU) has been signed with the Chhattisgarh government and Chhattisgarh State Electricity Board for development of the project.
8. Human Resources & Industrial Relations During the financial year 2007-08, the Company amicably entered into a wage settlement agreement with its employees union at Surat for a three year period upto 31st December, 2009. The settlement not only addressed the issues like revision of pay scales, allowances, benefits, changes in service conditions etc., but it also helped the Company to resolve other long outstanding issues. The Company also entered into a settlement agreement with the employees union to end 10 industrial disputes involving contract labourers, apprentices, township council employees, voucher category employees and fly ash division employees.
9. Subsidiaries The Company has two subsidiary companies namely; Torrent Power Grid Limited and Torrent Pipavav Generation Limited. Statement giving details prescribed by the Ministry of Corporate Affairs under Section 212 of the Companies Act, 1956 forms part of the Annual Report.
10.Directors Shri S. K. Barua was appointed as an Independent Director on the Board effective from 29th January, 2008, in the casual vacancy caused by the resignation of Dr. Bakul H. Dholakia. Smt. V. L. Joshi, IAS resigned from the Board effective from 15th April, 2008. The Board places on record its appreciation for the valuable services rendered by Dr. Bakul H. Dholakia and Smt. V. L. Joshi, IAS during their tenure as Directors of the Company. Shri Samir Mehta and Shri S. B. Kunwar retire by rotation at the ensuing Annual General Meeting. Being eligible, they have offered themselves for re-appointment. For perusal of the shareholders, a brief resume of the Directors being re-appointed, nature of their expertise, their shareholding in the Company and other relevant details are given in the explanatory statement to the Notice. The Board of Directors recommends their re-appointment.
11.Corporate Governance The governance philosophy of the Company rests on five basic principles viz. protection of rights and interest of shareholders, equality in treatment of all shareholders, disclosure of timely and accurate information, strategic guidance and effective monitoring by the Board and accountability of the Board to the Company and its shareholders. A Management Discussion and Analysis Report forms part of this report. A report on Corporate Governance is also included as a part of the annual report. Certificate of the Auditors regarding compliance with the Corporate Governance code is also attached to this annual report.
12.Auditors M/s. C. C. Chokshi & Co., Chartered Accountants, Statutory Auditors retire at the ensuing annual general meeting and are eligible for re-appointment. They have furnished a certificate regarding their eligibility for re-appointment as the Statutory Auditors of the Company, pursuant to Section 224 (1B) of the Companies Act, 1956. The observations made in the Auditors' Report are self-explanatory and, therefore, do not call for any further comments.
13.Directors' Responsibility Statement In terms of Section 217 (2AA) of the Companies Act, 1956, in relation to financial statements for the year 2007-08, the Board of Directors states that:
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i. In the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures, if any; ii. Reasonable and prudent accounting policies have been adopted in preparation of the financial statements, that they have been consistently applied and that reasonable and prudent judgments and estimates have been made in respect of items not concluded by the year end, so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2008 and of the profit for the year ended on 31st March, 2008; iii. Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and iv The financial statements have been prepared on a going concern basis.
14.Conservation of Energy, Technology Absorption, Forex Earnings & Outgo The details relating to technology absorption, foreign exchange earnings and outgo required to be disclosed under the Companies (Disclosure of Particulars in the report of the Board of Directors) Rules, 1988, are given in the annexure to and forms part of this report.
15.Particulars of Employees The information required under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this report. As per the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the report is being sent to all the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining the particulars may obtain it by writing to the Company Secretary of the Company. 16.Appreciation and Acknowledgements The Directors are pleased to place on record their appreciation for the continued guidance and support provided by the Central Government, Government of Gujarat, Gujarat Urja Vikas Nigam Limited, Government of Maharashtra, Maharashtra State Electricity Distribution Company Limited, Maharashtra State Electricity Transmission Company Limited, Power Grid Corporation of India Limited, Gujarat Power Corporation Limited, financial institutions and banks. The Board recognises the contribution of the esteemed consumers in the growth of the Company and takes this opportunity to pledge the Company's commitment to serve them. The Board also would particularly like to express great appreciation for the understanding and support extended by the employees at all levels and the shareholders. For and on behalf of the Board of Directors Ahmedabad 15th May, 2008 Sudhir Mehta Chairman
FORM B: ANNEXURE TO DIRECTORS' REPORT

RESEARCH AND DEVELOPMENT (R&D) 1. Specific areas in which R&D was carried out by the Company The Company per se did not carry out any basic R&D work during the year 2007-08. However, some activities carried out through indigenous sources resulted in significant improvement in the performance of the system. (a) Generating Stations - New Carbide inserted Grinding Elements used in the Grinding of Coal Process (b) Transmission and Distribution - Upgrading of 132 kV SBI Pirana Line with use of GAP conductors - Introduction of Mobile DG Van for faster restoration of supply 2. Benefits derived as a result of above R&D initiatives - Improvement in operational efficiency by continuous generation - Improvement in system reliability 3. Future Plan of Action - Introduction of Distribution Automation in 11 kV system - Introduction of HVDS (High Voltage Distribution System) - Introduction of AMR ( Automated Meter Reading) 4. Expenditure on R&D No expenditure on R&D of capital or recurring nature has been incurred. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION 1. Efforts made towards technology absorption, adaptation and innovation - No absorption of new technology 2. Benefits derived as a result of the above efforts - Not applicable FOREIGN EXCHANGE EARNINGS AND OUTGO Description Foreign Exchange Earned Foreign Exchange used (Actual Basis) a) Import of Capital Goods b) Import of Fuel, Components, Stores & Spare parts c) Professional and Consultation Fees d) Traveling, Subscriptions and Others e) Repayment of Loan f) Payment of interest on Loan (Rs. in Crores) 203.39 0.13 0.06 2.01 For and on behalf of the Board of Directors Ahmedabad 15th May, 2008 Sudhir Mehta Chairman
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REPORT ON CORPORATE GOVERNANCE

Corporate governance is globally recognised as a fundamental component for the robust operation of every corporate entity. Sound governance practices and responsible corporate behaviour contribute to superior long-term performance of companies. It has evolved into a set of guidelines, designed to ensure a firm commitment to values and ethical conduct by corporates. Adaptation to changing times is the key to corporate growth and long term survival. Continuous improvement is necessary in corporate governance as well. In fact, better governance practices enable companies to introduce more effective internal controls suitable to the changing nature of business operations, improve performance and also provide an opportunity to increase public understanding of the key activities and policies of the organisation. Indian corporates have adopted better governance practices and have demonstrated openness in their dealings with stakeholders across the board. This has been augmented by regulatory authorities introducing and improving governance practices for Indian corporates over the last decade. Company's Philosophy on Code of Governance The Company believes that the Corporate Governance Code of the Listing Agreement (the Code) prescribes only a minimum framework for governance of a business in corporate framework. The Company's philosophy is to develop this desired minimum framework and institutionalise the spirit it entails. This will lay the foundation for further development of superior governance practices, which are vital for growing successful business and for furthering the interest of all stakeholders in the best possible manner. The Company recognises that transparency, disclosure, financial controls and accountability are the pillars of any good system of corporate governance.
1. BOARD OF DIRECTORS The Board of Directors comprises of eight directors of which five are non-executive directors. Of these five non-executive directors, four are independent directors. Composition of the Board is in conformity with the provisions of the Code. The Board of Directors met four times during the year on 29th May, 2007, 30th July, 2007, 29th October, 2007 and 29th January, 2008. Composition of the Board and other related matters as on 30th April, 2008 are given below: Name of the Director Category No. of No. of Board Directorship Committees of held which Member/ Chairman 6 1(as Chairman) 1 (as Member) 5 1 (as Chairman) 4 (as Member) 3 (as Chairman) 4 (as Member) Board Attendance Meetings at the last attended AGM 4 Yes
Shri Sudhir Mehta, Chairman Shri S. K. Barua (a)
Promoter and executive director Non-executive independent director
N.A.
Dr. Bakul H. Dholakia (b) Non-executive independent director
Yes
Name of the Director
Category
No. of No. of Board Directorship Committees of held which Member / Chairman 14 2 (as Chairperson) 1 (as Member)
Board Meetings attended 2
Attendance at the last AGM No
Smt. V. L. Joshi, IAS (c)
Non-executive independent director Nominee of Govt. of Gujarat (a shareholder) Non-executive independent director Nominee of LIC (a shareholder) Non-executive independent director Non-executive independent director Promoter and non-executive director Promoter and executive director Promoter and executive director
Shri S. B. Kunwar
2 (as Member)
Yes
Shri Pankaj Patel
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3 (as Chairman) 3 (as Member) 2 (as Chairman)
No
Shri P S. Shenoy .
Yes
Shri Samir Mehta
2 (as Member)
Yes
Shri Markand Bhatt, Whole-time Director Shri Murli Ranganathan, Whole-time Director a) b) c)
2 (as Member)
Yes
Yes
Shri S. K. Barua was appointed as a director on 29th January, 2008 in the casual vacancy caused by the resignation of Dr. Bakul H. Dholakia. Dr. Bakul H. Dholakia resigned from the Board effective from 28th November, 2007. Smt. V. L. Joshi, IAS resigned from the Board effective from 15th April, 2008.
Details of directorship given above exclude directorships held in private companies, foreign companies and companies registered under Section 25 of the Companies Act, 1956. Details of committee membership include membership / chairmanship of Audit Committee and Shareholders' / Investors' Grievances Committee of public companies. Shri Samir Mehta and Shri S. B. Kunwar are liable to retire by rotation at the ensuing annual general meeting and being eligible, have offered themselves for re-appointment. Brief resume of the directors proposed to be re-appointed and other relevant details are given in the explanatory statement annexed to the Notice
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of the annual general meeting. Shri Sudhir Mehta and Shri Samir Mehta are related to each other. None of the other directors are related inter-se. The Board meetings are normally held at the registered office of the Company in Ahmedabad. The Board meets atleast once a quarter with gap between two meetings not exceeding four months. The Board agenda papers and other explanatory notes are circulated to the directors in advance. Senior executives are invited to attend the board meetings as and when required. 2. AUDIT COMMITTEE Present members of the Audit Committee are Shri P S. Shenoy, Chairman, Shri S. B. Kunwar, Shri Pankaj . Patel and Shri S. K. Barua. All the members of the Committee are independent directors. During the year, constitution of the Committee was revised and broad-based. During the year under review, four meetings of the Audit Committee were held on 29th May, 2007, 30th July, 2007, 29th October, 2007 and 29th January, 2008. Composition of the Committee and details of attendance of the members at the Committee meetings during the year are given below: Name of the Director Qualification No. of meetings attended 4 N.A. 3 4 N.A. 1
Shri P S. Shenoy, Chairman . Shri S. K. Barua Dr. Bakul H. Dholakia Shri S. B. Kunwar Shri Pankaj Patel Shri Samir Mehta Shri Markand Bhatt
B. Com., CAIIB M. Tech.IIT, Kanpur, Ph. D. (Management)IIM, Ahmedabad Ph. D. (Economics) Chartered Accountant M. Pharm. MBA (Finance) Post Graduate Diploma in Business Management-IIM, Ahmedabad
Shri Samir Mehta resigned from the Committee effective from 29th May, 2007. Dr. Bakul H. Dholakia resigned from the Committee effective from 28th November, 2007. Shri Markand Bhatt was appointed as a member of the Committee effective from 1st January, 2008 and resigned from the Committee on 29th January, 2008. Shri P S. Shenoy was appointed as the Chairman of . the Committee effective from 29th January, 2008. Similarly, Shri S. K. Barua and Shri Pankaj Patel were appointed as members of the Committee effective from 29th January, 2008. Composition of the Committee is in compliance with the requirements of Clause-49 of the Listing Agreement and Section 292A of the Companies Act, 1956. The Company Secretary acts as secretary to the Committee. The Committee meetings were also attended by the representatives of the statutory auditors and the Management Assurance Auditors / Internal Auditors and the Chief Financial Officer of the Company. The Committee invites senior executives, as it considers appropriate to attend meetings of the Committee. Terms of reference of the Audit Committee are in compliance with the provisions of Clause-49 of the
Listing Agreement and the Companies Act, 1956. Major terms of reference of the Committee include overseeing the financial reporting process, review of financial statements, ensuring compliance with the regulatory guidelines, review of internal audit reports, recommending appointment and remuneration of statutory auditors to the Board of Directors and to review adequacy of internal control systems and internal audit function. 3. SHAREHOLDERS' / INVESTORS' GRIEVANCE COMMITTEE The Shareholders' / Investors' Grievance Committee interalia reviews shareholder / investor grievances. Members of the Committee are Shri Pankaj Patel, Chairman, Shri Samir Mehta and Shri Markand Bhatt. Shri Rajiv Shah, Company Secretary is the Compliance Officer and acts as secretary to the Committee. The Committee met from time to time during the year to review redressal of the shareholder grievances. The Shareholders' / Investors' Grievance Committee is authorised to approve share transfers and related requests. Further, members of the Committee are severally authorised to approve share transfers and transmission upto 10,000 shares under one transfer deed / document. Senior executives of the Company and the Company Secretary are also severally authorised to approve transfer / transmission of shares upto 5,000 shares under one transfer deed / document. The Company received 231 complaints during the year and they were attended within a reasonable period of time. No complaint was pending as on 31st March, 2008. No valid requests for share transfer, issue of duplicate share certificates, etc. were pending as on 31st March, 2008 beyond 30 days for processing. 4. MANAGEMENT REMUNERATION Chairman and Whole-time Directors Remuneration of the Chairman and Whole-time Directors was determined by the Board of Directors and approved by the shareholders at the 2nd annual general meeting of the Company held on 15th December, 2006. Independent Non-Executive Directors (INEDs) 1. INEDs are compensated for their services to the Company by way of commission. Shareholders have approved a ceiling of 1% of net profits per annum for payment of commission. 2. Within the ceiling, the Chairman of the Board of Directors has the power to decide the commission to be paid to each INED. The commission was determined on the basis of participation at the Board and Audit Committee meetings.
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Details of remuneration paid to the directors for the year 2007-08 are as under: (Rs. in lacs) Name of the Director Sitting Fees Salary & Perquisites 319.25 Nil Nil Nil Nil Nil Nil Commission Total
Shri Sudhir Mehta Shri S. K. Barua Dr. Bakul H. Dholakia Shri Pankaj Patel Shri P S. Shenoy . Shri Samir Mehta Shri S. B. Kunwar (Nominee of LIC) Smt. V. L. Joshi, IAS (Nominee of Govt. of Gujarat) Shri Markand Bhatt Shri Murli Ranganathan Total
Nil Nil Nil Nil Nil Nil Nil
200.00 0.50 2.40 1.50 3.20 Nil 3.20
519.25 0.50 2.40 1.50 3.20 Nil 3.20
Nil
Nil
1.00
1.00
Nil Nil Nil
302.40 128.30 749.95
200.00 Nil 411.80
502.40 128.30 1161.75
Terms of appointment of the Chairman and Whole-time Directors (appointed for a period of 5 years effective from 1st October, 2006) are governed by the resolutions of the shareholders and applicable rules of the Company. They are not entitled to severance pay. Salary and perquisites include salary, house rent allowance, contribution to provident fund / gratuity / superannuation funds and approved perquisites. None of the directors have been granted stock options during the year. Commission of Rs. 3.20 lac of Shri S. B. Kunwar (nominee of LIC) has been paid to Life Insurance Corporation of India. Commission of Rs. 1.00 lac of Smt. V. L. Joshi, IAS (nominee of the Government of Gujarat) has been paid to the Government of Gujarat. Remuneration Committee This is a non-mandatory requirement of Clause-49 of the Listing Agreement. The Board of Directors has not formed a remuneration committee and decisions on appointment and remuneration of the directors are taken by the Board of Directors and approved by the shareholders in general meeting. Shareholding of non-executive directors Shri Samir Mehta holds 6,125 equity shares of the Company. Other non-executive directors do not hold any shares of the Company.
5.
SUBSIDIARY COMPANIES Torrent Power Grid Limited, (erstwhile Torrent Power Transmission Private Limited) a joint venture company with Power Grid Corporation of India Limited, has become a subsidiary of the Company effective from 19th October, 2006. The Company has formed another subsidiary, Torrent Pipavav Generation Limited on 25th September, 2007.
6.
GENERAL BODY MEETINGS Details of annual general meetings (AGMs) held by the Company during the last three years are given below: Meeting 1st AGM Date 16th July, 2005 Time 11.30 a.m. Venue Torrent House, Off Ashram Road, Ahmedabad 380 009 Sheth Mangaldas Girdhardas Memorial Hall (Town Hall), Ellis Bridge, Ahmedabad 380 006 Sheth Mangaldas Girdhardas Memorial Hall (Town Hall), Ellis Bridge, Ahmedabad 380 006 No. of special resolutions passed Nil
2nd AGM
15th December, 2006 10.00 a.m.
3rd AGM
30th July, 2007
10.00 a.m.
Special resolutions mentioned above were passed by a show of hands. No resolution was passed through postal ballot during the year under reference. The postal ballot exercise shall be conducted from time to time in compliance with the applicable provisions of Section 192A of the Companies Act, 1956 and rules made thereunder, as and when required. 7. DISCLOSURES Legal Compliances The Company has formalised a system for legal compliances applicable to the Company. Status of legal compliances and steps taken to rectify non-compliances, if any is placed to the Board of Directors at its meetings. There were no instances of material non-compliances during the year under review. No strictures or penalties were imposed on the Company by SEBI, stock exchanges or any statutory authority on any matter related to capital markets during the last three years.
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Code of Business Conduct The Company has adopted a Code of Business Conduct based on the business principles of the Company. The Code of Business Conduct has also been posted on the website of the Company. In compliance with the Code, directors and senior management of the Company have affirmed their compliance with the Code for the year under review. A declaration to this effect signed by the Chairman forms part of this annual report. Related Party Transactions Transactions with the related parties are disclosed in Note No. 19 of Schedule 15 forming part of the financial statements for the year. Transactions entered into by the Company with the related parties during the year were placed to the Audit Committee for review. Adequate care was taken to ensure that potential conflict of interest did not harm the interests of the Company at large. Compliance with the Corporate Governance Code The Company has complied with all the mandatory requirements laid down by the Corporate Governance Code. The Board would review implementation of non-mandatory requirements of the Code in due course of time. 8. COMMUNICATION TO SHAREHOLDERS During the year, quarterly unaudited financial results with limited review report and annual audited financial results of the Company were submitted to the stock exchanges on their approval by the Board of Directors. The results were published in Business Standard (English) and Jansatta (Gujarati) newspapers. They would also be placed on Electronic Data Information Filing and Retrieval (EDIFAR) website on registration of the Company for the same. The Company's website www.torrentpower.com also displays the official news releases in addition to the financial results. 9. GENERAL SHAREHOLDER INFORMATION 4th Annual General Meeting Date Time Venue Wednesday, 30th July, 2008 9.30 a.m. Sheth Mangaldas Girdhardas Memorial Hall (Town Hall), Ellis Bridge, Ahmedabad-380006
Tentative financial calendar for the year 2008-09 Financial year First quarter results Half yearly results Third quarter results Results for year end 1st April 31st March Last week of July, 2008 Last week of October, 2008 Last week of January, 2009 Last week of June, 2009
Interim financial statements The Company published stand-alone financial results with limited review report on a quarterly basis during the year.
Date of Book Closure Monday, 23rd June, 2008 to Wednesday, 25th June, 2008 (both days inclusive).
Dividend payment date The proposed dividend, if approved at the ensuing annual general meeting, will be distributed on or after 31st July, 2008, within the statutory time limit.
Listing on stock exchanges and security codes Stock Exchange Bombay Stock Exchange Limited (BSE) National Stock Exchange of India Limited (NSE) Security Code 532779 TORNTPOWER
Annual listing fees for the year 2008-09 have been paid to the stock exchanges.
Market price data The closing market price of equity shares on 31st March, 2008 (last trading day of the year) was Rs. 112.90onBSEand Rs. 112.70 on NSE.
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The monthly movement of equity share price during the year at BSE and NSE is summarised below: Month High (Rs.) April, 2007 May, 2007 June, 2007 July, 2007 August, 2007 September, 2007 October, 2007 November, 2007 December, 2007 January, 2008 February, 2008 March, 2008 73.20 80.80 72.40 79.00 90.40 101.90 170.60 208.00 199.00 269.90 189.00 146.00
BSE
NSE Volume 47,58,437 99,45,965 50,37,864 63,83,639 1,92,22,341 1,51,28,274 5,38,10,735 1,12,71,280 34,79,751 1,74,38,709 59,99,802 55,38,075 High (Rs.) 73.05 80.50 72.90 79.00 90.40 102.00 170.95 208.70 200.95 268.00 188.40 146.00 Low (Rs.) 56.55 66.10 60.20 68.25 64.50 84.00 93.00 150.00 162.00 126.20 127.00 93.15 Volume 37,45,490 70,84,236 34,98,062 57,31,038 1,68,09,185 1,56,74,437 5,94,12,341 1,36,18,406 37,13,247 2,09,12,710 55,07,464 40,91,229
Low (Rs.) 56.00 66.25 60.25 68.60 66.00 75.50 93.20 161.10 163.40 129.35 128.00 93.25
Performance of equity share price of the Company vis--vis S&P CNX Nifty at NSE is as under: Month TPL Share Price at NSE (Rs.) * 67.25 68.90 70.95 70.45 84.05 92.65 165.10 171.45 190.40 167.55 148.75 112.70 S&P CNX Nifty * 4,087.90 4,295.80 4,318.30 4,528.85 4,464.00 5,021.35 5,900.65 5,762.75 6,138.60 5,137.45 5,223.50 4,734.50 Relative index for comparison purpose TPL share price 113.60 116.39 119.85 119.00 141.98 156.50 278.89 289.61 321.62 283.02 251.27 190.37 S&P CNX Nifty 106.97 112.41 113.00 118.51 116.81 131.40 154.40 150.80 160.63 134.43 136.69 123.89
April, 2007 May, 2007 June, 2007 July, 2007 August, 2007 September, 2007 October, 2007 November, 2007 December, 2007 January, 2008 February, 2008 March, 2008
* Closing data on the last day of the month.
350
350
300
Relative Performance of TPL Share Price Vs. S&P CNX Nifty

