DIRECTORS REPORT

Dear Shareholders, Your Directors have pleasure in presenting the 5th Annual Report and Audited Accounts for the year ended on 31st March, 2010. Financial Results A summary of financial results for the year under review is given below: (Rs. in Lacs)

Particulars

For the year ended on 31st March, 2010

298.34 271.68 115.86 155.82 27.00 31.23 97.59 (50.54) 47.05

For the year ended on 31st March, 2009

31.45 (41.23) 9.31 (50.54) (50.54) (50.54)

Total Income Gross Profit before Depreciation, Interest and Tax Depreciation Interest Profit / (Loss) Before Tax Current Tax Deferred Tax Profit / (Loss) After Tax Balance brought forward Balance available for appropriation Appropriations Transfer to General Reserve Balance carried to Balance Sheet

47.05 47.05

(50.54) (50.54)

Dividend Your Directors do not recommend any dividend for the year under review. Operations The Company is a joint venture between Torrent Power Limited (TPL) and Power Grid Corporation of India Limited (PGCIL) for setting up transmission system for evacuation of power from 1147.5 MW SUGEN Generating Station. The system includes 400 kV Double Circuit lines from SUGEN Generating Station to 400 kV PGCIL sub-station at Pirana with LILO at 400 kV TPL sub-station at Pirana and 400 kV Single Circuit LILO on Jhanor-Vapi line of PGCIL at SUGEN Generating Station. The Company has received a Transmission License from Central Electricity Regulatory Commission to set up 400 kV transmission lines stated above. There being a change in the scope of work covered under the project, the Company has applied for amendment in the Transmission License as per provisions of Section 18(1) of the Electricity Act, 2003 to the Central Electricity Regulatory Commission (CERC). The Company has been

Torrent Power Grid Limited

conferred with powers under Section 68 and Section 164 of the Electricity Act, 2003 by the Ministry of Power, Government of India for laying transmission lines. Last year, the Company commissioned the first phase of 26 k.m. Single Circuit 400 kV LILO on Jhanor-Vapi line. During the year, the second phase of 80 k.m. 400 kV Double Circuit line for LILO of Jhanor-Dehgam line at SUGEN Generating Station has been commissioned. Work is in progress for the third phase which involves extending the aforesaid 400 kV Double Circuit line to Pirana sub-station. All orders have been placed and work is in progress for the third and final phase of 141 k.m. 400 kV Double Circuit line from SUGEN Generating Station to Pirana sub-station of PGCIL with LILO at 400 kV sub-station of TPL at Pirana. All efforts are being made to complete the third and final phase as per the schedule. The Company has also filed a petition with CERC for determination of transmission tariff for the first phase commissioned in March 2009 as per the provisions of CERCs Regulation (Terms and Condition of Tariff) 2004 and 2009. Financial Arrangements The Company allotted 3,00,00,000 equity shares of Rs. 10 each at par aggregating to Rs. 30 Crores to the joint venture partners viz. TPL and PGCIL in the ratio of 74:26 respectively during the year under review. With this, the paid-up equity share capital of the Company is Rs. 90 Crores. The Company has been sanctioned Term Loan of Rs. 244 Crores. The Company has availed disbursement of Rs. 135 Crores during the year under review which was outstanding as on 31st March, 2010. Directors Responsibility Statement In terms of Section 217(2AA) of the Companies Act, 1956, in relation to the financial statements for the year 2009-10, the Board of Directors states that: 1. 2. In preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures, if any; The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2010 and of the profit for the year ended on 31st March, 2010; The Directors have taken proper and sufficient care 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 The financial statements have been prepared on a going concern basis.

3.

4.

General (a) Directors Shri K. K. Shah retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Shri Mahesh Agrawal has been appointed as an Additional Director since the last Annual General Meeting. He holds office upto the commencement of the ensuing Annual General Meeting of the Company. Shri R. C. Singh was appointed as the Whole-time Director during the year under review. Your Directors recommend their appointment / re-appointment. Shri I. N. Jha resigned during the year under review. Shri Sudhir Shah is liable to retire by rotation at the ensuing Annual General Meeting. He has expressed his unwillingness to be re-appointed as a Director of the Company. The Board of Directors places on record its sincere appreciation for the valuable services rendered by them during their tenure. (b) Auditors M/s. C. C. Chokshi & Co., Statutory Auditors of the Company retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Your Directors recommend their re-appointment as Statutory Auditors of the Company.