279
322
290
300 283
251 250 250
Performance
200 190
200
157 150 116

107
142 120 113 Jun-07 119 119 Jul-07 117 131
154
161 151 134 137 124
150
114 100 Apr-07 Mar-07

Month
112 May-07
100 Nov-07 Oct-07 Dec-07 Aug-07 Sep-07 Mar-08 Feb-08 Jan-08
S & P CNX Nifty Index
TPL Share Price (Rs.)
Distribution of shareholding as on 31st March, 2008 By size of shareholding No. of Shares 01 to 500 501 to 1000 1001 to 2000 2001 to 3000 3001 to 4000 4001 to 5000 5001 & above Total No. of Shareholders 59,780 10,554 4,082 1,686 799 640 1,903 79,444 % Shareholders 75.25 13.28 5.14 2.12 1.00 0.81 2.40 100.00 No. of Shares 83,43,679 69,80,651 58,16,421 42,37,952 27,99,703 29,15,077 44,13,54,825 47,24,48,308 % of Shareholding 1.76 1.48 1.23 0.90 0.59 0.62 93.42 100.00
19
By category of shareholders Sr. No. 1 2 3 4 5 6 7 8 Promoters Mutual Funds Nationalised Banks Life Insurance Corporation of India GIC and Subsidiaries Governor of Gujarat with Gujarat State Investment Limited FIIs Others Total Dematerialisation of shares Equity shares of the Company can be traded in dematerialised form only by all investors. The Company has established connectivity with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). Demat security (ISIN) code for the equity shares is INE813H01021. As on 31st March, 2008, 84.99% of the total shares have been dematerialised. Share transfer system Powers to approve share transfers and related requests have been delegated to the members of the Shareholders' / Investors' Grievance Committee and to the senior officials of the Company for expeditious disposal of shareholders' requests and complaints. Share transfers which are complete in all respects are taken up for approval atleast once in a fortnight and the transferred securities are despatched to the transferees within the stipulated time. Details of transfers/transmission approved by the delegatees are noted by the Shareholders' / Investors' Grievance Committee at its next meeting. Outstanding GDRs / ADRs / Warrants / any other convertible instruments The Company has not issued any GDRs / ADRs / warrants or any convertible instruments as on date. Category No. of Shares held on 31st March, 2008 24,89,66,507 1,28,49,842 4,41,616 4,84,00,785 3,70,59,114 5,39,28,671 6,20,773 7,01,81,000 47,24,48,308 % of Shareholding 52.70 2.72 0.09 10.24 7.85 11.41 0.13 14.86 100.00
Registered office Torrent House, Off Ashram Road, Ahmedabad 380009. Plant locations 1) Power House, Sabarmati, Ahmedabad 380005 2) Vatva Gas Power Station, Vatva, Ahmedabad 382445 3) SUGEN CCPP Village Akhakhol, Taluka Kamrej, Surat 394115 , Compliance officer Rajiv Shah, Company Secretary, Torrent Power Limited, Off Ashram Road, Ahmedabad 380009 Telephone : 079-2658 3060, 2658 5090 Fax : 079-2658 2326 e-mail : rajivshah@torrentpower.com Website : www.torrentpower.com
Registrar & Share Transfer Agents Shareholders are requested to send all documents pertaining to transfer/demat requests and other communication in relation thereto directly to the Registrar at the following address: M/s. Sharepro Services (India) Private Limited, Unit : Torrent Power Limited, Satam Industrial Estate, Cardinal Gracious Road, Chakala, Andheri (East), Mumbai 400099 Telephone : 022 - 6772 0300 / 345 / 372 Fax : 022 - 2837 5646 e-mail : sharepro@shareproservices.com
For and on behalf of the Board Ahmedabad 15th May, 2008 Sudhir Mehta Chairman
21
Certificate of compliance with the Code of Business Conduct
To, The Shareholders, Torrent Power Limited
Torrent Power Limited has in place a Code of Business Conduct (the Code) for its Board of Directors and senior management personnel. I report that the Board of Directors has received affirmations on compliance with the Code from the members of the Board and senior management of the Company for the year under review. Ahmedabad 15th May, 2008 Sudhir Mehta Chairman
AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE

To the Members of Torrent Power Limited We have examined the compliance of conditions of corporate governance by Torrent Power Limited for the year ended on 31st March, 2008 as stipulated in Clause 49 of the Listing Agreement of the said Company with stock exchanges.
The compliance of conditions of corporate governance is the responsibility of the Management. Our examination has been limited to a review of the procedures and implementation thereof adopted by the Company for ensuring compliance of the conditions of the corporate governance as stipulated in the said Clause. It is neither an audit nor an expression of an opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, and based on the representations made by the Directors and the Management, we certify that the Company has complied with the conditions of corporate governance as stipulated in Clause 49 of the above mentioned Listing Agreement.
We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the Management has conducted the affairs of the Company. For C.C. Chokshi & Co. Chartered Accountants (Gaurav J. Shah) Partner Membership No.35701
Ahmedabad 15th May, 2008
23
AUDITORS' REPORT
To the Shareholders of TORRENT POWER LIMITED 1. We have audited the attached Balance Sheet of TORRENT POWER LIMITED as at 31st March, 2008 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 (together 'Order') issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order. 4. Further to our comments in the annexure referred to in Paragraph 3 above, we report that: (a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; (b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of the books; (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account; (d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; (e) On the basis of written representation received from the directors as on 31st March, 2008 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2008 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; (f ) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with significant accounting policies and other notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2008; (ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and (iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. For C.C. Chokshi & Co. Chartered Accountants Gaurav J. Shah Ahmedabad 15th May, 2008 Partner Membership No.35701
ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 3 of our report of even date) 1. The nature of the Company's business / activities during the year is such that the requirements of clause (xiii) and (xiv) of paragraph 4 of the Order are not applicable to the Company. 2. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The Company has a programme of physical verification of its fixed assets over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, certain fixed assets have been physically verified by the management during the year and according to the information and explanations given to us, no material discrepancies have been noticed on such verification. As regards underground distribution systems, we have been informed that the same are not physically verifiable. (c) The Company has not disposed off a substantial part of fixed assets during the year. 3. (a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals. (b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business. (c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification. 4. (a) The Company has not granted loans secured / unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Under the circumstances sub clauses (iii)(a) to (iii)(d) are not applicable. (b) The Company had taken loan from a company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 110 crores and the year end balance was Rs. Nil. (c) According to the information and explanations given to us, the rate of interest and other terms and conditions on which the loan has been taken from the company covered in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company. (d) In respect of the above-stated loan taken from the company, the repayment of principal and interest were regular during the year. 5. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services and we have not observed any continuing failure to correct major weaknesses in such internal controls. 6. In respect of transactions that need to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956: (a) The particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956, have been so entered; (b) The transactions have been made at prices which are reasonable having regard to the prevailing market
25
prices at the relevant time. No such transactions have been recorded in the said register in respect of sale of electricity as the Company is of the view that such transactions being for cash at prevailing market prices do not require to be entered in the register maintained under Section 301 of the Companies Act, 1956. 7. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under, where applicable, with regard to the deposits accepted from the public. During the year, the Company has not accepted public deposits as defined under section 58A of the Companies Act, 1956. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal. 8. In our opinion, the Company has an adequate internal audit system commensurate with its size and nature of its business. 9. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 in respect of generation and distribution of electricity and are of the opinion that prima facie the prescribed accounts and records have been maintained. We have not, however, made a detailed examination of the said records. 10. (a) According to the information and explanations given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty and excise duty were outstanding, as at 31st March 2008 for a period of more than six months from the date they became payable. (c) According to the information and explanations given to us, there are no dues of wealth tax, excise duty and cess which have not been deposited on account of any dispute. In respect of custom duty, sales tax and income tax, the following dues have not been deposited on account of dispute:
Description Custom Duty on Higher Assessment Value Custom Duty on Higher Assessment Value Custom Duty on Higher Assessment Value Sales Tax on Works Contracts Sales Tax on Works Contracts Sales Tax on Works Contracts Sales Tax on Works Contracts Sales Tax on Works Contracts Sales Tax on Works Contracts Income Tax Act, 1961 Income Tax Act, 1961
Amount (Rs. in Crore) 0.16 0.28 6.78 0.24 0.11 0.29 0.15 0.09 0.13 4.52 5.33
Forum where dispute is pending The Customs, Excise and Service Tax Appellate Tribunal, Mumbai Supreme Court of India, New Delhi Commissioner of Appeal, Jamnagar Sales Tax Appellate Tribunal, Calicut, Appellate Tribunal, Cuttak Andhra Pradesh High Court Sales Tax Appellate Tribunal, Andhra Pradesh Sales Tax Tribunal, Orissa Sales Tax Appellate Tribunal, Calicut. Income-tax Appellate Tribunal Gujarat High Court
11. The Company has been registered for a period less than five years and neither it has any accumulated losses nor cash losses during the financial year covered by our audit and the immediately preceding financial period. 12. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks. The Company has not issued any debentures. 13. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 14. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. 15. In our opinion, the term loans have been applied for the purpose for which they were raised except to the extent the funds deployed temporarily elsewhere pending application for the specified purpose. 16. According to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, funds raised on short term basis have, prima facie, not been used during the year for long term investment. 17. The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. 18. The Company has not issued any debentures during the year. 19. The Company has not raised money by public issue during the year. 20. To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company was noticed or reported during the year except in case of theft of electricity reported by the vigilance department of the Company, the amount for which is not ascertainable.
For C.C. Chokshi & Co. Chartered Accountants Gaurav J. Shah Ahmedabad 15th May, 2008 Partner Membership No.35701
27
BALANCE SHEET
AS AT 31ST MARCH, 2008
(Rs in crores) Schedule As at 31st March, 2008 As at 31st March, 2007
SOURCES OF FUNDS Shareholders' Funds Share Capital Reserves and Surplus Loan Funds Secured Loans Unsecured Loans Other Fund Service Line and Security Deposits from Consumers Deferred Tax Liability (net) APPLICATION OF FUNDS Fixed Assets Gross Block Less: Depreciation Net Block Capital Work-in-Progress Investments Current Assets, Loans and Advances Interest accrued on Investments and Deposits Inventories Sundry Debtors Cash and Bank Balances Loans and Advances Less: Current Liabilities and Provisions Current Liabilities Provisions Net Current Assets
1 2
472.45 2,417.31 2,889.76 2,476.00 61.25 2,537.25 334.68 92.73 5,854.42
472.45 2,232.93 2,705.38 1,464.23 162.89 1,627.12 300.80 31.51 4,664.81
3 4
6 7
3,689.23 517.37 3,171.86 2,827.90 5,999.76 61.88 0.43 165.80 412.80 185.88 467.09 1,232.00
2,985.67 364.22 2,621.45 2,247.56 4,869.01 125.33 2.00 152.80 342.76 41.29 355.88 894.73 801.93 422.33 1,224.26 (329.53) 4,664.81
8 834.23 604.99 1,439.22 (207.22) 5,854.42
Significant Accounting Policies Notes on Accounts
14 15
As per our report of even date For C.C. Chokshi & Co. Chartered Accountants Gaurav J. Shah Partner Ahmedabad, 15thMay, 2008
Sudhir Mehta Chairman Samir Mehta Director Rajiv Shah Company Secretary Ahmedabad, 15th May, 2008
PROFIT & LOSS ACCOUNT

FOR THE YEAR ENDED 31st MARCH, 2008
(Rs in crores) Schedule Year ended 31st March, 2008 Six Months ended 31st March, 2007
INCOME Sale of Electrical Energy Net Income of Services Division Net Income of Fly-Ash Division Insurance Claim Receipt Other Income
9 10 11
3,618.32 7.28 (0.09) 8.28 88.21 3,722.00
1,388.07 3.97 (0.25) 7.83 46.73 1,446.35 718.77 513.24 19.43 68.45 3.23 65.22 1,316.66 129.69 16.77 0.54 40.60 71.78 0.02 71.76 82.73 154.49
EXPENDITURE Electrical Energy Purchased Generation, Distribution, Administration and Other Expenses 12 Interest and Finance Charges 13 Depreciation Less: Transfer from Service line contribution and APDRP Grant
1,932.47 1,205.24 59.78 156.33 8.39 147.94 3,345.43 376.57 79.77 1.06 61.22 234.52 23.28 211.24 127.87 339.11
Profit Before Tax Provision for Current Tax {(Including Rs.0.05 crore for Wealth tax) ( 31st March,2007 Rs. 0.05 crore)} Fringe Benefit Tax Provision for Deferred Tax Profit After Tax Before Exceptional Items Short Provision of Taxation for earlier years Net Profit for the year Balance brought forward from Previous period Amount available for Appropriations APPROPRIATIONS General Reserve Interim Dividend Proposed Dividend Corporate Dividend Tax Balance Carried to Balance Sheet Basic and Diluted Earnings per Share of face value of Rs. 10 each (in Rupees) (Refer Note17, Schedule 15) Significant Accounting Policies Notes on Accounts As per our report of even date For C.C Chokshi & Co Chartered Accountants Gaurav J. Shah Partner Ahmedabad, 15thMay, 2008 14 15
140.00 56.69 9.64 206.33 132.78 339.11 4.47
5.07 18.90 2.65 26.62 127.87 154.49 1.52
29
CASH FLOW STATEMENT

FOR THE YEAR ENDED 31ST MARCH,2008
Year ended 31st March, 2008 Cash Flow from Operating Activities Net Profit before tax Adjustments for : Depreciation Excess provision written back Interest expenses Profit or Loss on Sale / redemption of investment(net) Loss on sale of fixed assets Dividend / Interest Operating Profit before Working Capital Changes Adjustments for : Trade and their Receivables Inventories Current Liabilities and Provisions Service line and Security Deposits Interest on Security Deposits Cash Generated from Operations Taxes Paid Net Cash Flow from Operating Activities Cash Flow from Investing Activities Purchase of fixed assets Sale of fixed assets Purchase of investments Sale of investments Dividend and interest received from investments Net Cash used in Investing Activities Cash Flow from Financing Activities Long Term borrowings Unsecured loan Repayment of fixed deposits Repayment of borrowings Repayment of APDRP Loan Service line contribution Dividend paid Interest Paid Net Cash used in Financing Activities Net increase / ( decrease ) in Cash and Cash Equivalents Cash and Cash Equivalents as at 01-04-2007 Cash and Cash Equivalents as at 31-03-2008 Note: Cash and Cash Equivalents as at end of the year: Cash and Bank Balances Current Investments (Investments in Mutual Funds) 376.57 147.94 (0.40) 59.78 10.07 (7.29) 586.67 (91.87) (13.00) 31.47 33.88 (13.26) 533.89 (88.63) 445.26 (1,299.29) 2.16 (22.24) 62.26 8.86 (1,248.25) 1,178.95 150.00 (0.03) (417.18) (1.64) 54.19 (0.01) (33.79) 930.49 127.50 84.45 211.95 185.88 26.07 211.95
(Rs in crores) Six Months ended 31st March, 2007 129.69 65.22 (2.91) 18.91 0.01 5.73 (6.60) 210.05 10.92 (58.85) 269.20 7.84 (0.37) 438.79 (29.76) 409.03 (1,436.02) 1.00 (0.03) 17.86 7.04 (1,410.15) 931.15 100.00 (0.01) (26.24) (0.89) 26.32 (85.75) (39.39) 905.19 (95.93) 180.38 84.45 41.29 43.16 84.45 Sudhir Mehta Chairman Samir Mehta Director Rajiv Shah Company Secretary
Ahmedabad, 15th May, 2008
SCHEDULES
FORMING PART OF THE BALANCE SHEET
SCHEDULE '1' : SHARE CAPITAL

As at 31st March, 2008 Authorised: 2,00,00,00,000 Equity Shares of Rs.10/- each 2,000.00 2,000.00
(Rs in crores) As at 31st March, 2007
2,000.00 2,000.00
Issued, Subscribed and Paid up: 472,448,308 Equity Shares of Rs.10/- each 472.45 472.45 472.45 472.45
248,940,991 equity shares (258,240,991 equity shares as on 31st March 2007) of Rs 10/- each fully paid up are held by holding company i.e. Torrent Private Limited . 472,435,808 equity shares(472,435,808 equity shares as on 31st March,2007) of Rs. 10/- each fully paid up were issued pursuant to the Scheme of Amalgmation between the erstwhile Torrent Power AEC Ltd, Torrent Power SEC Ltd and Torrent Power Generation Limited.
31
SCHEDULE '2' : RESERVES AND SURPLUS

As at 31st March, 2008 Capital Reserves Service Line Contributions As per last Balance Sheet Contributions during the year Less: Transfer to Profit and Loss Account Grant in Aid under Accelerated Power Development and Reform Programme As per last Balance Sheet Less: Transfer to Profit and Loss Account 40.24 2.11 38.13 Statutory Reserves Contingency Reserve As per last Balance Sheet Less : Loss on sale of Contingency Reserve Investments 79.43 6.33 73.10 Tariff and Dividend Control Reserve As per last Balance Sheet Other Reserves General Reserve As per last Balance Sheet Add: Transfer from Profit and Loss Account 1,875.00 140.00 2,015.00 Balance in Profit and Loss Account 132.78 2,417.31 1,869.93 5.07 1,875.00 127.87 2,232.93 11.59 11.59 79.43 79.43 41.30 1.06 40.24 98.80 54.19 152.99 6.28 146.71 74.65 26.32 100.97 2.17 98.80 (Rs. in crores) As at 31st March, 2007
SCHEDULE '3' : SECURED LOANS

(Rs. in crores)
As at 31st March, 2008 Rupee Term Loans : From Financial Institutions From Banks From Other Working Capital Loans: Cash Credit Arrangements with Bank Of the above : 1. 3.36 2,476.00 1,277.88 1,131.51 63.25
As at 31st March, 2007
766.75 683.28 -
14.20 1,464.23
2.
3.
4.
5. 6.
Amount of Rs.25.00 crores (31st March, 2007 Rs. 63.20 crores) from a financial institution is secured by first charge by way of hypothecation of all movables (except book debts), and by way of equitable mortgage of all immovable properties, present and future, situated at Ahmedabad and Gandhinagar, both subject to prior charges created and/or to be created in favour of bankers for securing the borrowing for working capital requirements in the ordinary course of business. Amount of Rs.64.29 crores (31st March, 2007 Rs. 78.57 crores) from a financial institution is secured by first charge by way of hypothecation of all movables (except book debts), and by way of equitable mortgage of all immovable properties, present and future, situated at Surat, both subject to prior charges created and/or to be created in favour of bankers for securing the borrowing for working capital requirements in the ordinary course of business. Amount of Rs.1188.59 crores (31st March, 2007 Rs.624.98 crores) and Rs.1131.51 crores (31st March, 2007 Rs.683.28 crores) from financial institutions and Banks respectively, are secured by first charge by way of hypothecation of all movables (except book debts),and by way of equitable mortgage of all immovable properties, present and future, both subject to prior charges created and/or to be created in favour of bankers for securing the borrowing for working capital requirements in the ordinary course of business. However, the creation of equitable mortgage in respect of loans is pending. Amount of Rs.63.25 crores (31st March, 2007 nil) from other is secured by second charge by way of equitable mortgage of all immovable properties, present and future, situated at village Akhakhol, Surat relating to 1147.5 MW Project, both subject to prior charges created and/or to be created in favour of bankers for securing the borrowing for working capital requirements in the ordinary course of business. Working Capital facilities from Banks are secured by charge on current assets of the company. Amount of Rs.241.99 crores (31st March, 2007 Rs.166.68 crores) is repayable within one year. (Rs. in crores) As at 31st March, 2007 62.89 100.00 162.89
SCHEDULE '4' : UNSECURED LOANS As at 31st March, 2008 Term Loan from Government of India under Accelerated Power Development and Reform Programme From Bank 61.25 61.25
Of the above amount of Rs.1.64 crores (31st March, 2007 Rs. 101.83 crores) is repayable within one year.
33
SCHEDULE '5' : FIXED ASSETS

(Rs. in crores)
Particulars
As at 1-Apr-07 (See Note 1 below)
GROSS BLOCK
Additions during the year Deduction during the year
DEPRECIATION / AMORTISATION
Up to As at 31st March, 31st March, 2007 2008 Addition during the year Deduction during the year
NET BLOCK
Up to As at As at 31st March, 31st March, 31st March, 2008 2008 2007
Land (a) Freehold (b) Leasehold Buildings Railway siding Plant and Machinery (a) Steam Station (b) Others including Switchgears and Transformers Transmission and Distribution systems (a) Overhead (b) Underground Electrical Fittings and Apparatus Furniture, Fixture and Office Equipments Vehicles Intangible Assets Software Total Previous period Capital Work-in-Progress
31.67 34.20 67.89 0.52
35.93 7.07 29.18 -
0.10 *
67.60 41.27 96.97 0.52
0.55 3.26 0.05
0.26 1.46 0.02
0.01 *
0.81 4.71 0.07
67.60 40.46 92.26 0.45
31.67 33.65 64.63 0.47
577.53
5.15
0.46
582.22
82.38
30.49
0.07
112.80
469.42
495.15
1,069.66
278.41
11.38
1,336.69
144.34
58.48
2.71
200.11
1,136.58
925.32
143.40 1,013.10
125.63 212.55
1.08 2.00
267.95 1,223.65
25.48 97.68
8.69 51.63
0.19 0.25
33.98 149.06
233.97 1,074.59
117.92 915.42
15.38
9.35
0.26
24.47
2.32
0.87
0.07
3.12
21.35
13.06
23.60 7.55
12.21 2.84
0.03 0.44
35.78 9.95
5.08 2.50
3.21 0.94
0.01 0.21
8.28 3.23
27.50 6.72
18.52 5.05
1.17 2,985.67 2,799.97
0.99 719.31 193.97
15.75 8.27
2.16 3,689.23 2,985.67
0.58 364.22 297.17
0.62 156.67 68.58
3.52 1.53
1.20 517.37 364.22
0.96 3,171.86 2,621.45 2,827.90 5,999.76
0.59 2,621.45 2,247.56 4,869.01
Notes : 1 Additions during the year and Capital Work-in-Progress includes borrowing cost of Rs.223.34 crores (31st March 2007 Rs. 52.13 crores), which are directly attributable to purchase/construction of qualifying assets in accordance with Accounting Standard - 16 "Borrowing Costs" issued by the Institute of Chartered Accountants of India Capital Work-in-Progress includes Preoperative Expenditure of Rs.48.53 crores (31st March 2007 Rs. 32.49 crores) (see note - 6 of Schedule 15). The Company has leased a portion of its land to AEC Cements & Constructions Limited. Land includes freehold land at Chandkheda amounting to Rs.0.04 crore (31st March, 2007 Rs 0.04 crore) and leasehold land at Kathwada, Prahladnagar, Ghatlodia-Chandlodia, Gulbai Tekra, Vastral, Bodakdev,Sarangpur, Cantonement area and Pirana amounting to Rs. 14.13 crores (31st March, 2007 Rs. 7.20 crores) for which documentations are in progress.
2 3 4
SCHEDULE 6 : INVESTMENTS (AT COST)

(Rs. in crores)
No.of Units 31-03-2008 A. LONG TERM INVESTMENTS Contingency Reserve Investments (Quoted): 5.30% Nuclear Power Corporation Limited Tax Free Bonds -2007 6.20% Andhra Pradesh State Development Loan -2015 6.20% Tamilnadu State Development Loan - 2015 11.70% ICICI Bond - 2011 9.00% Power Finance Corporation - 2009 9.75% ICICI Bond - 2007 7.00% Power Finance Corporation - 2011 7.95% Power Finance Corporation - 2016 7.49% GOI BOND - 2017 10.47% GOI BOND - 2015 11.43% GOI BOND - 2015 11.83% GOI BOND - 2014 7.94% GOI BOND - 2021 10.25% GOI BOND - 2021 8.70% IIFCL - 2021 11.50% IFCI - 2009 12.00% IFCI - 2012 7.35% ILFS - 2008 11.50% GOI BOND - 2011 7.40% GOI BOND - 2012 6.85% GOI BOND - 2012 7.27% GOI BOND -2013 6.20% Andhra Pradesh State Loan - 2015 6.20% Karnataka State Loan - 2015 6.20% Tamilnadu State Loan - 2015 11.25% ICICI Bank Ltd. - 2016 9.75% ICICI Bank Ltd.- 2007 9.25% Power Finance Corporation - 2012 3.00% Calcutta Port Trust Debentures Other Investments: Quoted 11.40% APPFC - 2009 11.50% Haryana State Loan 11.50% Punjab State Loan 11.50% Tamilnadu State Loan 12.00% Uttar pradesh State Loan Unquoted Investment in Subsidiary Torrent Power Grid Limited Equity Shares of Rs 10/- each fully paid up Equity Shares of Rs 10/- each Partly paid up (Rs.5/- paid) Torrent Pipavav Generation Limited Equity Shares of Rs 10/- each fully paid up Trade Torrent Energy Limited Equity Shares of Rs 10/- each fully paid up AEC Cements & Constructions Ltd Equity Shares of Rs.10/- each fully paid up Less: Provision for diminution in value of investment No.of Units 31-03-2007 Face Value As at 31st March, 2008 As at 31st March, 2007
500
200 500 400 10 50 50
10 50
20 10 50 2000
2.00 3.50 3.50 5.00 4.00 1.00 5.00 5.00 2.50 5.00 5.00 2.00 6.00 6.00 2.00 0.20 0.08 0.25 1.50 1.65 1.15 1.50 1.50 2.50 3.00 2.40 0.01
6.61 * 0.01 0.10 1.51 1.69 3.29 0.01 13.22
2.03 3.56 3.56 6.61 4.35 1.11 4.97 4.90 2.51 6.13 6.52 2.63 6.07 7.22 2.02 * 0.01 0.20 0.10 0.27 1.51 1.69 1.17 1.53 1.53 3.29 3.34 2.63 0.01 81.47
0.07 0.01 * 0.02 0.10
0.10 0.07 0.01 * 0.02 0.20
36500 44363000 40000
36500 -
0.04 44.36 0.04
0.04 22.18 0.04
0.04 -
22500 611500 611500
0.02 0.61
0.02 0.61 0.61 -
0.61 0.61 -
Other Gujarat Venture Capital Fund-1995-Contribution Total (A)
0.21 22.59 35.81
0.46 0.70 82.17
35
SCHEDULE 6 : INVESTMENTS (Contd)

(Rs. in crores)
No.of Units 31-03-2008 B. CURRENT INVESTMENT In Units - (Unquoted) HDFC Liquid Fund Plan HDFC Liquid Fund Plan HDFC Liquid Fund Plan 2455718 HDFC Cash Management Fund 5998269 Prudential ICICI Institutional Liquid Plan Prudential ICICI Institutional Liquid Plan Prudential ICICI Institutional Liquid Plan 5017796 Prudential ICICI Institutional Liquid Plan 2007118 Templeton India Treasury Management Account DSP Merrill Lynch Liquidity Fund DSP Merrill Lynch Liquidity Fund DSP Merrill Lynch Liquidity Fund DSP Merrill Lynch Liquidity Fund 50151 Grindlay Liquidity Manager Grindlay Liquidity Manager Birla Cash Surplus 2003899 Kotak Liquid Plan 2461816 Total (B) {Aggregate NAV.of Investments in Mutual Funds Rs. 26.07 Crores (31st March 2007) (Rs 43.16 crores)} Total (A+B) Aggregate book value of quoted investments Aggregate book value of unquoted investments Total Market Value of Quoted Investments Current Investments purchased and sold during the year Birla cash plus Birla cash plus DSP ML Liquidity Fund DSP ML Liquidity Fund Grindlays Liquidity Manager Plus Grindlays Liquidity Manager Plus HDFC Cash Management Fund HDFC Liquid Fund HDFC Liquid Fund Kotak Liquid Fund Kotak Liquid Fund Prudencial ICICI Liquid Plan-sp Prudencial ICICI Liquid Plan-sp Templeton Liquid Fund Templeton Liquid Fund Templeton Liquid Fund -Sp HDFC Liquid Fund Kotak Liquid (Institutional premium) ICICI Prudential Liquid Plan ICICI Prudential Liquid Plan No of Units 18,963,022 10,165,184 1,709,658 413,278 559,883 154,821 2,991,068 190,052,040 44,003,111 24,533,656 5,152,973 179,993,600 45,591,474 69,983 210,462 339,915 6,729,310 4,497,837 11,351,666 2,244,770 Rs. in crores 19.00 14.00 171.00 46.00 56.00 17.00 3.00 233.00 67.00 30.00 8.00 180.00 52.00 7.00 27.00 34.00 8.25 5.50 12.00 4.25 No.of Units 31-03-2007 Face Value As at 31st March, 2008 As at 31st March, 2007
4104196 4095001
2018680 4011736
50028 40217 50255 50026 50187 30025
5.00 5.00 3.00 6.00 2.00 4.00 5.00 2.00 5.00 4.00 5.00 5.00 5.00 5.00 3.00 2.00 3.00
3.01 6.01 5.02 2.01 5.01 2.00 3.01 26.07
5.03 5.02 2.02 4.01 5.00 4.02 5.03 5.00 5.02 3.01 43.16
61.88 13.32 48.56 61.88 11.27
125.33 81.67 43.66 125.33 73.44
SCHEDULE '7' : CURRENT ASSETS, LOANS AND ADVANCES

(Rs. in crores) As at As at 31st March, 2008 31st March, 2007 CURRENT ASSETS Interest Accrued On Investments and Deposits Inventories Coal, Oil, Stores and Spares
{Includes Goods in transit Rs.44.52 crores (31st March 2007 Rs. 16.96 crores)}
0.43 165.80
2.00 152.80
Sundry Debtors Debts outstanding for a period exceeding six months Secured Considered good Unsecured Considered good Considered Doubtful Other Debts Secured Unsecured
5.00 9.42 41.99 56.41 108.77 289.61 14.79 413.17 56.78 412.80
6.88 13.21 6.37 26.46 98.98 223.69 0.74 323.41 7.11 342.76
Considered good Considered good Considered Doubtful
Less : Provision for Doubtful Debts
Cash and Banks Balances Cash and Cheques on hand

{including Cheques on hand of Rs.9.11 crores (31st March 2007 Rs. 9.17 crores)}
9.80 14.82 161.04 0.02 0.04 0.02 * 0.14 185.88
9.49 12.44 19.19 0.02 0.02 0.06 * 0.07 41.29
Balance with scheduled bank In Current Accounts Fixed Deposits Accounts Balance with other Banks in Current Accounts Nepal Grindlays Bank Ltd.
Maximum balance during the year Rs.0.02 crore (31st March 2007 Rs. 0.02 crore )
The City Co-operative Bank Ltd.

Maximum balance during the year Rs.0.45 crore (31st March 2007 Rs.0.52 crore)
The Associate Co-operative Bank Ltd.

Maximum balance during the year Rs.0.68 crore (31st March 2007 Rs. 0.64 crore)
The Surat Mahila Nagrik Sahakari Bank Ltd.

Maximum balance during the year Rs.0.08 crore (31st March 2007 Rs. 0.08 crore)
The Surat Mercantile Co-operative Bank Ltd.

Maximum balance during the year Rs.1.53 crores (31st March 2007 Rs.1.06 crores)
LOANS & ADVANCES Unsecured (Considered Good Unless Otherwise Stated) Advances recoverable in cash or kind or for value to be received Less: Provision for Doubtful Advances Advances and Loans to Subsidiary Company Balance with Government Authority Advance Tax and Tax deducted at source
58.77 5.00 53.77 0.57 0.59 412.16 467.09 1,232.00
38.91 6.40 32.51 0.58 322.79 355.88 894.73
Note : Advances recoverable in cash or kind or for value to be received includes an amount of Rs.5.00 crores (31st March 2007 Rs. 6.40 crores) and Rs 1.88 crores (31st March 2007 Nil) recoverable from AEC Cements & Constructions Limited and Torrent Energy Limited respectively, companies under the same management { maximum amount outstanding during the year Rs. 6.40 crores (31st March 2007 Rs.6.40 crores)and Rs 1.88 crores (31st March 2007 nil) for AEC Cements & Constructions Limited and Torrent Energy Limited respectively}.
37
SCHEDULE '8' : CURRENT LIABILITIES AND PROVISIONS

(Rs. in crores) As at 31st March, 2008 CURRENT LIABILITIES Sundry Creditors (Refer Note 8 of Schedule 15) Investors Education and Protection Funds shall be credited by the following: Unclaimed Dividends Unclaimed Amount of Debentures and Interest thereon Unclaimed Fixed Deposits and Interest thereon Consumers Benefit Account Credit Balances of Consumers Interest Accrued but not Due on Loans and Security Deposits PROVISIONS Provision for Gratuity and other fund Provision for Leave Encashment Provision for Taxation Proposed Dividend Provision for Corporate Dividend Tax 35.14 72.42 431.10 56.69 9.64 604.99 1,439.22 33.90 62.18 326.25 422.33 1,224.26 0.99 * 0.03 12.01 31.38 32.86 834.23 1.00 * 0.05 12.01 26.19 20.13 801.93 756.96 742.55 As at 31st March, 2007
SCHEDULE '9 : NET INCOME OF SERVICE DIVISION

(Rs. in crores) Year ended Six Months ended 31st March, 2008 31st March, 2007 INCOME Value of Contracts Billed and Service Charges [Tax Deducted at Source Rs. * (31st March 2007 Rs. * )] Miscellaneous Income Recovery of Bad Debts Provisions no longer required written back Increase / (Decrease) in Work in Progress EXPENDITURE Cost of Materials Labour Charges Salaries, Wages and Bonus Provision for Gratuity Provision for Leave Encashment Contribution to Provident and Other Funds Employees' Welfare Expenses Insurance Legal Expenses Rates and Taxes Other Expenses Loss on Assets Discarded Depreciation Capital Tools Written Off Provision for Doubtful Debts [Net of Recovery Nil (31st March 2007 Rs.0.08 crore)] 3.56 NET INCOME 7.28 2.81 3.97 0.30 2.05 1.03 0.07 * * * 0.01 0.10 1.32 0.38 0.88 0.03 0.01 0.08 0.01 * 0.01 0.14 0.02 * 0.01 (0.08) 0.10 0.01 0.40 10.84 0.75 0.01 1.70 (0.56) 6.78 10.33 4.88
39
SCHEDULE '10 : NET INCOME OF FLY ASH DIVISION

(Rs. in crores) Year ended Six Months ended 31st March, 2008 31st March, 2007 INCOME Other Income EXPENDITURE Salaries, Wages and Bonus Provision for Gratuity Contribution to Provident Fund and E.S.I Other Expenses Loss on Assets Discarded Capital Tools Written Off Depreciation NET INCOME/(LOSS) 0.06 0.02 0.01 * 0.09 (0.09) 0.01 0.01 0.03 0.01 * * 0.19 0.02 0.01 0.26 (0.25)
SCHEDULE '11 : OTHER INCOME (Rs. in crores)

Year ended Six Months ended 31st March, 2008 31st March, 2007
Street Lighting Maintenance Contracts