10

Annual Report 2009-2010

(c)

Particulars of Employees The Company has not employed any employee during the year drawing remuneration exceeding the limits prescribed under the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended.

(d)

Conservation of Energy and Technology Absorption Since the Company is not a scheduled industry, details in respect of Form A pursuant to Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not furnished. Details relating to technology absorption required to be disclosed under the Rules are given in the annexure to and forms part of this report.

(e)

Foreign Exchange Earnings and Outgo During the year under review, foreign exchange earnings and outgo were nil.

(f)

Acknowledgement Your Directors place on record their appreciation for the promoters, TPL and PGCIL for continuous guidance and support extended to the Company.

For and on behalf of the Board of Directors

Gurgaon 30 April, 2010

th

S. K. Chaturvedi Chairman

Torrent Power Grid Limited

11

FORM B: ANNEXURE TO DIRECTORS REPORT

RESEARCH AND DEVELOPMENT (R&D)
1. Specific areas in which R&D was carried out by the Company 2. The Company did not carry out any basic R&D work during 2009-10.

Benefits derived as a result of above R&D initiatives Not Applicable

3.

Future Plan of Action Not Applicable

4.

Expenditure on R&D No expenditure of capital or recurring nature has been incurred on R&D.

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts made towards technology absorption, adaptation and innovation 2. Not applicable

Benefits derived as a result of the above efforts Not applicable

3.

In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished: a. b. c. d. Technology imported Year of import Has technology been fully absorbed? If not fully absorbed, areas where this has not taken place, reasons therefor and future plans of action Not Applicable Not Applicable Not Applicable

Not Applicable

For and on behalf of the Board of Directors

Gurgaon 30th April, 2010

S. K. Chaturvedi Chairman

12

Annual Report 2009-2010

AUDITORS REPORT

To the Shareholders of TORRENT POWER GRID LIMITED 1. We have audited the attached Balance Sheet of Torrent Power Grid Limited as at 31st March, 2010 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 Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 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. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors 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 and 5 of the said Order. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: a. b. c. d. 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; 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; the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report is in agreement with the books of account; 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; 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) (ii) (iii) 5. in the case of the Balance Sheet of the state of the affairs of the Company as at 31st March, 2010; in the case of the Profit and Loss Account, of the profit for the year ended on that date; and in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

2.

3.

4.

e.

On the basis of written representations received from the Directors as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; For C.C. CHOKSHI & CO. Chartered Accountants (Registration No. 101876W)

Ahmedabad, 1st May, 2010

(Gaurav J. Shah) Partner Membership No. 35701

Torrent Power Grid Limited

13

ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 3 of our report of even date) 1. 2. The nature of the Companys 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. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The fixed assets have been physically verified by the management during the year. According to the information and explanations given to us, no material discrepancies have been noticed on such verification. (c) 3. The Company has not disposed of a substantial part of fixed assets during the year.

(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 inventory followed by the management are 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 is maintaining proper records of inventory and no discrepancies were noticed on such physical verification.

4. 5.

The Company has neither granted nor taken any loans, secured/unsecured to/from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. 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 sale of services. During the course of audit we have not observed any continuing failure to correct major weaknesses in such internal controls. In our opinion and according to the information and explanations given to us, there are no transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956. The Company has not accepted any deposits from the public to which the provisions of Section 58A and 58AA of the Companies Act, 1956 and rules framed there under are applicable. In our opinion, the company has an adequate internal audit system commensurate with the size and the nature of its business. In respect of the services provided by the Company, maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub section (1) of Section 209. (a) According to the information and explanations given to us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Pension Fund, Professional tax, Investor Education and Protection Fund, Income tax, Sales tax, Wealth tax, Service tax, Custom Duty and Other Material Statutory dues with appropriate authorities during the year. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income tax, Wealth tax, Sales tax, Custom duty, Excise duty and cess were outstanding as at 31st March, 2010 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 Sales tax, Custom duty, Wealth tax, Service tax, Excise duty, Income tax and cess, which have not been deposited on account of any dispute.

6. 7. 8. 9 10.

11. 12. 13.

The Company has been registered for a period less than five years and therefore the provisions of clause (x) of Para 4 are not applicable. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

14

Annual Report 2009-2010

14. 15.

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. According to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, we report that no funds have been raised on short term basis have been used for long-term investment. 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. No debentures have been issued by the Company and hence the question of creating of securities or charges in respect thereof does not arise. During the year, the Company has not raised money by public issue. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

16. 17. 18. 19.

For C.C. CHOKSHI & CO. Chartered Accountants (Registration No. 101876W)

Ahmedabad, 1st May, 2010

(Gaurav J. Shah) Partner Membership No. 35701

Torrent Power Grid Limited

15

BALANCE SHEET
AS AT 31ST MARCH, 2010 Schedule As at 31st March, 2010 Rs. 900,000,000 33,121,008 1,350,000,000 3,122,987 2,286,243,995 As at 31st March, 2009 Rs. 600,000,000 600,000,000

SOURCES OF FUNDS Share Capital Reserves & Surplus Secured Loans Deferred Tax Liability (Net) TOTAL APPLICATION OF FUNDS Fixed Assets Gross Block Less: Depreciation Net Block Capital Work-in-Progress Pre-operative expenses incurred during construction to be capitalised on completion of project Investments Current Assets, Loans and Advances Inventories Sundry Debtors Cash and Bank Balances Loans and Advances Less: Current Liabilities and Provisions Current Liabilities Provisions Net Current Assets Debit Balance of Profit and Loss Account TOTAL Significant Accounting Policies and Notes on Accounts As per our report of even date For C.C. Chokshi & Co. Chartered Accountants

1 2 3

1,118,303,186 14,386,568 1,103,916,618 841,712,867 1,945,629,485 37,629,255 240,061,953 1,453,746 213,791,672 7,713,657 222,959,075

235,762,718 1,038,618 234,724,100 188,008,722 422,732,822 156,142 1,560,103 2,788,463 198,765,171 2,420,410 205,534,147 33,299,750 177,041 33,476,791 172,057,356 5,053,680 600,000,000

5 6 7

8 154,319,660 5,716,113 160,035,773 62,923,302 2,286,243,995 9 S.K. Chaturvedi Chairman Jagrut Vyas Managing Director V.C. Jagannathan Director

Gaurav J. Shah Partner

Kapil Khandelwal Director Nilesh Patel Company Secretary

Ahmedabad, 1st May, 2010

Gurgaon, 30th April, 2010

16

Annual Report 2009-2010

PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED 31ST MARCH, 2010 Schedule As at 31st March, 2010 Rs. As at 31st March, 2009 Rs.

INCOME Transmission Charges Income EXPENDITURE Salaries and Wages Salary, Wages and Bonus Contribution to PF and Other Funds Gratuity and Leave Encashment Repairs and Maintenance Expenses - Plant & Machinery Audit Fees Other Miscellaneous Expenses Miscellaneous Expenses written off Depreciation Less:Transferred from Overhead line contribution PROFIT/(LOSS) BEFORE TAX Provision For : Current Tax Deferred Tax PROFIT/(LOSS) AFTER TAX Balance Brought Forward from previous year Balance Carried to Balance Sheet Basic and Diluted Earnings per Share of face value of Rs.10 each (Refer Note 10 of Schedule 9) Significant Accounting Policies and Notes on Accounts As per our report of even date For C.C. Chokshi & Co. Chartered Accountants 9 S.K. Chaturvedi Chairman Jagrut Vyas Managing Director V.C. Jagannathan Director Gaurav J. Shah Partner Kapil Khandelwal Director Nilesh Patel Company Secretary 2,700,000 3,122,987 9,758,688 (5,053,680) 4,705,008 0.16 (5,053,680) (5,053,680) (0.16) 789,282 34,329 3,704 827,315 962,623 254,244 621,166 13,170,539 (1,584,000) 14,251,887 15,581,675 28,344 1,540 3,071 32,955 156,534 110,300 102,031 6,866,100 930,525 8,198,445 (5,053,680) 29,833,562 29,833,562 3,144,765 3,144,765