[Tax Deducted at Source Rs.0.14 crore (31st March 2007 Rs. 0.12 crore)]
4.51 34.01 33.76 0.78 7.86 1.77 1.72 3.80
2.36 16.51 17.49 1.21 0.31 2.25 3.24 2.64 0.72
Hire of Meters Miscellaneous Income Provisions no longer required written back Profit on Sale/Redemption of Current Investments Recovery of Bad Debts Interest from Contingency Reserve Investments
[Tax Deducted at Source Rs 0.20 crore (31st March 2007 Rs. 0.36 crore)]
Dividend Other Interest (Gross)

88.21
46.73
SCHEDULE '12' : GENERATION, DISTRIBUTION, ADMINISTRATION AND OTHER EXPENSES

(Rs. in crores) Year ended Six Months ended 31st March, 2008 31st March, 2007
Fuel [after credit of claims of Rs.6.34 crores (31st March 2007 Rs.1.39 crores)] Consumption of Stores and Spares Rent and Hire Charges Repairs to Buildings Plant and Machinery Others Salaries & Wages Salaries, Wages and Bonus Contribution to Provident and Other Funds Employees Welfare Expenses Provison of Gratuity and Leave encashment Discount for prompt payment of bills Insurance Rates and Taxes Miscellaneous Expenses Amalgamation Expenditure Service Line Charges for Sub-Stations Loss on Sale of Investments Loss on Sale of Fixed Assets (net) Commission to Non Executive Directors Audit Fees Legal, Professional and Consultancy fees Donations Provision for doubtful debts / Bad debts written off Net of Provision of Rs 1.41 crores (31st March, 2007 Rs. 0.46 crore)
741.48 67.39 2.54 8.19 131.75 7.75 147.69 187.75 8.99 9.21 23.53 229.48 33.75 10.76 3.56 51.94 10.07 0.12 0.18 2.17 7.21 50.80 1,359.14 153.90 1,205.24
310.21 37.40 0.81 4.43 76.27 3.86 84.56 71.04 4.26 4.60 10.05 89.95 13.49 9.57 1.79 22.56 0.04 0.23 0.01 5.56 0.06 0.09 0.98 0.85 2.63 580.79 67.55 513.24
Less: Allocated to Capital Works, Repairs and Other Relevant Revenue Accounts
SCHEDULE '13' : INTEREST AND FINANCE CHARGES

(Rs. in crores) Year ended Six Months ended 31st March, 2008 31st March, 2007 Interest on Term Loans Interest on Security Deposits from Consumers Others including Finance Charges 22.10 21.38 16.30 59.78 10.20 6.66 2.57 19.43
41
SCHEDULE 14: SIGNIFICANT ACCOUNTING POLICIES 1. Basis of Preparation of Financial Statements: The Company has applied provisions of the Companies Act, 1956 for preparation of its financial statements. The Financial statements are prepared and presented under the historical cost convention on accrual basis of accounting, in accordance with the accounting principles generally accepted in India and comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India. Accounting policies have been followed consistently except stated specifically.
2.
Use of Estimates: The presentation of financial statements requires certain estimates and assumptions. These estimates and assumptions affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known/materialized.
3.
Capital Receipts: (i) Grant received under the Accelerated Power Development and Reforms Programme (APDRP) of the Ministry of Power, Government of India, is treated as capital receipt and accounted as Capital Reserve. Service line contributions received from consumers are treated as capital receipt and accounted as Capital Reserve.
(ii)
4.
Revenue Recognition: (i) (ii) (iii) (iv) (v) (vi) (vii) Revenue (income) is recognized when no significant uncertainty as to the measurability or collectability exists. Dividend is accounted when the right to receive payment is established. Interest on overdue receivables of energy bills, insurance, coal and other claims, casual income etc. are accounted on grounds of prudence, as and when recovered. Services Division revenue is recognized when the contract is completed. Losses are recognized as and when they arise. All expenses are accounted on accrual basis except leave travel concession, educational allowance and medical reimbursement to employees which are accounted on payment basis. Allocation of indirect expenses to capital/revenue account is done on the basis of technical evaluation by the Management. Material items of prior period expenses, non-recurring and extra-ordinary expenses are disclosed separately.
5.
Inventories: (i) (ii) Inventories are valued at weighted average cost or net realizable value whichever is lower. Work-in-Progress in respect of Services Division and Finished Goods of Fly-Ash Division are valued at cost or net realizable value whichever is lower.
6.
Investments: Investments are classified into current and long term investments. Current investments are stated at the lower of cost and fair value. Long term investments are stated at cost less any provision for permanent diminution .
7.
Fixed Assets: Fixed Assets are stated at historical cost less accumulated depreciation. Advances given to suppliers for identified capital project/ expenditure are included in Capital Work-in-Progress. Certain computer software costs are capitalised and recognised as Intangible assets based on materiality, accounting prudence and significant benefits there from expected to flow for a period longer than one year.
8.
Impairment of Fixed Assets: Fixed Assets are reviewed for impairment losses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the carrying amount of the assets exceeds its recoverable amount, which is the higher of an assets' net selling price and value in use.
9.
Expenditure During Construction Period: Expenditure incurred during construction/pre-operative period including interest and finance charges on specific loans, prior to commencement of commercial operation is capitalised and interest on temporary investments of the specific loan funds earned during the construction period is deducted from the total of the capital expenditure.
10.
Borrowing Costs: Borrowing costs comprising interest, finance charges, etc. to the extent related/attributed to the qualifying assets, such as new projects and/or specific assets created in the existing business, are capitalised up to the date of completion and ready for their intended use. Other borrowing costs are charged to the profit and loss account in the period of their accrual.
11.
Depreciation and Amortisation: The depreciation for the year is provided on additions / deductions of the assets during the period
43
from/up to the month in which the asset is added / deducted. The depreciation for the year has been shown after reducing the proportion of the amount of depreciation provided on assets created against the service line contribution & APDRP Grant received. In respect of the assets of Services Division, depreciation is provided on WDV Method at the rates and in the manner provided under Schedule XIV of the Companies Act, 1956. In respect of assets pertaining to Bhiwandi Distribution Circle, depreciation is provided on SLM at the rates mentioned below, as provided in the Distribution Franchise Agreement which rates are higher than the rates prescribed under Schedule XIV to the Companies Act, 1956. Transformers, Switch Gears & Equipments Meters Distribution Systems - Overhead - Underground Others Vehicles Electrical fittings, Apparatus, Furniture Fixtures, Communication equipments and office equipments 7.84% 12.77% 7.84% 5.27% 7.84% 33.40% 12.77%
Leasehold land is amortized over the lease period. Computer Software costs are amortised over its useful life estimated at 3 years. In respect of all other assets, the depreciation is provided on SLM at the rates prescribed under Schedule XIV to the Companies Act, 1956. 12. Transactions in Foreign Currency: (i) (ii) (iii) (iv) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currencies at the period end are restated at period end rates. Non monetary foreign currency items are carried at cost. Any income or expense on account of exchange difference either on settlement or on transaction is recognized in the profit and loss account.
13.
Retirement and Other Employee Benefits: Retirement Benefits in the form of Provident Fund, Family Pension Fund and Superannuation Schemes, which are defined contribution schemes, are charged to the profit and loss account of the period in which the contributions to the respective funds accrue.
The Company has created Employees Group Gratuity Fund which has taken a Group Gratuity Insurance Policy from Life Insurance Corporation of India (LIC). Premium on the above policy as intimated by LIC is charged to the profit and loss account. The adequacy of balances available is compared with actuarial valuation obtained at the period-end and shortfall, if any, is provided for in the profit and loss account. Provision for leave encashment is determined and accrued on the basis of actuarial valuation. Actuarial gains and losses are immediately recognized in the profit and loss account and are not deferred. 14. Taxation : Provision for Current tax is made on the basis of estimated taxable income for the current accounting period and in accordance with the provisions of the Income Tax Act, 1961. Deferred tax resulting from timing differences between accounting and taxable profit for the period is accounted for using the tax rates and laws that have been enacted or substantively enacted as at the balance sheet date. Deferred tax assets is recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such assets can be realized. Provision for Fringe benefit tax is made on the basis of estimated taxable liabilities for the period. 15. Provisions, Contingent Liabilities and Contingent Assets: Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Liabilities which are of contingent nature are not provided but are disclosed at their estimated amount in the Notes to the Accounts. Contingent assets are neither recognized nor disclosed in financial statements.
45
SCHEDULE 15: NOTES ON ACCOUNTS (Rs. in crores)

As at 31st March, 2008 As at 31st March, 2007
1.
Estimated amount of contracts remaining to be executed on Capital Accounts (Net of Advances) Contingent Liabilities not provided for in respect of: (i) Letters of Credit established & Guarantees given by banks on behalf of the Company (ii) Disputed Income-tax matters (iii) Disputed Sales-tax matters (iv) Disputed Custom Duty matters (v) Disputed Stamp Duty matter (vi) Uncalled liability on Partly Paid Investments
111.41
195.59
2.
436.53 10.22 0.21 0.44 0.26 22.18
573.57 32.06 0.21 0.44 0.26 -
3.
During the year, the Company promoted a new subsidiary company viz. Torrent Pipavav Generation Limited on 25th September, 2007. The Company has invested Rs.0.04 crore in the Equity Capital of the same. The previous financials of the Company were for Six months from 1st October, 2006 to 31st March, 2007 and included the financials for the operations of Bhiwandi distribution circle for the period from 26th January, 2007 to 31st March, 2007. As a result, the figures of the previous financial period are not comparable with the figures of the current year. The Company has given Loans and Advances to its associates as under. (Rs.in crores)
Name of Company Maximum amount outstanding during the year 6.40 1.88 Balance as on 31st March, 2008 5.00 1.88 6.88 Balance as on 31st March, 2007 6.40 6.40
4.
5.
AEC cements & Constructions Limited Torrent Energy Limited Total
6.
Pre-operative expenditure pending allocation to 1147.5 MW SUGEN Combined Cycle Power Plant under implementation till the date of the balance sheet are as under;
(Rs. in crores) As at 31st March, 2008 PRE OPERATIVE EXPENDITURE Salary, wages, bonus, gratuity and superannuation Advertisement Insurance Legal, Professional and Consultancy Fees Rates and Taxes Electricity Charges Miscellaneous Expenses Printing, Stationary, Postage and Telephone Repairs and Maintenance Traveling Expenses Auditors Remuneration Depreciation Loss on sale of Fixed Assets Provision for Wealth Tax Provision for Fringe Benefit Tax Total Expenditure 20.07 3.15 0.30 6.66 0.50 1.04 9.48 1.02 1.18 3.80 0.02 0.85 0.04 0.04 0.38 48.53 As at 31st March, 2007 12.32 2.13 0.19 5.97 0.47 0.78 5.12 0.74 0.91 3.04 0.01 0.50 * 0.03 0.28 32.49
7.
(i)
The Company uses forward contracts to hedge its risk associated with foreign currency fluctuation relating to firm commitments. The Company does not use forward contracts for speculative purposes. The following are the outstanding foreign exchange contracts:
No. of Contracts Foreign Currency INR Equivalent
1 - USD 10 Million - Rs.45.33 crores
(ii) 8.
Foreign currency exposure not hedged by derivative instruments as at 31st March, 2008 on capital imports amount to Rs 173.40 crores (Previous Period Rs.34.36 crores)
The Company has initiated the process of obtaining the confirmation from suppliers who have registered themselves under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006 ). Based on the information available with the Company, the balance due to Micro and Small Enterprises as defined under MSMED Act, 2006 is Rs.0.97 crore. No interest has been paid or payable under MSMED Act, 2006 during the year. The confirmations of some of the parties for the amounts due to them / amount due from them as per books of accounts are not received. Necessary adjustments, if any, will be made when the accounts are reconciled / settled. Employee Benefits The accounting liability on account of gratuity and leave (retirement benefit in the nature of defined benefits plan) is accounted as per AS 15 (revised 2005) dealing with Employee benefits. The Company operates a defined benefit plan (the Gratuity and Leave Plan) covering eligible employees, which provides a lump sum payment to vested employees at retirement ,death, incapacitation or termination of employment, of an amount based on the respective employees salary and tenure of employment. Status of gratuity and leave Plan as required under AS 15 [revised] :
9.
10.
47
As at 31st March, 2008 Privilege Gratuity Leave Encashment Particulars a. Reconciliation of opening and closing balances of the present value of the defined benefit obligation: Obligations at the beginning of the period Current Service cost Interest Cost Actuarial (gain) / loss Benefits paid Obligations at the end of the period b. Reconciliation of opening and closing balances of the fair value of plan assets: Plan assets at the beginning of the period, at fair value Expected return on plan assets Actuarial gain / (Loss) Contributions Benefits paid Plan assets at the end of the period, at fair value c. Reconciliation of the present value of the defined benefit obligation and fair value of plan assets: Obligations at the end of the period Plan assets at the end of the period, at fair value Liability recognized in Balance sheet as at 31st March, 2008 d. Cost for the period: Current service cost Interest cost Expected return on plan assets Net Actuarial gain / (loss) Net Cost included in Schedule 9,10 and 12 of the profit and loss account e. Investment details of plan assets: Contributions to fund the obligations under the gratuity plan are made to Life Insurance Corporation of India, who has invested the funds substantially in the government securities. f. Assumptions Interest rate Expected rate of return on plan assets (Yield on long term bonds of Central Government prevailing on 31st March, 2008) g.
(Rs. in crores) As at 31st March, 2007 Privilege Gratuity Leave Encashment
62.18 3.86 4.83 5.06 (3.51) 72.42
90.16 4.47 7.21 3.23 (6.30) 98.77
57.66 2.56 2.25 2.61 (2.90) 62.18
86.18 1.98 3.45 0.10 (1.55) 90.16
56.35 5.41 0.26 8.06 (6.30) 63.78
54.68 2.43 0.43 0.36 (1.55) 56.35
72.42 72.42
98.77 63.78 34.99
62.18 62.18
90.16 56.35 33.81
3.86 4.83 5.06 13.75
4.48 7.21 (5.41) 2.97 9.25
2.56 2.26 2.61 7.43
1.98 3.45 (2.43) (0.32) 2.68
8.00% 8.00% 8.00% 8.00%
9.00%
8.75%
Note The estimates of future salary increases considered in the actuarial valuation take account of inflation, promotion and other relevant factors, such as supply and demand in the employment market. Future separation and Mortality rates are obtained from relevant data of Life Insurance Corporation of India.
Past four years data for defined benefit obligation and fair value of plan (Rs.in crores) 2003-04 Present value of defined benefit obligations at the end of the period [independent actuary] Fair value of plan assets at the end of the period Net assets / (liability) at the end of period 2004-05 2005-06 (18 Months) NA NA NA 2006-07 (6 Months) 152.34 56.35 (95.99)
NA NA NA
NA NA NA
11.
The Profit And Loss Account Includes:

(Rs.in crores) Year Ended 31st March, 2008 a. Managerial Remuneration to Directors: Salary and Other Allowances Contribution to Provident and Other Funds Gratuity Provision Commission Commission to Non Executive Director 7.05 0.32 0.12 4.00 0.12 11.61 Six Months Ended 31st March, 2007 2.71 0.13 0.05 0.90 0.06 3.85
b.
Computation of Net Profit in accordance with section 198 of the Companies Act, 1956 and commission payable: (Rs.in crores) Particulars Year Ended 31st March, 2008 211.24 79.77 1.06 61.22 142.05 156.33 11.61 521.23 0.78 0.40 153.18 154.36 366.87 29.20 4.00 3.67 0.12 Six Months Ended 31st March, 2007 71.76 16.77 0.54 40.60 57.91 68.45 3.85 201.97 0.29 1.21 68.43 69.93 132.04 10.25 0.90 1.32 0.06
Net Profit for the Year Add : Provision for taxation Current Tax Fringe Benefit Tax Deferred Tax Depreciation as per Financials Statements Directors remuneration (including commission) Less: Profit on sale of Investment (net) Provision no Longer required Depreciation under Section 350 of the Companies Act, 1956 Net Profit Commission entitlement of managerial personnel Commission paid to managerial personnel Commission entitlement to Non Executive Director Commission paid to Non Executive Director
49
(Rs.in crores) Year Ended Six Months Ended 31st March, 2008 31st March, 2007 c. Payments to Auditors: Audit Fees Tax Audit Fees Other services certificates etc. Reimbursement of expenses 0.18 0.02 0.06 * 0.26 0.09 0.01 0.07 * 0.17 (Rs.in crores) Year Ended Six Months Ended 31st March 2008, 31st March 2007 12. C.I.F Value of Imports Components, stores, fuel and spare parts Capital goods 13. Expenditure in foreign currency Subscription Traveling Professional and consultation fees Others Total 14. Value of stores and spare parts consumed (including fuel) Year Ended 31st March, 2008 Rs. In Crore Imported Indigenous Total 15. Quantitative information Year Ended Six Months Ended 31st March, 2008 31st March 2007 Units sold ( Million KWh Units ) Units purchased (Million KWh Units) 9418 7186 3582 2434 158.89 786.33 945.22 % 16.81 83.19 100.00 Six Months Ended 31st March, 2007 Rs. In Crore 86.34 261.27 347.61 % 24.84 75.16 100.00 * 0.50 0.06 1.51 2.07 0.03 0.06 0.08 0.05 0.22 0.13 203.39 30.20 744.83
16.
Deferred Tax: As at 31st March, 2008 Asset Liability Depreciation Provision for Gratuity Leave Encashment Provision for Doubtful Debts Municipal Taxes Amalgamation Expenses Provision for works contract Provision for wages Provision for ESI Claim Net Deferred Tax ( Asset ) / Liability 132.34 11.93 21.23 3.94 2.05 0.46 0.57 0.20 40.38 11.51 17.80 2.41 1.64 3.09 0.46 0.78 0.20 37.89 (Rs.in crores) As at 31st March, 2007 Asset Liability 69.40
0.77
133.11 92.73
69.40 31.51
17.
Earnings Per Share Year Ended Six Months Ended 31st March, 2008 31st March, 2007 Profit after tax (Rs. in crores) No. of Equity Shares (in crores) Basic and Diluted Earnings per Share (Rs.) 211.24 47.24 4.47 71.76 47.24 1.52
18.
The Companys primary business segment is Generation and Distribution of Electricity. Based on the guiding principles given in Accounting Standard on Segment Reporting [(AS-17) issued by the Institute of Chartered Accountants of India] , this activity falls within a single primary business segment and accordingly the disclosure requirements of AS-17 in this regard are not applicable.
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19.
Associates Enterprises Holding Company / Controlled by the Enterprises Company Controlled by the Holding Company Subsidiary Key Management Presonnel Enterprises Controlled by Key Management Presonnel / Relatives of Key Management Personnel Year Ended 31.03.08 Year Ended 31.03.08
Related Party Disclosures