Ahmedabad, 1st May, 2010

Gurgaon, 30th April, 2010

Torrent Power Grid Limited

17

CASH FLOW STATEMENT

FOR THE YEAR ENDED 31ST MARCH, 2010 Year ended 31st March, 2010 Rs. Cash Flow from Operating Activities Net Profit Before Tax Adjustments For: Depreciation Miscellaneous Expenditure Written Off Operating Profit before Working Capital Changes (Increase)/Decrease in Receivables (Increase)/Decrease in Inventories Increase/(Decrease) in Current Liabilities and Provisions Cash Generated from Operations Taxes Paid Net Cash Flow from Operating Activities Cash Flow from Investing Activities Purchase of Fixed Assets (Including Capital Work in Progress) Purchase of Investments Net Cash used in Investing Activities Cash Flow from Financing Activities Proceeds from issue of Equity Shares Secured Loan Received Overhead line Contribution Unsecured loan Received Unsecured loan Paid Net Cash generated from Financing Activities Net increase in Cash and Cash Equivalents Cash and Cash Equivalents as at 01-04-2009 Cash and Cash Equivalents as at 31-03-2010 15,026,500 15,581,675 11,586,539 27,168,214 2,761,277 106,357 2,839,072 32,874,920 (5,266,061) 27,608,859 (1,452,520,405) (240,061,953) (1,692,582,358) 300,000,000 1,350,000,000 30,000,000 1,680,000,000 15,026,501 198,765,171 213,791,672 Year ended 31st March, 2009 Rs. (5,053,680) 930,525 6,866,100 2,742,945 (2,820,604) (1,560,103) 100,041 (1,537,721) (2,129,604) (3,667,325) (179,614,939) (179,614,939) 299,750,000 1,399,944 (1,399,944) 299,750,000 116,467,736 82,297,435 198,765,171

Note: 1 The Cash Flow Statement has been prepared under the Indirect Method set out in Accounting Standard3 Cash Flow Statement issued by the Institute of Chartered Accountants of India. As per our attached report of even date For C.C. Chokshi & Co. Chartered Accountants S.K. Chaturvedi Chairman Jagrut Vyas Managing Director V.C. Jagannathan Director Gaurav J. Shah Partner Kapil Khandelwal Director Nilesh Patel Company Secretary

Ahmedabad, 1st May, 2010

Gurgaon, 30th April, 2010

18

Annual Report 2009-2010

SCHEDULES
FORMING PART OF THE BALANCE SHEET SCHEDULE 1 : SHARE CAPITAL

As at 31st March, 2010 Rs. Authorised 12,50,00,000 Equity Shares of Rs.10/- each 1,250,000,000 1,250,000,000

As at 31st March, 2009 Rs.

1,250,000,000 1,250,000,000

Issued, Subscribed and Paid up 9,00,00,000 Equity Shares (Previous Year TOTAL of Rs.10/- each 900,000,000 600,000,000

6,00,00,000 Equity Shares of Rs. 10/- each) 900,000,000 600,000,000

Out of above, 6,65,99,500 (Previous Year 4,43,99,500) equity shares by Torrent Power Limited, the holding Company.

of Rs 10/- each fully paid up are held

SCHEDULE 2 : RESERVE AND SURPLUS

As at 31st March, 2010 Rs. As at 31st March, 2009 Rs.

Rs. Capital Reserve Overhead line contribution Less: Transferred to Profit & Loss Account 30,000,000 1,584,000

28,416,000

Balance in Profit and Loss Account TOTAL

4,705,008 33,121,008

Torrent Power Grid Limited

19

SCHEDULE 3 : SECURED LOANS

As at 31st March, 2010 Rs. Term Loan: Bank of Baroda (Repayable within one year Rs. Nil) TOTAL 1,350,000,000 1,350,000,000 As at 31st March, 2009 Rs.

(The above term loan is secured by way of first pari passu charge created on the entire moveable properties including transmission towers, insulators and other moveable assets, book debts, operating cash flows, revenues, intangibles, trust and retention account and by way of pledge of 30% shares held by Torrent Power Limited in the equity share capital of the Company)

SCHEDULE 4 : FIXED ASSETS (Rs.)