(Rs. in crores) Total

Year Ended 31.03.08 31.03.08 31.03.08 31.03.08 31.03.08 Six Months Ended 31.03.07 Year Ended Six Months Ended 31.03.07 Year Ended Six Months Ended 31.03.07 Year Ended Six Months Ended 31.03.07 Year Ended Six Months Ended 31.03.07 Six Months Ended 31.03.07 2.26 1.88 0.02 1.39 0.01 0.04 9.08 0.08 153.20 0.01 10.19 10.79 110.00 110.00 81.22 * 1.42 22.24 21.67 22.22 * 11.49 3.80 1.12 1.05 0.58 0.25 155.46 0.01 11.31 11.49 24.12 21.67 10.79 110.00 110.00 22.24 1.05 9.08 0.11 0.63 6.88 0.22 0.61 6.40 1.05 10.07 23.03 * 22.26 0.57 0.04 0.01 0.02 11.24 22.89 7.45
Six Months Ended 31.03.07
A)
Volume of Transaction 82.61 0.01 1.42 0.62 3.80 * 0.25 0.08
Purchase of Materials Sale of Store / Materials / scrap Services Provided Services Received Managerial Remuneration Loan Given Loan Received Back Interest on Loan received Loans Received Loan Repaid Equity Contribution Donation Contribution to Funds (Net)
B) Balances at the end of the Period 23.27 0.65 6.40
Current Liabilities Investment in Equities Loan & Advance
Names of related parties and description of relationship: 1. Associates AEC Cements & Constructions Ltd. Torrent Energy Limited Torrent Powergrid Ltd. Torrent Pipavav Generation Ltd. The Provident Fund of The Ahmedabad Electricity Company Limited (Contribution transferred to EPFO effective from 1.1.2006) Torrent Power AEC Limited Employees Group Gratuity Scheme Torrent Power AEC Limited Officers Superannuation Scheme The Provident Fund of Torrent Power SEC Limited (Contribution transferred to EPFO effective from 1.1.2006) Torrent Power SEC Limited Employees Group Gratuity Scheme Torrent Power SEC Limited Officers Superannuation Scheme TPGL Gratuity Trust TPGL Superannuation Fund Torrent Private Ltd. Torrent Cables Ltd. Torrent Pharmaceuticals Ltd. Torrent Gujarat Biotech Ltd. Gujarat Lease Financing Ltd. Torrent Power Services Pvt. Ltd. Ahmedabad Royal Garden Hotel Pvt. Ltd. Gujarat Chlor Alkalies Industries Limited Sudhir Mehta Chairman Anita Mehta, wife Shardaben Mehta, Mother Samir Mehta, brother Varun Mehta, son Jinal Mehta, son Meena Modi, sister Nayna Shah, sister Markand Bhatt Whole-time Director Nandini Bhatt, wife Arvindbhai Bhatt, Brother Maltiben Joshi, sister Anjuben Trivedi, sister Vasudhaben Pandya, sister Munjal Bhatt, son Gunjan Bhatt, son Murli Ranganathan Whole-time Director Jayashree M. Ranganathan, Wife T.P Ranganathan, . Father Kaushalya Ranganathan Mother R.Vijay Kumar, brother Suhasini M. Ranganathan, Daughter Sujeet M. Ranganathan, son
Subsidiary
3. Enterprises controlled by the Company
4. Holding Company / Enterprises controlled by the Holding Company
5. Key Management Personnel
6. Relatives of Key Management Personnel
7. Enterprises controlled by Key Management Personnel / Relatives of Key Management Personnel
U. N. Mehta Charitable Trust D.N. Modi Charitable Trust Shardaben Mehta Charitable Trust Tsunami Tours & Travels Pvt. Ltd. Torrel Cosmetics Pvt. Ltd. Zeal Pharmachem India Pvt. Ltd. Munjal Bhatt Associates
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20. Details of political contributions (Rs.in crores) Year Ended Six Months Ended 31st March,2008 31st March, 2007 1 2 Bhartiya Janata Party Indian National Congress 2.00 2.00 -
21.
Previous years figures have been restated, wherever necessary, to conform to this years classification. Figures are rounded off to nearest lakh. Figures below Rs. 50000 are denoted by *.
Signature to Schedule 1 to 15
BALANCE SHEET ABSTRACT

BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE ADDITIONAL INFORMATION UNDER PART IV OF THE SCHEDULE VI OF THE COMPANIES ACT, 1956
Registration Details Registration Number Balance Sheet Date Public Issue Right Issue Bonus Issue Private Placement 3 N N N N 1 0 I I I I L L L L 4 3 4 2 0 0 6 0 8 8 State Code 0 4
II Capital raised during the period (Rs.in thousands)
III Position of Mobilisation and Deployment of Funds (Rs.in thousands) Total Liabilities Source of Funds Paid up Capital Reserves and Surplus Secured Loans Deferred Tax Liabilities Unsecured Loans Service Line and Security Deposits IV Performance of the Company (Amount in Rs.thousands) Total Income Total Expenditure Profit before Tax Profit after Tax Earnings per Share (in Rs.) Dividend Rate % 3 3 7 3 3 2 2 4 7 1 2 5 6 0 4 5 4 . 0 3 6 4 . 0 2 7 5 4 3 6 7 9 7 3 2 2 4 4 4 1 7 7 9 6 3 6 2 4 3 0 7 6 1 6 0 2 5 7 7 9 0 3 0 2 5 5 8 5 4 4 2 3 1 Total Assets Application of Funds Net Fixed Assets Investments Deferred Tax Assets Net Current Assets 2 0 7 2 1 8 5 5 9 9 6 9 7 5 8 9 2 0 6 1 8
1 2
1 8
1 2
0 0 1 2 V Generic names of principal Service of the Company (as per monetary terms) Item Code No. (ITC Code) Product Description N A ELECTRICITY GENERATION, DISTRIBUTION AND ELECTRICAL CONTRACTING
Sudhir Mehta Chairman Samir Mehta Director Rajiv shah Company Secretary Ahmedabad, 15th May, 2008
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MANAGEMENT DISCUSSION AND ANALYSIS

1. INDUSTRY STRUCTURE AND DEVELOPMENTS 1.1 Power Sector in India Enactment of the Electricity Act, 2003, has brought about various policy and regulatory initiatives. The Government of India (GoI) has issued the Rural Electrification Policy recently in addition to already announced National Electricity Policy and National Tariff Policy with an objective to provide electricity to all households by 2009. The Central and the State regulatory institutions in the country are seen to be getting more forward looking and have passed various regulatory orders on Annual Revenue Requirement (ARR), Tariff formulation including Multi Year Tariff, Open Access, Intrastate Availability Based Tariff, etc. The Appellate Tribunal for Electricity (ATE) has also become active and functional as a body to address grievances against the orders of Central and State Commissions. The Indian power sector appears to be progressing well on the policy initiative and regulation front. The key to Indian reform is improving efficiencies in the power distribution sector. While the Regulatory Commissions are pressing for faster reduction of Aggregate Technical and Commercial (AT&C) losses, its implementation and results are slow. As has been the experience, strong political support is needed to achieve the desired results and ensure fiscal sustenance of the sector. In addition to the above, the institutionalisation of the competitive bidding process for capacity addition in generation as well as transmission projects, with the Centre / States offering green-field ventures with key clearances in place would encourage investments, bring competitive tariffs for the benefit of consumers and see quicker execution of projects. 1.1.1 Generation This year marked the commencement of the 11th Five Year Plan. About 21,200 MW of capacity got added in the 10th Plan against a target of 41,100 MW. Focused efforts are, therefore, required to implement the targeted 80,000 MW in the 11th Five Year Plan by 2012. Encouraged by the success of the UMPP route followed by the GoI, many states are initiating the process of inviting bids for mini UMPPs (on the lines of the UMPP route). In addition to this, states are also inviting competitive tariff based bids for sourcing their short-term as well as long-term power requirements. This is an encouraging development for the sector and besides bringing transparency would also make tariff competitive. Fuels such as coal and gas would also need to be dovetailed in terms of capacity allocations and linkages so that capacity addition programs can progress smoothly. 1.1.2 Fuel for Power Generation With the sharp increase in the Crude Oil prices and the gap between the demand and supply of gas in the country, the fuel scenario has become highly volatile. Uncertainty about the supply of gas and the price of gas has become a matter of serious concern. It is expected that with the discovery of gas in Krishna-Godavari-Mahanadi Basin, the availability of gas will ease over the next 3-5 years. Till this gas becomes available at affordable price, the coal will remain the mainstay for the power generation. On the coal front also, the rapid increase in the prices in the international market has made the imported coal less attractive. The Government of India has initiated steps in promoting coal based generation at pit head by identifying and offering Captive Coal Blocks to the power sector. While this has received an overwhelming response, there is a lack of clear policy and speed in Coal Block allocation which needs to be set right. The
private players in the sector have also shown great interest for acquiring coal mines both in India and abroad to securitise the fuel supply over a long period. With the acquisitions of such interest, the availability of coal may improve to some extent. However, the sector has to recognize that the days of cheap fuel will not return. 1.1.3 Transmission Development of select transmission projects through private sector participation has been initiated. Fourteen transmission projects have been identified for development through tariff based competitive bidding. Power Grid Corporation of India Limited has also been asked by the GoI to study and plan transmission lines for evacuation of power from the proposed power projects to the beneficiary states. This is yet another initiative which needs to be dovetailed with the capacity addition program of generation in diverse geographical locations to the load-centers in other parts of the country. 1.1.4 Distribution and State Electricity Boards Efficiency improvement in the power distribution sector is fundamental to power reforms. The GoI's initiative of Accelerated Power Development & Reform Programme as a vehicle to drive reforms in the distribution sector, has not yielded much needed impetus to discipline and improve consumer services. This is now being reviewed in order to link performance improvement incentives with investments, fiscal discipline and improved services. Similarly, some states have taken the initiative of performance based franchise model for management of areas burdened with dilapidated networks and extensive AT & C losses. In the meanwhile, successful models like the privatisation in Bhiwandi distribution at Maharashtra need to be replicated across more states, if sustainable and impactful change needs to be achieved. 1.1.5 Renewable Energy There has been an increased focus on renewable energy. Many utilities as well as private developers are going ahead with plans to develop wind farms, bio fuel based projects and solar projects. For renewable energy projects to be viable, Government/Regulatory support would need to continue. Similarly, the Government could enjoin land allocations to encourage large scale development of wind farms and solar farms. 2. OUTLOOK Given the growing demand-supply gap, the Indian Power Sector continues to be fundamentally attractive. The additional capacity required to be built is huge. In this context, we believe that the Generation sector would be of great interest to investors. A lot will depend however upon the Central and State Governments' resolve to address issues concerning Distribution sector reforms, expeditious clearances (land and environment in particular) and allocation/ linkage of fuel. On the infrastructure side, with imported coal expected to bridge the demand supply gap, adequate port capacity build-up will also need to be in place. One more area needing immediate attention is creating necessary infrastructure and addressing the issue of trained manpower necessary to implement large sized projects. Given India's requirement of capacity to be built up in the next 10-15 years, it is important that the country recognizes to balance Carbon and Non-carbon based Generation. Both Nuclear and Hydro Power have the potential to fulfill this need; however, this would require the Government's support on policy, rehabilitation and resettlement (R&R) and environmental issues. Renewables on the other hand can provide impetus to distributed generation, thereby obviating the need to invest heavily into transmission and distribution networks.
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3.
OPPORTUNITIES AND THREATS On the lines of the process followed for the 4000 MW UMPPs, the GoI has proposed that the states identify opportunities for development of 1000+ MW power projects, under competitive tariff based bidding. This would bring tremendous investment opportunities to existing power sector players. The GoI has also been encouraging the concept of Merchant Power Plant to meet the peak demand in the country. This would also provide support to power trading markets. Policy guidelines in this respect are under finalisation and need expeditious conclusion. The current pace of reform in the distribution and fuel sector continues to be a concern and will be critical to attract large investments in generation capacity. Integrated planning of railways, mines, ports, etc. and reforms to facilitate acquisition of land for power projects are other areas that need GoI attention.
4.
REVIEW OF THE COMPANY'S BUSINESS 4.1 Profile The Company is primarily engaged in the business of generation, transmission and distribution of electricity with operations in the states of Gujarat and Maharashtra. The Ahmedabad and Surat Licence Area operations in Gujarat contributed about 82.21% of the power business revenues and Bhiwandi Franchise in Maharashtra contributed about 17.79%. 4.2 Sales The sales were higher at 9418.41 million units (MUs) as against 7199.72 MUs during the previous year. Sales to various consumers of the Company during the year compared to the previous year are as under: 2007-08 (12 months) 1893.72 1140.26 4095.19 2077.85 211.39 9418.41 (in MUs) 2006-07 (12 months) 1701.79 974.48 2815.67 1560.49 147.29 7199.72
Category Residential Commercial Industrial LTP / LTMD HT Others Total 4.3 Generation
Ahmedbad Sabarmati (SBI) Power Station of 400 MW generated 3425 MUs as against 3257 MUs during previous year. Vatva Station of 100 MW generated 554 MUs as against 598 MUs during previous year. The generation at gas based plant at Vatva was largely affected by poor availability of gas. 4.4 Transmission and Distribution The Company is constantly upgrading and augmenting its network to achieve the multi pronged objectives viz. to meet the demand of its consumers, to reduce the T&D losses and to improve reliability of the network to serve its consumers better. In this regard, the Company has enhanced its network by capacity creation at receiving stations, distribution sub-stations and laying of HT & LT network. The highlights of the system network upgradation for Ahmedabad, Gandhinagar and Surat license area are as under:
Enhancement of power transformation capacity by about 371 MVA by commissioning of two 220 kV sub-stations at Surat and one 33 kV sub-station at Ahmedabad taking the total power transformation capacity including intermediate power transformation capacity to about 4515 MVA. Enhancement of distribution transformation capacity by about 113 MVA by addition of 321 new distribution transformers and replacement of existing transformers, taking the total distribution transformation capacity to about 2959 MVA. The efforts of the Company in strengthening and augmenting the system network have helped in reducing the average number of interruptions per consumer to 12.24 for the year as compared to 8 interruptions during the 6 months of 2006-07. Similarly, the average consumer hours lost during the year were 11.08 as compared to 6.32 during the 6 months of 2006-07. The Company has made substantial investment for strengthening and augmenting the existing network in Bhiwandi area to reduce the T&D losses and to cater to the consumer demand with improved quality of supply. During the year under report, the Company has added 51 distribution transformers, replaced 889 transformers and revamped 2200 distribution transformer centers in Bhiwandi area. Further, the Company added about 31 ckms. of overhead and 65 ckms. of underground network of 22 kV to augment its distribution capacity and relieve the overloaded existing feeders in Bhiwandi area. 5. COMPANY'S GROWTH PLANS IN THE POWER SECTOR 5.1 1147.5 MW SUGEN Power Project The Company will commission its most ambitious 1147.5 MW gas based power project at SUGEN near Surat by end of FY 2008-09. 5.2 New Projects The Company has a long-term strategic growth plan, in order to enable it to capitalise on opportunities. The Company is currently pursuing development of several projects to achieve growth. These are: SUGEN Expansion The Company is planning to increase its project capacity by additional 3000 MW. SUGEN II and SUGEN III both will add 1500 MW in each phase at SUGEN site. Land adjacent to SUGEN project has been identified and acquisition process for the same has commenced. Dahej The Company has been named as co-developer for Dahej SEZ near Bharuch in Gujarat state and is authorised to put up generation project upto 1500 MW. The Company is planning to set up approximately 400 MW gas based combined cycle power plant in the first phase through a new Special Purpose Vehicle, Torrent Energy Limited. The Contour survey & Geo-Technical investigation for the project has been completed. Further, bids have been invited under international competitive bidding process for awarding EPC contract. Pipavav The Company is planning to set up a 2000+ MW coal based thermal power project in Pipavav in Amreli District of Gujarat. Torrent Pipavav Generation Limited has been incorporated as a subsidiary of the Company for development of the project. Land for the project is under possession of Gujarat Power Corporation Limited which will be transferred to the Company. Fuel will be supplied from Baitarni Coal Block in Talchar Coal Field, Orissa.
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Morga The Company's bid to supply power to GMDC on the basis of coal to be supplied by GMDC from Morga-II Coal Block, Chhattisgarh has been accepted. The Company is planning to set up 1,000+ MW coal based thermal power project in Chhattisgarh for this purpose. A Memorandum of Understanding (MOU) has been signed with the Chhattisgarh government and Chhattisgarh State Electricity Board for development of the project. 6. CLEAN DEVELOPMENT MECHANISM The Company made an application for registration of its SUGUN project to UNFCCC. After considerable efforts spread over more than three years, the project has been approved as eligible for Clean Development Mechanism (CDM) benefits on 11th August, 2007. Methodology proposed by Torrent Power Limited got approved and has been accepted for application to similar projects anywhere in the world. Consequently, SUGEN plant will be eligible to earn Carbon Credits (CER's) on the commencement of generation. 7. FINANCING During the year, the Company raised long-term loans of Rs. 1100 Crores from various financial institutions and banks. The term loans including working capital loans and Accelerated Power Development and Reform Programme loans outstanding as at 31st March, 2008 were Rs. 2537 Crores (Previous Period Rs. 1627 Crores). During the year, an amount of Rs. 499 Crores (Previous Period Rs. 817 Crores) has been drawn for the 1147.5 MW SUGEN CCPP and Rs. 680 Crores for ongoing CAPEX (Previous Period Nil). The Company has repaid an amount of Rs. 57.96 Crores (Previous Period Rs. 27.13 Crores) towards term loans including loan under APDRP . The Company's long-term debt is rated AA- by credit rating agency, while for working capital loans; the Company is rated P1+ by credit rating agency suggesting the highest rating. 8. RISK AND CONCERNS The Company has systems in place for identifying potential risks and taking measures to mitigate those risks. The Risk Management Policy of the Company addresses all potential risks including Fuel Risks (availability and pricing), Regulatory Risks (Tariff Regulation, Environment Regulation, etc.), Consumer Risks (Revenue Realisation, Transmission Risks), Asset Risks (Natural Calamity, etc.), Human Resource Risks and IT Risks. The power generation plants use coal and gas as fuel. While domestic coal production and price has remained stable during the period under consideration, the increased usage of coal and capacity addition would increase the gap between demand and supply and in turn necessitate use of imported coal. High dependence on domestic coal could, therefore, expose the Company to potential availability risks. In respect of imported coal, the price instability due to increased demand in the international market, increase in crude price and transportation constraints alongwith foreign exchange variation would expose the Company to the potential availability and price risk. The Company has taken necessary steps to maintain continuous supply of fuel and in turn generation. The Companys business growth is mainly driven by the industrial and commercial activities which depend on economic growth. The Company's Ahmedabad, Gandhinagar and Surat distribution areas have witnessed high growth on account of increase in commercial and industrial activities in last few years and it is expected that growth in demand for energy would continue to rise in line with economic growth. However, any reduction in economic growth would expose the Company to potential business risk.
The Company procures substantial quantity of power for supply from GUVNL. The demand supply gap in Gujarat may impact the availability of power from GUVNL. The upcoming 1147.5 MW SUGEN project shall help in bridging the demand supply gap in existing distribution businesses, leaving potential of sale of power outside Gujarat. The Electricity Act, 2003 provides for competition in supply of electricity through second licensee in the Company's existing license area of operation. However, the established distribution network and track record of supplying reliable and quality power would give edge to the Company to meet with such competition. The GERC has notified regulations, prescribing various norms and standards of performance for the licensees and provided for penalties for deviating from the prescribed standards of performance. The Company has been able to improve its performance vis--vis GERC's prescribed standards of performance. The GERC has notified Multi Year Tariff (MYT) regulations requiring determination of tariff under the new regime. However, the Company has equipped itself to meet with the regulatory requirements. All the significant parameters concerning the commissioning of SUGEN project have been already tied up. The capacity utilisation during the commercial operations of the project will require uninterrupted supply of fuel, i.e. Natural Gas (NG) / Regasified LNG (RLNG). At present in the world and in the country, there is a mismatch of demand and supply of NG/RLNG, resulting into higher cost of fuel. However, the project enjoys partial certainty of availability of fuel at reasonable price and for the balance portion, if uninterrupted supplies are not available, to that extent the commercial operations will suffer from the utilisation of full capacity. At the same time, possibility of purchase of fuel on spot basis exists which may partially mitigate the risk. The power generated from the plant is proposed to be used mainly in the Company's distribution areas. The risk of unutilised capacity can be mitigated by sale of surplus power at competitive rates on spot basis. The activation of Indian Energy Exchange will help this process. The Company has been able to reduce the T&D losses in its recently acquired distribution franchise for Bhiwandi. However, it is required to make further investments in network for reducing technical losses and to cater to the additional demand. The further reduction of commercial losses necessitates improvements in metering and billing processes. The Company can be subjected to the financial risk, if its efforts do not yield the desired results. The operations of the Company are subject to certain risks generally associated with power generation, transmission and distribution businesses, and the related transportation, receipt and storage of fuels and environmental issues. 9. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACIES The Company has appointed a reputed firm of Chartered Accountants to carry out Assurance audit. The audit process includes review and evaluation of effectiveness of the existing processes, controls and compliance. It also ensures adherence to policies and systems and mitigation of the operational risks perceived for each area under audit. Significant observations including recommendations for improvement of the business processes were reported to the Audit Committee of the Board which reviewed the audit reports and the status of implementation of the agreed action plan. 10. FINANCIAL PERFORMANCE OF THE COMPANY During the current year, the total income of Rs. 3722.00 Crores was higher by 28.67% as compared to Rs. 1446.35 Crores in the previous period, as detailed below:
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Particulars Sales Cost of Electrical energy purchased Cost of Fuel Contribution Operating Profit (PBDIT) - including Other Income Interest & Finance Charges Depreciation Profit before Tax Provision for Taxes & Short Provision for earlier years Net Profit after Tax & Short Provision for earlier years Equity EPS (in Rupees) Equity Dividend (%) ROCE % Debt Equity Ratio 10.1 Revenue
Amount (Rs. crores) 3618.32 1932.47 741.48 944.37 584.29 59.78 147.94 376.57 165.33 211.24 4.47 12% 7.43% 0.88
% of net Sales 100.00 53.41 20.49 26.10 16.15 1.65 4.09 10.41 4.57 5.84 -
The revenue of the Company comprises primarily sale of electricity, which is sourced from its own generation as well as purchase from Gujarat Urja Vikas Nigam Limited (GUVNL) and Maharashtra State Electricity Distribution Company Limited (MSEDCL). The Company also derives revenue from related services namely hire of meters, street light maintenance contracts, contract / consultancy services, etc. and interest / dividend earned on investments. 10.1.1 Sale of Electricity The Company witnessed demand growth from all major categories of the consumers. The charges for electricity are based on tariff and FPPPA approved by the Gujarat Electricity Regulatory Commission (GERC) and Maharashtra Electricity Regulatory Commission (MERC). Other major factors contributing to the sales were inclusion of Bhiwandi Circle and reduction in T&D losses. The Company also exports power to GUVNL in case power generated is more than system demand. The average revenue realisation per unit sold during the financial year was Rs. 3.81 as compared to Rs. 3.79 of the previous year. 10.1.2 Other Income Other Income of Rs. 88.21 Crores for the period under review comprises revenues from related business activities like hire of meters - Rs. 34.01 Crores, Street Lighting Maintenance contracts Rs. 4.51 Crores besides other recurring items like interest and dividend on investments and deposits, sale of scrap, bad debts recovery, etc. 10.2. Expenditure The expenditure incurred is on purchase of power, fuels used for power generation and other generation, distribution, administration & other expenses including employees' costs, insurance, etc.
10.2.1 Power Purchase The total power purchase cost accounts for about 53% (Previous Period 52%) of sales and 58% (Previous Period 55%) of the total expenditure. For power supplies in Ahmedabad and Gandhinagar, demand of power is met through own generation capacity of 500 MW and purchase of power from GUVNL. The higher efficiency maintained on generation front has provided a cushion towards power purchase from GUVNL. For the supply of power to Surat, the entire requirement is sourced from GUVNL. The rates for power purchase from GUVNL are approved by GERC. In case of Bhiwandi, the Company is required to pay for power purchase cost as per the Distribution Franchise Agreement to MSEDCL. 10.2.2 Fuel The other primary fuel used in power generation is coal and natural gas. Expenditure on fuel constituted 22% (Previous Period 24%) of the total expenditure. The usage of fuel is also linked with the higher generation achieved by the Company. The coal used by the Company is procured both indigenously as well as imported. The Company makes conscious efforts to monitor the availability as well as optimise the sources of different fuels. 10.2.3 Operating Costs The other Operating Costs (generation, distribution, administration and other expenses) consist primarily of repair and maintenance of buildings, plant and machinery, employees' remuneration and benefit expenses, insurance, etc. These expenses represent 13.86% (Previous Period 15.42%) of the total expenditure. 10.2.4 Depreciation The depreciation charged to the profit and loss account during the year is Rs. 156 Crores (Previous Period Rs. 68 Crores). A proportionate amount of Service Line Contribution and APDRP Grant attributable to depreciation on assets created against such Service Line Contribution and APDRP Grant is adjusted against depreciation for the period. The net depreciation after such transfer from Service Line Contribution and APDRP Grant is Rs. 148 Crores (Previous Period Rs. 65 Crores). Depreciation on assets relating to 1147.5 MW SUGEN CCPP is treated as pre-operative expenses pending capitalisation. 10.2.5 Interest and Finance Charges The interest charges consist primarily of interest expense on Term Loans, Working Capital Loan and interest on security deposits placed with us by consumers of electricity. Borrowing costs amounting to Rs. 223 Crores (Previous Period Rs. 52 Crores) are capitalised during the year. 10.2.6 Taxation The Company has provided for Rs. 79.77 Crores (Previous Period Rs. 16.77 Crores) in respect of current taxes, Rs. 1.06 Crores (Previous Period Rs. 0.54 Crore) in respect of Fringe Benefit Tax and Rs. 61.22 Crores (Previous Period Rs. 40.60 Crores) towards Deferred Tax Liability. 10.3 Net Profit after Tax The net margin of the Company is 5.84% (Previous Period 5.17%) of the net sales for the year under review.
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10.4 Appropriation to Reserves & Surplus Out of the profits for the year, an amount of Rs. 140 Crores (Previous Period Rs. 5.07 Crores) has been transferred to the General Reserve. 10.5 Net Worth The net worth of the Company at the end of the financial year was Rs. 2890 Crores (Previous Period Rs. 2705 Crores). 10.6 Resource Allocation a) Fixed Assets The gross fixed assets as on 31st March, 2008 were Rs. 3689 Crores as compared to Rs. 2985 Crores in the previous year. b) Working Capital The net current assets as on 31st March, 2008 were Rs. (207) Crores as compared to Rs. (330) Crores in the previous year. 11. HUMAN RESOURCE MANAGEMENT Continuous efforts are made to redefine the business processes leading to increase in productivity and overall improvement in the quality of work. Several training and development initiatives including training and upgradation of technical skills, consumer orientation, self and organisational development, team building, managerial effectiveness, series of in-house presentations, etc. have been a constant feature during the year under review. 12. SUBSIDIARIES 12.1 Torrent Power Grid Limited Torrent Power Grid Limited, a public-private joint venture in power transmission in India partnered by the Company with Power Grid Corporation of India Limited, has commenced implementation of the project. 12.2 Torrent Pipavav Generation Limited The Company is planning to set up 2000+ MW coal based thermal power project in Pipavav. Torrent Pipavav Generation Limited has been incorporated as a subsidiary company on 25th September, 2007, for development of the project. 13. SOCIAL CAPITAL As a part of its commitment to the development of the society, the Torrent Group is undertaking many projects which seek to touch thousands of lives in Ahmedabad, Surat and Bhiwandi under the programme called Sparsh which was launched in January, 2005. Sparsh strives to make a positive difference in the quality of life in the areas of health, education, public amenities and community development, involving the individual and collective will and effort of about 10000 members of the Torrent Parivar. Some of the activities undertaken in Ahmedabad, Surat and Bhiwandi include tree plantation, health checkup camp, cleaning of water tanks, refurbishing of schools. The Company has been a significant contributor to the social capital of the cities and the state of power supply. A value added statement, particularly as regards society, is summarised below which details the contribution made by the Company towards the state exchequer, employment generation, creditors and lenders, and investors.
Value Added Statement