PARTICULARS As at 1-Apr-09 GROSS BLOCK Additions during the year Deductions during the year As at 31-Mar-10 As at 1-Apr-09 DEPRECIATION Additions during the year Deductions As at during 31-Mar-09 the year NET BLOCK As at 31-Mar-10 As at 31-Mar-09

Overhead Transmission Line Furniture, Fixtures and Office Equipments Vehicles TOTAL Previous Year Capital Work-in Progress 682,693 235,762,718 682,693 1,468,301 639,060 882,540,468 235,080,025 1,468,301 1,321,753 1,118,303,186 235,762,718 108,093 1,038,618 43,237 87,439 89,972 13,347,950 995,381 87,439 198,065 14,386,568 1,038,618 1,380,862 1,123,688 1,103,916,618 841,712,867 1,945,629,485 Note: Additions during the year and Capital Work-in-Progress include borrowing cost of Rs. 5,13,55,698 (Previous Year Rs. Nil) incurred during the year, which are directly attributable to construction of qualifying assets in accordance with Accounting Standard-16 Borrowing Costs notified by the Companies (Accounting Standards) Rules, 2006. 574,600 234,724,100 234,724,100 188,008,722 422,732,822 235,080,025 880,433,107 1,115,513,132 930,525 13,170,539 14,101,064 1,101,412,068 234,149,500

20

Annual Report 2009-2010

SCHEDULE 5 : PRE-OPERATIVE

EXPENSES

INCURRED

DURING

CONSTRUCTION

TO

BE

CAPITALISED ON COMPLETION OF PROJECT

As at 31st March, 2010 Rs. PRE-OPERATIVE EXPENSES Salary , Wages and Bonus Gratuity and Leave Encashment Contribution to Provident and Other Funds Employee Welfare Expenses Insurance Expenses Advertisement Expenses Repairs & Maintenance Expenses-Others Audit Fees Director Sitting Fees Professional Fees Registration and Filing Fees Traveling Expenses Miscellaneous Expenses Depreciation Interest and Finance Charges Fringe Benefit Tax As at 31st March, 2009 Rs.

13,590,563 1,734,932 997,400 180,774 91,876 71,400 362,085 2,754,008 976,674 4,079,790 182,816 51,655,898 10,000 76,688,216

3,440,976 27,642 292,670 43,474 53,604 151,975 701,055 132,574 195,000 1,199,853 100,000 496,685 1,453,738 108,093 66,000 8,463,339 5,452,230

Less : INCOME Interest on Bank Fixed Deposits {Tax Deducted at Source Rs.6,56,614 (Previous Year Rs.80,926)} Rent Recovery from Employees Dividend on Investments Less : Provision for Income Tax

4,051,380

Less: Capitalised during the year Pre-Operative expenses incurred during construction to be capitalised on completion of the Project (Net)

5,600 61,953 4,118,933 72,569,283 34,940,028

61,000 5,391,230 3,072,109 2,915,967

37,629,255

156,142

Torrent Power Grid Limited

21

SCHEDULE - 6 INVESTMENTS (AT COST)

As at 31st March, 2010 No. of Units Rs. Current Investments - Non Trade In Units (Unquoted) Kotak Floater Long Term Plan - Daily Dividend HDFC Cash Management Fund. - Treasury Advantage Plan Birla Sun Life Savings Fund -Institutional Daily Dividend ICICI Prudential Flexible Income Plan Daily Dividend TOTAL 9,923,121 3,988,546 100,023,075 40,011,100 As at 31st March, 2009 No. of Units Rs.

4,998,104

50,015,025

473,001

50,012,753 240,061,953

No. of Units Current Investments purchased and sold during the year: Kotak Liquid (Institutional Premium) Daily Dividend HDFC Liquid Fund - Daily Dividend Birla Sun Life Cash Plus - Institutional Daily Dividend ICICI Prudential Liquid Super Institutional Plan - Daily Dividend

Rs.

No. of Units

Rs.

8,178,781 3,922,645 4,629,186

100,010,950 40,003,922 50,005,855

499,939

50,004,988

22

Annual Report 2009-2010

SCHEDULE 7 CURRENT ASSETS, LOANS AND ADVANCES

As at 31st March, 2010 Rs. CURRENT ASSETS Inventories Stores and Spares Sundry Debtors (Unsecured) (Considered Good) Debts outstanding for a period exceeding six months Other-Torrent Power Limited (Holding Company) (Maximum Balance outstanding during the year Rs 2,46,41,205/-, Previous year Rs. 27,88,463/-) As at 31st March, 2009 Rs.