(Rs. in Crores)
Particulars Gross Income Less: Cost of fuel & Electrical Energy Purchased Distribution, Administration & Other Expenses Add: Net Income of Service and Fly-Ash Divisions Total Value Added Applied to Meet Government Duty Other Rates & Taxes Employee Costs Income Taxes (including short provisions of earlier years) Provision for Deferred Taxation Dividend and Tax thereon Interest Payments Retained in Business Total
Year ended on 31st March, 2008 4139.84 2673.95 230.72 7.19 1242.36 425.03 3.56 229.48 104.11 61.22 66.33 59.78 292.85 1242.36
As seen from the above, your Company has added a value of Rs. 1242.36 Crores to the social capital during the year 2007-08. 14. CAVEAT Statements in the Management Discussion and Analysis, describing the Company's objectives, projections and estimates, are forward-looking statements and progressive within the meaning of applicable security laws and regulations. Actual results may vary from those expressed or implied, depending upon economic conditions, Government Policies and other incidental/related factors.
For and On behalf of the Board of Directors Ahmedabad 15th May, 2008 Sudhir Mehta Chairman
65
Consolidated Financial Statement 2007-08
Auditors Report on Consolidated Financial Statements

To the Shareholders of TORRENT POWER LIMITED We have audited the attached Consolidated Balance Sheet of Torrent Power Limited (the Company) and its subsidiaries (collectively referred to as the Group), as at 31st March 2008 and also the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management and have been prepared by the management on the basis of separate financial statements and other financial information regarding components. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. We report that the Consolidated Financial Statements have been prepared by the Companys management in accordance with the requirements of the Accounting Standard (AS) 21 Consolidated Financial Statements and Accounting Standard (AS) 23 Accounting for Investments in Associates in the Consolidated Financial Statements, issued by the Institute of Chartered Accountants of India. Based on our audit and on consideration of separate audit reports on individual audited financial statements and on the other financial information of the components, and to the best of the information and according to the explanations given to us, we are of the opinion that the attached Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India: (a) in the case of the Consolidated Balance Sheet, of the consolidated state of affairs of the Group as at 31st March, 2008; (b) in the case of the Consolidated Profit and Loss Account, of the consolidated profit of the Group for the year ended on that date; and (c) in the case of the Consolidated Cash Flow Statement, of the consolidated cash flows of the Group for the year ended on that date.
For C. C. Chokshi & Co. Chartered Accountants Gaurav J. Shah Partner Membership No.35701
Ahmedabad 15th May, 2008
67
CONSOLIDATED BALANCE SHEET

AS AT 31ST MARCH, 2008
(Rs. in crores) Schedule As at 31st March, 2008 As at 31st March, 2007
SOURCES OF FUNDS Shareholders Funds Share Capital Reserves and Surplus Minority Interest in Equity Loan Funds Secured Loans Unsecured Loans Other Fund Service Line and Security Deposits from Consumers Deferred Tax Liability (net) APPLICATION OF FUNDS Fixed Assets Gross Block Less: Depreciation Net Block Capital Work-in-Progress
1 2
472.45 2,417.31 2,889.76 7.82 2,476.00 61.25 2,537.25 334.68 92.73 5,862.24
472.45 2,232.93 2,705.38 0.01 1,464.23 162.91 1,627.14 300.80 31.51 4,664.84
3 4
3,689.30 517.37 3,171.93 2,851.33 6,023.26 39.62 0.45 165.80 412.80 194.16 466.53 1,239.74
2,985.67 364.22 2,621.45 2,247.59 4,869.04 125.29 2.00 152.80 342.76 41.33 355.88 894.77 801.93 422.33 1,224.26 (329.49) 4,664.84
Investments Current Assets, Loans and Advances Interest accrued on Investments and Deposits Inventories Sundry Debtors Cash and Bank Balances Loans and Advances Less: Current Liabilities and Provisions Current Liabilities Provisions Net Current Assets
6 7
8 835.38 605.00 1,440.38 (200.64) 5,862.24
Significant Accounting Policies Notes on Accounts As per our report of even date For C. C. Chokshi & Co. Chartered Accountants Gaurav J. Shah Partner Ahmedabad 15th May, 2008
14 15 Sudhir Mehta Chairman Samir Mehta Director Rajiv Shah Company Secretary Ahmedabad 15th May, 2008
CONSOLIDATED PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED 31st MARCH, 2008
(Rs. in crores) Schedule Year ended 31st March, 2008 Six Months ended 31st March, 2007
INCOME Sale of Electrical Energy Net Income of Services Division Net Income of Fly-Ash Division Insurance Claim Receipt Other Income
9 10 11
3,618.32 7.28 (0.09) 8.28 88.21 3,722.00 1,932.47 1,205.24 59.78 156.33 8.39 147.94 3,345.43 376.57 79.77 1.06 61.22 234.52 23.28 211.24 127.87 339.11 140.00 56.69 9.64 206.33 132.78 339.11 4.47
1,388.07 3.97 (0.25) 7.83 46.73 1,446.35 718.77 513.24 19.43 68.45 3.23 65.22 1,316.66 129.69 16.77 0.54 40.60 71.78 0.02 71.76 82.73 154.49 5.07 18.90 2.65 26.62 127.87 154.49 1.52
EXPENDITURE Electrical Energy Purchased Generation, Distribution, Administration and Other Expenses 12 Interest and Finance Charges 13 Depreciation Less: Transfer from Service line contribution & APDRP Grant
Profit Before Tax Provision for Current Tax {(Including Rs.0.05 crore for Wealth tax) ( 31st March, 2007 Rs. 0.05 crore)} Fringe Benefit Tax Provision for Deferred Tax Profit After Tax Before Exceptional Items Short Provision of Taxation for earlier years Net Profit for the year Balance brought forward from Previous period Amount available for Appropriations APPROPRIATIONS General Reserve Interim Dividend Proposed Dividend Corporate Dividend Tax Balance Carried to Balance Sheet Basic and Diluted Earnings per Share of face value of Rs. 10 each (in Rupees) (Refer Note13, Schedule 15) Significant Accounting Policies Notes on Accounts As per our report of even date For C. C. Chokshi & Co. Chartered Accountants Gaurav J. Shah Partner Ahmedabad, 15th May, 2008
14 15 Sudhir Mehta Chairman Samir Mehta Director Rajiv Shah Company Secretary Ahmedabad, 15th May, 2008
69
CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31ST MARCH, 2008
(Rs. in crores) Year ended 31st March, 2008 Six Months ended 31st March, 2007 129.69 65.22 (2.91) 18.91 0.01 5.73 (6.60) 210.05 10.92 (58.85) 269.20 7.84 (0.37) 438.79 (29.76) 409.03 (1,436.05) 1.00 17.86 7.04 (1,410.15) 0.01 931.15 100.02 (0.01) (26.24) (0.89) 26.32 (85.75) (39.39) 905.22 (95.90) 180.39 84.49
Cash Flow from Operating Activities Net Profit before tax Adjustments for : Depreciation Excess provision written back Interest expenses Profit or Loss on Sale / redemption of investment(net) Loss on sale of fixed assets Dividend / Interest Operating Profit before Working Capital Changes Adjustments for : Trade and their Receivables Inventories Current Liabilities and Provisions Service line and Security Deposits Interest on Security Deposits Cash Generated from Operations Taxes Paid Net Cash Flow from Operating Activities Cash Flow from Investing Activities Purchase of fixed assets Sale of fixed assets Purchase of investments Sale of investments Dividend and interest received from investments Net Cash used in Investing Activities Cash Flow from Financing Activities Share Capital Long Term borrowings Unsecured loan Repayments of fixed deposits Repayments of borrowings Repayments of APDRP Loan Service line contribution Dividend paid Interest Paid Net Cash used in Financing Activities Net increase / ( decrease ) in Cash and Cash Equivalents Cash and Cash Equivalents as at 01-04-2007 Cash and Cash Equivalents as at 31-03-2008 Note: Cash and Cash Equivalents as at end of the year: Cash and Bank Balances Current Investments (Investments in Mutual Funds)
376.57 147.94 (0.40) 59.78 10.07 (7.29) 586.67 (91.30) (13.00) 31.47 33.88 (13.26) 534.46 (88.63) 445.83 (1,321.62) 2.16 (0.02) 62.26 8.86 (1,248.36) 7.80 1,178.95 150.00 (0.03) (417.20) (1.64) 54.19 (0.01) (33.79) 938.27 135.74 84.49 220.23
194.16 26.07 220.23
41.33 43.16 84.49 Sudhir Mehta Chairman Samir Mehta Director Rajiv Shah Company Secretary
As per our report of even date For C. C. Chokshi & Co. Chartered Accountants Gaurav J. Shah Partner Ahmedabad, 15th May, 2008
Ahmedabad, 15th May, 2008
SCHEDULES
FORMING PART OF THE BALANCE SHEET
SCHEDULE '1' : SHARE CAPITAL

As at 31st March, 2008 Authorised: 2,00,00,00,000 Equity Shares of Rs.10/- each 2,000.00 2,000.00
(Rs. in crores) As at 31st March, 2007
2,000.00 2,000.00
Issued, Subscribed and Paid up: 472,448,308 Equity Shares of Rs.10/- each 472.45 472.45 472.45 472.45
1 2
248,940,991 equity shares (258,240,991 equity shares as on 31st March 2007) of Rs 10/- each fully paid up are held by holding company i.e. Torrent Private Limited . 472,435,808 equity shares(472,435,808 equity shares as on 31st March, 2007) of Rs. 10/- each fully paid up were issued pursuant to the Scheme of Amalgmation between the erstwhile Torrent Power AEC Ltd, Torrent Power SEC Ltd and Torrent Power Generation Limited.
(Rs. in crores) As at 31st March, 2008 As at 31st March 2007
SCHEDULE 2 : RESERVES AND SURPLUS
Capital Reserves Service Line Contributions As per last Balance Sheet Contributions during the year Less: Transfer to Profit and Loss Account Grant in Aid under Accelerated Power Development and Reform Programme As per last Balance Sheet Less: Transfer to Profit and Loss Account Statutory Reserves Contingency Reserve As per last Balance Sheet Less : Loss on sale of Contingency Reserve Investments Tariff and Dividend Control Reserve As per last Balance Sheet Other Reserves General Reserve As per last Balance Sheet Add: Transfer from Profit and Loss Account Balance in Profit and Loss Account
98.80 54.19 152.99 6.28 146.71
74.65 26.32 100.97 2.17 98.80
40.24 2.11 38.13
41.30 1.06 40.24
79.43 6.33 73.10 11.59
79.43 79.43 11.59
1,875.00 140.00 2,015.00 132.78 2,417.31
1,869.93 5.07 1,875.00 127.87 2,232.93
71
SCHEDULE '3' : SECURED LOANS

(Rs. in crores)
As at 31st March, 2008 Rupee Term Loans : From Financial Institutions From Banks From Other Working Capital Loans: Cash Credit Arrangements with Bank Of the above: 1. 3.36 2,476.00 1,277.88 1,131.51 63.25
As at 31st March, 2007 766.75 683.28 -
14.20 1,464.23
2.
3.
4.
5 6
Amount of Rs.25.00 crores (31st March, 2007 Rs. 63.20 crores) from a financial institution is secured by first charge by way of hypothecation of all movables (except book debts), and by way of equitable mortgage of all immovable properties, present and future, situated at Ahmedabad and Gandhinagar, both subject to prior charges created and/or to be created in favour of bankers for securing the borrowing for working capital requirements in the ordinary course of business. Amount of Rs.64.29 crores (31st March, 2007 Rs. 78.57 crores) from a financial institution is secured by first charge by way of hypothecation of all movables (except book debts), and by way of equitable mortgage of all immovable properties, present and future, situated at Surat, both subject to prior charges created and/or to be created in favour of bankers for securing the borrowing for working capital requirements in the ordinary course of business. Amount of Rs.1188.59 crores (31st March, 2007 Rs. 624.98 crores) and Rs.1131.51 crores (31st March, 2007 Rs 683.28 crores) from financial institutions and Banks respectively, are secured by first charge by way of hypothecation of all movables (except book debts),and by way of equitable mortgage of all immovable properties, present and future, both subject to prior charges created and/or to be created in favour of bankers for securing the borrowing for working capital requirements in the ordinary course of business. However, the creation of equitable mortgage in respect of loans is pending. Amount of Rs.63.25 crores (31st March, 2007 nil) from other is secured by second charge by way of equitable mortgage of all immovable properties, present and future, situated at village Akhakhol, Surat relating to 1147.5 MW Project, both subject to prior charges created and/or to be created in favour of bankers for securing the borrowing for working capital requirements in the ordinary course of business. Working Capital facilities from Banks are secured by charge on current assets of the company. Amount of Rs 241.99 crores (31st March, 2007 Rs.166.68 crores) is repayable within one year.
(Rs. in crores)
SCHEDULE 4 UNSECURED LOANS As at 31st March, 2008 Term Loan from Government of India under Accelerated Power Development and Reform Programme From Bank 61.25 61.25
As at 31st March, 2007 62.89 100.02 162.91
Of the above amount of Rs.1.64 crores (31st March 2007 Rs.101.83 crores) is repayable within one year.
SCHEDULE '5' : FIXED ASSETS

(Rs. in crores)
Particulars
As at 1-Apr-07 (See Note 1 below)
GROSS BLOCK
Additions during the year Deductions during the year
DEPRECIATION / AMORTISATION
NET BLOCK
Particulars Land (a) Freehold (b) Leasehold Buildings Railway siding Plant and Machinery (a) Steam Station (b) Others including Switchgears and Transformers Transmission and Distribution systems (a) Overhead (b) Underground Electrical Fittings and Apparatus Furniture, Fixture and Office Equipments Vehicles Intangible Assets Software Total Previous period Capital Work-in-Progress
As at 31-Mar-08
Upto 31-Mar-07
Addition Deductions During the year during the year
Upto 31-Mar-08
As at 31-Mar-08
As at 31-Mar-07
31.67 34.20 67.89 0.52
35.93 7.07 29.18 -
0.10 *
67.60 41.27 96.97 0.52
0.55 3.26 0.05
0.26 1.46 0.02
0.01 *
0.81 4.71 0.07
67.60 40.46 92.26 0.45
31.67 33.65 64.63 0.47
577.53
5.15
0.46
582.22
82.38
30.49
0.07
112.80
469.42
495.15
1,069.66
278.41
11.38
1,336.69
144.34
58.48
2.71
200.11
1,136.58
925.32
143.40 1,013.10
125.63 212.55
1.08 2.00
267.95 1,223.65
25.48 97.68
8.69 51.63
0.19 0.25
33.98 149.06
233.97 1,074.59
117.92 915.42
15.38
9.35
0.26
24.47
2.32
0.87
0.07
3.12
21.35
13.06
23.60 7.55
12.21 2.91
0.03 0.44
35.78 10.02
5.08 2.50
3.21 0.94
0.01 0.21
8.28 3.23
27.50 6.79
18.52 5.05
1.17 2,985.67 2,799.97
0.99 719.38 193.97
15.75 8.27
2.16 3,689.30 2,985.67
0.58 364.22 297.17
0.62 156.67 68.58
3.52 1.53
1.20 517.37 364.22
0.96 3,171.93 2,621.45 2,851.33 6,023.26
0.59 2,621.45 2,247.59 4,869.04
Notes: 1 Additions during the year and Capital Work -in-Progress includes borrowing cost of Rs.223.34 crores (31st March 2007 Rs. 52.13 crores) , which are directly attributable to purchase/construction of qualifying assets in accordance with Accounting Standard - 16 Borrowing Costs issued by the Institute of Chartered Accountants of India Capital Work -in-Progress includes Preoperative Expenditure of Rs.48.80 crores (31st March 2007 Rs. 32.53 crores)(see note -6 of Schedule 15). The Company has leased a portion of its land to AEC Cements & Constructions Limited. Land includes freehold land at Chandkheda amounting to Rs.0.04 crore (31st March, 2007 Rs. 0.04 crore) and leasehold land at Kathwada, Prahladnagar, Ghatlodia-Chandlodia, Gulbai Tekra, Vastral, Bodakdev, Sarangpur, Cantonement and Pirana amounting to Rs.14.13 crores (31st March, 2007 Rs. 7.20 crores) for which documentations are in progress.
3 4
73
SCHEDULE 6 : INVESTMENTS (AT COST)

No of No of Unit Unit 31-03-2008 31-03-2007 A. LONG TERM INVESTMENTS Contingency Reserve Investments (Quoted): 5.30% Nuclear Power Corporation Limited Tax Free Bonds -2007
6.20% Andhra Pradesh State Development Loan -2015
Face Value
As at 31st March 2008
(Rs. in crores) As at 31st March 2007
6.20% Tamilnadu State Development Loan - 2015
11.70% ICICI Bond - 2011 9.00% Power Finance Corporation - 2009 9.75% ICICI Bond - 2007 7.00% Power Finance Corporation - 2011 7.95% Power Finance Corporation - 2016 7.49% GOI BOND - 2017 10.47% GOI BOND - 2015 11.43% GOI BOND - 2015 11.83% GOI BOND - 2014 7.94% GOI BOND - 2021 10.25% GOI BOND - 2021 8.70% IIFCL - 2021 11.50% IFCI - 2009 12.00% IFCI - 2012 7.35% ILFS - 2008 11.50% GOI BOND - 2011 7.40% GOI BOND - 2012 6.85% GOI BOND - 2012 7.27% GOI BOND -2013 6.20% Andhra Pradesh State Loan - 2015 6.20% Karnataka State Loan - 2015 6.20% Tamilnadu State Loan - 2015 11.25% ICICI Bank Ltd. - 2016 9.75% ICICI Bank Ltd.- 2007 9.25% Power Finance Corporation - 2012 3.00% Calcutta Port Trust Debentures Other Investments: Quoted 11.40% APPFC - 2009 11.50% Haryana State Loan 11.50% Punjab State Loan 11.50% Tamilnadu State Loan 12.00% Uttar pradesh State Loan Unquoted Trade Torrent Energy Limited Equity Shares of Rs 10/- each fully paid up AEC Cements & Constructions Ltd Equity Shares of Rs.10/- each fully paid up
Less: Provision for diminution in value of investment
500
200 500 400 10 50 50
10 50
20 10 50 2000
2.00 3.50 3.50 5.00 4.00 1.00 5.00 5.00 2.50 5.00 5.00 2.00 6.00 6.00 2.00 0.20 0.08 0.25 1.50 1.65 1.15 1.50 1.50 2.50 3.00 2.40 0.01
6.61 * 0.01 0.10 1.51 1.69 3.29 0.01 13.22
2.03 3.56 3.56 6.61 4.35 1.11 4.97 4.90 2.51 6.13 6.52 2.63 6.07 7.22 2.02 * 0.01 0.20 0.10 0.27 1.51 1.69 1.17 1.53 1.53 3.29 3.34 2.63 0.01 81.47
0.07 0.01 * 0.02 0.10
0.10 0.07 0.01 * 0.02 0.20
22500 611500 611500
0.02 0.61
0.02 0.61 0.61 0.21 0.33 13.55
0.61 0.61 0.46 0.66 82.13
Other Gujarat Venture Capital Fund-1995-Contribution Total (A)
SCHEDULE 6 : INVESTMENTS (Contd)

(Rs. in crores)
No of Units 31-03-2008 No of Units 31-03-2007 Face Value As at 31st March 2008 As at 31st March 2007
B. CURRENT INVESTMENT In Units - (Unquoted) HDFC Liquid Fund Plan HDFC Liquid Fund Plan HDFC Liquid Fund Plan HDFC Cash Management Fund Prudential ICICI Institutional Liquid Plan Prudential ICICI Institutional Liquid Plan Prudential ICICI Institutional Liquid Plan Prudential ICICI Institutional Liquid Plan Templeton India Treasury Management Account DSP Merrill Lynch Liquidity Fund DSP Merrill Lynch Liquidity Fund DSP Merrill Lynch Liquidity Fund DSP Merrill Lynch Liquidity Fund Grindlay Liquidity Manager Grindlay Liquidity Manager Birla Cash Surplus Kotak Liquid Plan Total (B) {Aggregate NAV.of Investments in Mutual Funds Rs.26.07 crores (31st March, 2007 Rs 43.16 crores)} Total (A+B) Aggregate book value of quoted investments Aggregate book value of unquoted investments Total Market Value of Quoted Investments
4104196 4095001 2455718 5998269 2018680 4011736 5017796 2007118 50028 40217 50255 50026 50151 50187 30025 2003899 2461816
5.00 5.00 3.00 6.00 2.00 4.00 5.00 2.00 5.00 4.00 5.00 5.00 5.00 5.00 3.00 2.00 3.00
3.01 6.01 5.02 2.01 5.01 2.00 3.01 26.07
5.03 5.02 2.02 4.01 5.00 4.02 5.03 5.00 5.02 3.01 43.16
39.62 13.32 26.30 39.62 11.27
125.29 81.67 43.62 125.29 73.44
Current Investments purchased and sold during the year No of Unit Birla cash plus Birla cash plus DSP ML Liquidity Fund DSP ML Liquidity Fund Grindlays Liquidity Manager Plus Grindlays Liquidity Manager Plus HDFC Cash Management Fund HDFC Liquid Fund HDFC Liquid Fund Kotak Liquid Fund Kotak Liquid Fund Prudencial ICICI Liquid Plan-sp Prudencial ICICI Liquid Plan-sp Templeton Liquid Fund Templeton Liquid Fund Templeton Liquid Fund -Sp HDFC Liquid Fund Kotak Liquid (Institutional premium) ICICI Prudential Liquid Plan ICICI Prudential Liquid Plan 18,963,022 10,165,184 1,709,658 413,278 559,883 154,821 2,991,068 190,052,040 44,003,111 24,533,656 5,152,973 179,993,600 45,591,474 69,983 210,462 339,915 6,729,310 4,497,837 11,351,666 2,244,770
Rs. In Crores 19.00 14.00 171.00 46.00 56.00 17.00 3.00 233.00 67.00 30.00 8.00 180.00 52.00 7.00 27.00 34.00 8.25 5.50 12.00 4.25
75
SCHEDULE 7 : CURRENT ASSETS, LOANS AND ADVANCES

(Rs. in crores)
CURRENT ASSETS Interest Accrued On Investments and Deposits Inventories

Coal, Oil, Stores and Spares {Includes Goods in transit Rs.44.52 crores (31st March 2007 Rs. 16.96 crores)}
0.45 165.80
2.00 152.80
Sundry Debtors
Debts outstanding for a period exceeding six months Secured Considered good Unsecured Considered good Considered Doubtful 5.00 9.42 41.99 56.41 108.77 289.61 14.79 413.17 56.78 412.80 9.80 6.88 13.21 6.37 26.46 98.98 223.69 0.74 323.41 7.11 342.76 9.49
Other Debts
Secured Unsecured Considered good Considered good Considered Doubtful
Less : Provision for Doubtful Debts
Cash and Banks Balances Cash and Cheques on hand

{including Cheques on hand of Rs.9.11 crores (31st March 2007 Rs. 9.17 crores)}
Balance with scheduled bank

In Current Accounts Fixed Deposits Accounts 15.10 169.04 0.02 12.48 19.19 0.02
Balance with other Banks in Current Accounts

Nepal Grindlays Bank Ltd. Maximum balance during the year Rs.0.02 crore (31st March 2007 Rs. 0.02 crore ) The City Co-operative Bank Ltd. Maximum balance during the year Rs.0.45 crore (31st March 2007 Rs.0.52 crore) The Associate Co-operative Bank Ltd. Maximum balance during the year Rs.0.68 crore (31st March 2007 Rs. 0.64 crore) The Surat Mahila Nagrik Sahakari Bank Ltd. Maximum balance during the year Rs.0.08 crore (31st March 2007 Rs. 0.08 crore) The Surat Mercantile Co-operative Bank Ltd. Maximum balance during the year Rs.1.53 crores (31st March 2007 Rs.1.06 crores)
0.04
0.02
0.02
0.06
0.14
0.07
194.16 LOANS & ADVANCES
41.33
Unsecured (Considered Good Unless Otherwise Stated)

Advances recoverable in cash or kind or for value to be received Less: Provision for Doubtful Advances Balance with Government Authority Advance Tax and Tax deducted at source 58.77 5.00 53.77 0.59 412.17 466.53 1,239.74 38.91 6.40 32.51 0.58 322.79 355.88 894.77
Note: Advances recoverable in cash or kind or for value to be received includes an amount of Rs.5.00 crores (31st March 2007 Rs. 6.40 crores) and Rs 1.88 crores (31st March 2007 Nil) recoverable from AEC Cements & Constructions Limited and Torrent Energy Limited respectively, companies under the same management { maximum amount outstanding during the year Rs. 6.40 crores (31st March 2007 Rs.6.40 crores)and Rs 1.88 crores (31st March 2007 nil) for AEC Cements & Constructions Limited and Torrent Energy Limited respectively}.
SCHEDULE 8 : CURRENT LIABILITIES AND PROVISIONS

(Rs. in crores)
CURRENT LIABILITIES Sundry Creditors (Refer Note 8 of Schedule 15) Investors Education and Protection Funds shall be credited by the following: Unclaimed Dividends Unclaimed Amount of Debentures and Interest thereon Unclaimed Fixed Deposits and Interest thereon Consumers Benefit Account Credit Balances of Consumers Interest Accrued but not Due on Loans and Security Deposits 0.99 * 0.03 12.01 31.38 32.86 835.38 PROVISIONS Provision for Gratuity and other fund Provision for Leave Encashment Provision for Taxation Proposed Dividend Provision for Corporate Dividend Tax 35.14 72.42 431.11 56.69 9.64 605.00 1,440.38 33.90 62.18 326.25 422.33 1,224.26 1.00 * 0.05 12.01 26.19 20.13 801.93 758.11 742.55
77
SCHEDULE 9 NET INCOME OF SERVICE DIVISION

(Rs. in crores)
INCOME Value of Contracts Billed and Service Charges [Tax Deducted at Source Rs.* (31st March 2007 Rs. *)] Miscellaneous Income Recovery of Bad Debts Provisions no longer required written back Increase / (Decrease) in Work in Progress EXPENDITURE Cost of Materials Labour Charges Salaries, Wages and Bonus Provision for Gratuity Provision for Leave Encashment Contribution to Provident and Other Funds Employees Welfare Expenses Insurance Legal Expenses Rates and Taxes Other Expenses Loss on Assets Discarded Depreciation Capital Tools Written Off Provision for Doubtful Debts [Net of Recovery Nil (31st March 2007 Rs.0.08 crore)] NET INCOME
10.33 0.10 0.01 0.40 10.84 0.30 2.05 1.03 0.07 * * * 0.01 0.10 3.56 7.28
4.88 0.75 0.01 1.70 (0.56) 6.78 1.32 0.38 0.88 0.03 0.01 0.08 0.01 * 0.01 0.14 0.02 * 0.01 (0.08) 2.81 3.97
SCHEDULE 10 NET INCOME OF FLY ASH DIVISION

(Rs. in crores)
Year ended Six Months ended 31st March,2008 31st March, 2007
INCOME Other Income EXPENDITURE Salaries, Wages and Bonus Provision for Gratuity Contribution to Provident Fund and E.S.I Other Expenses Loss on Assets Discarded Capital Tools Written Off Depreciation NET INCOME/(LOSS)
0.06 0.02 0.01 * 0.09 (0.09)
0.01 0.01 0.03 0.01 * * 0.19 0.02 0.01 0.26 (0.25)
SCHEDULE 11 OTHER INCOME

(Rs. in crores) Year ended 31st March, 2008 Six Months ended 31st March, 2007
Street Lighting Maintenance Contracts

4.51 34.01 33.76 0.78 7.86 1.77 1.72 3.80 88.21
2.36 16.51 17.49 1.21 0.31 2.25 3.24 2.64 0.72 46.73
Hire of Meters Miscellaneous Income Provisions no longer required written back Profit on Sale/Redemption of Current Investments Recovery of Bad Debts Interest from Contingency Reserve Investments
[Tax Deducted at Source Rs 0.20 crore (31st March 2007 Rs. 0.36 crore)]
Dividend Other Interest (Gross)

[Tax Deducted at Source Rs. 0.07 crore (31st March 2007 Rs. 0.09 crore)]
79
SCHEDULE 12: GENERATION, DISTRIBUTION, ADMINISTRATION AND OTHER EXPENSES
(Rs. in crores)
Fuel [after credit of claims of Rs.6.34 crores (31st March 2007 Rs.1.39 crores)] Consumption of Stores and Spares Rent and Hire Charges Repairs to Buildings Plant & Machinery Others Salaries & Wages Salaries, Wages and Bonus Contribution to Provident and Other Funds Employees Welfare Expenses Provison of Gratuity and Leave encashment Discount for prompt payment of bills Insurance Rates and Taxes Miscellaneous Expenses Amalgamation Expenditure Service Line Charges for Sub-Stations Loss on Sale of Investments Loss on Sale of Fixed Assets (net) Commission to Non Executive Directors Audit Fees Legal, Professional and Consultancy fees Donations Provision for doubtful debts \Bad debts written off Net of Provision of Rs 1.41 crores (31st March, 2007 Rs. 0.46 crore)
741.48 67.39 2.54 8.19 131.75 7.75 147.69 187.75 8.99 9.21 23.53 229.48 33.75 10.76 3.56 51.94 10.07 0.12 0.18 2.17 7.21 50.80 1,359.14 153.90 1,205.24
310.21 37.40 0.81 4.43 76.27 3.86 84.56 71.04 4.26 4.60 10.05 89.95 13.49 9.57 1.79 22.56 0.04 0.23 0.01 5.56 0.06 0.09 0.98 0.85 2.63 580.79 67.55 513.24
Less : Allocated to Capital Works, Repairs and Other Relevant Revenue Accounts
SCHEDULE '13' : INTEREST AND FINANCE CHARGES

(Rs. in crores)
Interest on Term Loans Interest on Security Deposits from Consumers Others including Finance Charges
22.10 21.38 16.30 59.78
10.20 6.66 2.57 19.43
SCHEDULE 14: SIGNIFICANT ACCOUNTING POLICIES
1.
Basis of Preparation of Consolidated Financial Statements: The Consolidated financial statements have been prepared by consolidating financial statements of the subsidiary Torrent Power Grid Limited and Torrent Pipavav Generation Limited with Torrent Power Limited, in accordance with generally accepted accounting principles and in consonance with Accounting Standard 21 (Consolidated financials statements) and Accounting Standard 23 (Accounting for Investments in Associates in the Consolidated Financial Statement) issued by the Institute of Chartered Accountants of India. The Financial statements are prepared and presented under the historical cost convention on accrual basis of accounting, in accordance with the accounting principles generally accepted in India and comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India. These statements have been prepared to meet requirement of Clause 32 of the listing agreement with the stock exchange.
2.
Principles of Consolidation: The consolidated financial statements comprise the financial statements of Torrent Power Limited and its subsidiaries. The consolidated financial statements have been combined on a line-by-line basis by adding the book values of items like assets, liabilities, income and expenses after eliminating intra-group balances/transactions. These consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances. The consolidated financial statements are presented, in the same format as that adopted by holding company for its separate financials statements.
3.
Other Significant Accounting Policies: These are set out in the Notes to Accounts under Significant Accounting Policies of the financial statements of Torrent Power Limited.
81
SCHEDULE '15' : NOTES ON ACCOUNTS 1. (i) Consolidated Financial Statements includes the Financial Statements of the parent company Torrent Power Limited and the following subsidiaries (together referred to as Group): Country of Incorporation India India % of Holding 74 80
Name of the Subsidiary Torrent Power Grid Limited Torrent Pipavav Generation Limited (incorporated on 25th September, 2007)
(ii) Investment in associates: The break up of the investment in associates are as under: Particulars No. of Equity Shares (Nos.) Percentage holding AEC Cements & Constructions Limited 611,500 43.88% Torrent Energy Limited 22,500 45%
These associates have not been considered for consolidation being not material to the Group.
(Rs. in crores) As at 31st March, 2008 As at 31st March, 2007
2.
Estimated amount of contracts remaining to be executed on Capital Accounts (Net of Advances) Contingent Liabilities not provided for in respect of: (i) Letters of Credit established & Guarantees given by banks on behalf of the Company (ii) Disputed Income-tax matters (iii) Disputed Sales-tax matters (iv) Disputed Custom Duty matters (v) Disputed Stamp Duty matter
125.80
195.59
3.
436.53 10.22 0.21 0.44 0.26
573.57 32.06 0.21 0.44 0.26
4.
The previous financials of the Company were for Six months from 1st October, 2006 to 31st March, 2007 and included the financials for the operations of Bhiwandi distribution circle for the period from 26th January, 2007 to 31st March, 2007. As a result, the figures of the previous financial period are not comparable with the figures of the current year. The Company has given Loans and Advances to its associates as under
(Rs. in crores) Name of Company Maximum amount outstanding during the year 6.40 1.88 Balance as on 31st March, 2008 5.00 1.88 6.88 Balance as on 31st March, 2007 6.40 6.40
5.
AEC cements & Constructions Limited Torrent Energy Limited Total
6.
Pre-operative expenditure pending allocation to 1147.5 MW SUGEN Combined Cycle Power Plant under implementation till the date of the balance sheet are as under;
(Rs. in crores)
Pre-operative Expenditure
Salary, wages, bonus, gratuity and superannuation Advertisement Insurance Legal, Professional and Consultancy Fees Rates and Taxes Director Sitting Fees Electricity Charges Miscellaneous Expenses Printing, Stationary, Postage and Telephone Repairs and Maintenance Traveling Expenses Auditors Remuneration Depreciation Loss on sale of Fixed Assets Provision for Wealth Tax Provision for Fringe Benefit Tax Total Expenditure 20.22 3.16 0.30 6.67 0.50 0.01 1.04 9.53 1.02 1.18 3.82 0.04 0.85 0.04 0.04 0.38 48.80 12.32 2.15 0.19 5.97 0.47 * 0.78 5.13 0.74 0.91 3.04 0.02 0.50 * 0.03 0.28 32.53
Pre-operative Expenses includes Managerial Remuneration to Director as under.

(Rs. in crores)
Particulars As at 31st March, 2008 As at 31st March, 2007
Salary and Other Allowances Contribution to Provident and Other Funds Total 7. (i)
0.14 0.01 0.15
The Company uses forward contracts to hedge its risk associated with foreign currency fluctuation relating to firm commitments. The Company does not use forward contracts for speculative purposes. The following are the outstanding foreign exchange contracts:
As at 31st March, 2008 As at 31stMarch, 2007
No. of Contracts Foreign Currency INR Equivalent
1 - USD 10 Million - Rs.45.33 crores
83
(ii) Foreign currency exposure not hedged by derivate instruments as at 31st March,2008 on capital imports amount to Rs 173.40 crores (Previous Period Rs.34.36 crores) 8. The Company has initiated the process of obtaining the confirmation from suppliers who have registered themselves under the Micro, Small and Medium Enterprises Development Act, 2006 ( MSMED Act, 2006 ). Based on the information available with the Company, the balance due to Micro and Small Enterprises as defined under MSMED Act, 2006 is Rs.0.97 crore. No interest has been paid or payable under MSMED Act, 2006 during the year. The confirmations of some of the parties for the amounts due to them / amount due from them as per books of accounts are not received. Necessary adjustments, if any, will be made when the accounts are reconciled / settled. Employee Benefits The accounting liability on account of gratuity and leave (retirement benefit in the nature of defined benefits plan) is accounted as per AS 15 (revised 2005) dealing with Employee benefits. The Company operates a defined benefit plan (the Gratuity and Leave Plan) covering eligible employees, which provides a lump sum payment to vested employees at retirement ,death, incapacitation or termination of employment, of an amount based on the respective employees salary and tenure of employment. Status of gratuity and leave Plan as required under AS 15 [revised] :
(Rs. in crores)
9.
10.
As at As at 31st March, 2008 31st March, 2007 Privilege Gratuity Privilege Gratuity Leave Leave Encashment Encashment Particulars a. Reconciliation of opening and closing balances of the present value of the defined benefit obligation: Obligations at the beginning of the period Current Service cost Interest Cost Actuarial (gain) / loss Benefits paid Obligations at the end of the period b. Reconciliation of opening and closing balances of the fair value of plan assets: Plan assets at the beginning of the period, at fair value Expected return on plan assets Actuarial gain / (Loss) Contributions Benefits paid Plan assets at the end of the period, at fair value
62.18 3.86 4.83 5.06 (3.51) 72.42
90.16 4.47 7.21 3.23 (6.30) 98.77
57.66 2.56 2.25 2.61 (2.90) 62.18
86.18 1.98 3.45 0.10 (1.55) 90.16
56.35 5.41 0.26 8.06 (6.30) 63.78
54.68 2.43 0.43 0.36 (1.55) 56.35
c.
d.
e.
Reconciliation of the present value of the defined benefit obligation and fair value of plan assets: Obligations at the end of the period Plan assets at the end of the period, at fair value Liability recognized in Balance sheet as at 31st March, 2008 Cost for the period: Current service cost Interest cost Expected return on plan assets Net Actuarial gain / (loss) Net Cost included in Schedule 9,10 and 12 of the profit and loss account Investment details of plan assets: Contributions to fund the obligations under the gratuity plan are made to Life Insurance Corporation of India, who has invested the funds substantially in the government securities. Assumptions Interest rate Expected rate of return on plan assets (Yield on long term bonds of Central Government prevailing on 31st March, 2008)
72.42 72.42 3.86 4.83 5.06 13.75
98.77 63.78 34.99 4.48 7.21 (5.41) 2.97 9.25
62.18 62.18 2.56 2.26 2.61 7.43
90.16 56.35 33.81 1.98 3.45 (2.43) (0.32) 2.68
f.
8.00% -
8.00% 9.00%
8.00% -
8.00% 8.75%
g.
Note The estimates of future salary increases considered in the actuarial valuation take account of inflation, promotion and other relevant factors, such as supply and demand in the employment market. Future separation and Mortality rates are obtained from relevant data of Life Insurance Corporation of India. Past four years data for defined benefit obligation and fair value of plan
(Rs. in crores)
2003-04 Present value of defined benefit obligations at the end of the period [independent actuary] Fair value of plan assets at the end of the period Net assets / (liability) at the end of period NA NA NA
2004-05 NA NA NA
2005-06
(18th Months)
2006-07
(6 Months)
NA NA NA
152.34 56.35 (95.99)
85
11.
The Profit and Loss Account includes:

Year Ended 31st March, 2008
(Rs. in crores) Six Months Ended 31st March, 2007
a.
Managerial Remuneration to Directors: Salary and Other Allowances Contribution to Provident and Other Funds Gratuity Provision Perquisites Commission Commission to Non Executive Director Payments to Auditors: Audit Fees Tax Audit Fees Other services certificates etc. Reimbursement of expenses
7.05 0.32 0.12 4.00 0.12 11.61 0.18 0.02 0.06 * 0.26
2.71 0.13 0.05 0.90 0.06 3.85 0.09 0.01 0.07 * 0.17
b.
12.
Deferred Tax: As at 31st March, 2008 Asset Liability Depreciation Provision for Gratuity Leave Encashment Provision for Doubtful Debts Municipal Taxes Amalgamation Expenses Provision for works contract Provision for wages Provision for ESI Claim Net Deferred Tax ( Asset ) / Liability 132.34 11.93 21.23 3.94 2.05 0.46 0.57 0.20 40.38 11.51 17.80 2.41 1.64 3.09 0.46 0.78 0.20 37.89
(Rs. in crores)
As at 31st March 2007 Asset Liability 69.40
0.77
133.11 92.73
69.40 31.51
13.
Earnings Per Share

Year ended 31st March, 2008 Six months ended 31st March, 2007
Profit after tax (Rs. in crores) No. of Equity Shares (in crores) Basic and Diluted Earnings per Share (Rs.) 14.
211.24 47.24 4.47
71.76 47.24 1.52
The Companys primary business segment is Generation and Distribution of Electricity. Based on the guiding principles given in Accounting Standard on Segment Reporting [(AS-17) issued by the Institute of Chartered Accountants of India] , this activity falls within a single primary business segment and accordingly the disclosure requirements of AS-17 in this regard are not applicable.
15. Related Party Disclosures

(Rs. in crores)
Enterprises controlled by the Company
Holding Company/ Enterprises controlled by the Holding Company Enterprises controlled by Key Management Personnel / Relatives of Key Management Personnel
Associates
Key Management Personnel
TOTAL
Six Six Six Six Six Six Year Months Year Months Year Months Year Months Year Months Year Months ended ended ended ended ended ended ended ended ended ended ended ended 31.03.08 31.03.07 31.03.08 31.03.07 31.03.08 31.03.07 31.03.08 31.03.07 31.03.08 31.03.07 31.03.08 31.03.07
A) Volume of Transactions Purchase of Materials Sale of Stores/ Materials / Scrap Services Provided Services Received Managerial Remuneration Loan Given Interest on Loan Received Loans Received Loan Repaid Equity Contribution Donation Contribution to Funds (Net) Current Liabilities Investment in Equities Loans & Advances
3.32 3.46 1.88 7.81 0.11 8.44 6.88
1.39 0.01 0.04 0.01 0.22 0.62 6.40
9.08 1.05 -
- 153.20 81.22 * 0.01 1.42 - 10.19 - 11.49 - 10.79 - 110.00 - 110.00 0.08 10.07 23.03 * -
3.80 -
1.12 1.05 0.01 -
- 156.52 82.61 - 0.01 0.01 1.42 0.58 14.77 0.62 - 11.49 3.80 1.88 - 10.79 - 110.00 - 110.00 7.81 0.01 0.25 1.05 0.25 9.08 0.08 0.02 11.24 23.27 8.44 0.62 6.88 6.40
B) Balances at the end of the period
87
Names of related parties and description of relationship: 1. Associates 2. Enterprises controlled by the company AEC Cements & Constructions Ltd. Torrent Energy Limited The Provident Fund of The Ahmedabad Electricity Company Limited (Contribution transferred to EPFO effective from 1.1.2006) Torrent Power AEC Limited Employees Group Gratuity Scheme Torrent Power AEC Limited Officers Superannuation Scheme The Provident Fund of Torrent Power SEC Limited (Contribution transferred to EPFO effective from 1.1.2006) Torrent Power SEC Limited Employees Group Gratuity Scheme Torrent Power SEC Limited Officers Superannuation Scheme TPGL Gratuity Trust TPGL Superannuation Fund
3. Holding Company / Enterprises controlled by the Holding Company
Torrent Private Ltd. Torrent Cables Ltd. Torrent Pharmaceuticals Ltd. Torrent Gujarat Biotech Ltd. Gujarat Lease Financing Ltd. Torrent Power Services Pvt. Ltd. Ahmedabad Royal Garden Hotel Pvt. Ltd. Gujarat Chlor Alkalies Industries Limited Sudhir Mehta Chairman Anita Mehta, wife Shardaben Mehta, Mother Samir Mehta, brother Varun Mehta, son Jinal Mehta, son Meena Modi, sister Nayna Shah, sister Markand Bhatt Whole-time Director Nandini Bhatt, wife Arvindbhai Bhatt, Brother Maltiben Joshi, sister Anjuben Trivedi, sister Vasudhaben Pandya sister Munjal Bhatt, son Gunjan Bhatt, son Murli Ranganathan Whole-time Director Jayashree M. Ranganathan, Wife T.P Ranganathan . Father Kaushalya Ranganathan Mother R.Vijay Kumar, brother Suhasini M. Ranganathan, Daughter Sujeet M. Ranganathan, son
4. Key Management Personnel
5. Relatives of Key Management Personnel
6. Enterprises controlled by Key Management Personnel / Relatives of Key Management Personnel
U. N. Mehta Charitable Trust D N Modi Charitable Trust Shardaben Mehta Charitable Trust Tsunami Tours & Travels Pvt. Ltd. Torrel Cosmetics Pvt. Ltd. Zeal Pharmachem India Pvt. Ltd. Munjal Bhatt Associates
16.
Details of political contributions

( Rs.in crores)
Year Ended 31st March, 2008
Six Months Ended 31st March, 2007
1. Bhartiya Janata Party 2. Indian National Congress
2.00 2.00
17.
Previous year's figures have been restated, wherever necessary, to conform to this year's classification. Figures are rounded off to nearest lakh. Figures below Rs. 50000 are denoted by '*'. Signature to Schedule 1 to 15
As per our report of even date For C. C. Chokshi & Co. Chartered Accountants Gaurav J. Shah Partner Ahmedabad, 15th May, 2008
Note : The Department of Company Affairs has, for the financial year 2007-08, exempted the Company from the applicability of the provisions contained in sub-section (1) of Section 212 of the Companies Act, 1956, relating to the statements to be attached in respect of the subsidiary companies, with the financial statements of the Company. The Department of Company Affairs has informed whilst granting exemption to provide the summarized financial details of each subsidiary. The details required are provided herewith. Shareholders interested in obtaining the statement of Companys interest in the subsidiaries or stand-alone financial statements of the subsidiaries may obtain it by writing to the Company Secretary. The annual accounts of subsidiary companies are available for inspection by any investor at the registered office of the Company.
89
Statement Pursuant to requirement of Department of Company Affairs for granting approval under Section 212(8) of the Companies Act, 1956 Related to Subsidiary Companies 1 2 3 4 5 6 7 Name of the Subsidary Company Financial year ended on Capital Reserves Total Assets Total Liabilities Details of investment (except in case of investment in subsidiaries) Turnover Profit before Taxation Provision for Taxation/ Deferred Tax Profit after taxation Proposed Dividend Torrent Power Grid Limited 31st March 2008 Rs. In Crores 30.03 Nil 31.17 1.14 Nil Torrent Pipavav Generation Limited 31st March 2008 Rs. In Crores 0.05 Nil 0.63 0.58 Nil
8 9 10 11 12
Nil Nil Nil Nil Nil
Nil Nil Nil Nil Nil
Sudhir Mehta Chairman Samir Mehta Director Rajiv Shah Company Secretary 15th May, 2008 Ahmedabad
91
NOTES
NOTES

Torrent Power Limited - Annaul Report 2007-08

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Happiness for all; a simple philosophy that continues to inspire us year on year.

Whole-time Director Whole-time Director Chairman

Shareholders' / Investors' Grievance Committee

Company Secretary Auditors Registered Office

Website Registrar and Share Transfer Agent

Annual Report 2007-2008

DIRECTORS' REPORT DIRECTORS' REPORT

All round improvement in the performance of the Company illustrated by:

2. Financial Results, Accounts and Dividend

Annual Report 2007-2008

Annual Report 2007-2008

Annual Report 2007-2008

FORM B: ANNEXURE TO DIRECTORS' REPORT

REPORT ON CORPORATE GOVERNANCE

Shri Sudhir Mehta, Chairman Shri S. K. Barua (a)

Promoter and executive director Non-executive independent director

Dr. Bakul H. Dholakia (b) Non-executive independent director

Annual Report 2007-2008

Name of the Director

Board Meetings attended 2

Attendance at the last AGM No

Smt. V. L. Joshi, IAS (c)

Shri Pankaj Patel

3 (as Chairman) 3 (as Member) 2 (as Chairman)

Shri Samir Mehta

Annual Report 2007-2008

Nil Nil Nil Nil Nil Nil Nil

200.00 0.50 2.40 1.50 3.20 Nil 3.20

519.25 0.50 2.40 1.50 3.20 Nil 3.20

Nil Nil Nil

302.40 128.30 749.95

200.00 Nil 411.80

502.40 128.30 1161.75

Annual Report 2007-2008

15th December, 2006 10.00 a.m.

30th July, 2007

Annual Report 2007-2008

* Closing data on the last day of the month.

Annual Report 2007-2008

Relative Performance of TPL Share Price Vs. S&P CNX Nifty

251 250 250

157 150 116

142 120 113 Jun-07 119 119 Jul-07 117 131

161 151 134 137 124

114 100 Apr-07 Mar-07

100 Nov-07 Oct-07 Dec-07 Aug-07 Sep-07 Mar-08 Feb-08 Jan-08

S & P CNX Nifty Index

TPL Share Price (Rs.)

Annual Report 2007-2008

Certificate of compliance with the Code of Business Conduct

To, The Shareholders, Torrent Power Limited

Annual Report 2007-2008

AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE

Ahmedabad 15th May, 2008

Annual Report 2007-2008

ANNEXURE TO THE AUDITORS' REPORT

Annual Report 2007-2008

(Rs in crores) Schedule As at 31st March, 2008 As at 31st March, 2007

472.45 2,417.31 2,889.76 2,476.00 61.25 2,537.25 334.68 92.73 5,854.42

472.45 2,232.93 2,705.38 1,464.23 162.89 1,627.12 300.80 31.51 4,664.81

8 834.23 604.99 1,439.22 (207.22) 5,854.42

Significant Accounting Policies Notes on Accounts