1,453,746

1,560,103

2,788,463

Cash and Bank Balances Cash on hand Balance with scheduled banks in : Current Accounts Fixed Deposit Accounts

8,523

10,913

33,563,149 180,220,000 213,791,672

6,234,258 192,520,000 198,765,171

LOANS & ADVANCES (Unsecured Considered Good) Advances recoverable in cash or in kind or for value to be received Advance Tax and Tax Deducted at Source

261,659 7,451,998 7,713,657

234,473 2,185,937 2,420,410 205,534,147

TOTAL

222,959,075

Torrent Power Grid Limited

23

SCHEDULE 8 CURRENT LIABILITIES AND PROVISIONS

As at 31st March, 2010 Rs. CURRENT LIABILITIES Sundry Creditors (Other than Micro, Small and Medium Enterprises) PROVISIONS Provisions For : Taxes Gratuity Leave Encashment As at 31st March, 2009 Rs.

154,319,660 154,319,660

33,299,750 33,299,750

2,827,000 1,934,970 954,143 5,716,113 160,035,773

127,000 23,521 26,520 177,041 33,476,791

TOTAL

24

Annual Report 2009-2010

SCHEDULE - 9 SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE ACCOUNTS
A) 1. Significant Accounting Policies 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 otherwise than stated specifically. 2. Use of Estimates: The presentation and assumptions and the reported actual result and 3. Capital Receipts: Contribution received from Gujarat Mineral Development Corporation Limited towards construction of Overhead Lines is treated as capital receipt and accounted as Capital Reserve. 4. Revenue Recognition: Revenue (income) is recognized when no significant uncertainty as to the measurability or collectability exists. 5. Inventories: Inventories are valued at weighted average cost or net realizable value whichever is lower. 6. 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. 7. 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. 8. 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. 9. Depreciation and Amortisation: Depreciation is provided on Straight Line Method at the rates prescribed under Schedule XIV to the Companies Act, 1956 or at the rates prescribed under the Central Electricity Regulatory Commission (Terms & Conditions of Tariff) Regulations, 2009, whichever is higher. The depreciation rates on the assets as mentioned below have been used for providing depreciation, which are higher than the rates prescribed under Schedule XIV to the Companies Act, 1956: Asset Description Overhead Lines Office Equipments Rate 5.28% 6.33% of financial statements requires certain estimates and assumptions. These estimates affect the reported amount of assets and liabilities on the date of financial statements amount of revenues and expenses during the reporting year. Difference between the estimates are recognized in the year in which the results are known / materialized.

Torrent Power Grid Limited

25

Depreciation is provided on additions / deductions of the assets during the period from / up to the month in which the asset is added / deducted. 10. 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. 11. 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 the balance sheet date. Deferred tax assets are recognized and carried forward if there is reasonable certainty that sufficient future taxable income will be available against which such assets can be realized. 12. Provisions, Contingent Liabilities and Contingent Assets: Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an out flow 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 the financial statements. B) 1) 2) 3) Notes Forming Part of Accounts: Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 53,96,60,870 (Previous Year Rs. 174,72,05,618) Contingent Liabilities not provided for in respect of guarantees given by banks on behalf of the Company -Rs. 2,20,000 (Previous year Rs. Nil). Hitherto, the Company followed accounting policy of providing depreciation on fixed assets as per Straight line Method and at the rates prescribed under Schedule XIV to the Companies Act, 1956. Effective from 1st April, 2009, with an objective of more appropriate presentation of the financial statements, the Company has changed the policy to provide the depreciation as per Straight line Method and at the higher of (i) rates prescribed under Schedule XIV to the Companies Act, 1956 or (ii) rates prescribed under the Central Electricity Regulatory Commission (Terms & Conditions of Tariff) Regulations, 2009. Consequently, the depreciation charged to the Profit and Loss Account is higher for the year by Rs. 11,63,448 and profit before taxation for the year is lower by the same amount. The Companys primary business is Transmission 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 simple primary business segment and accordingly the disclosure requirements of AS-17 in this regard are not applicable. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding as at the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

4)

5)

26

Annual Report 2009-2010

6)

Pre-operative Expenses includes Managerial Remuneration to Director as under: (Rs.) 31

st

Year ended March, 2010 9,98,764 82,295 10,81,059

31

st

Year ended March, 2009 10,71,800 1,24,106 11,95,906

Salary and Other allowances Contribution to Provident and Other Funds Total

Note: Managerial Remuneration is subject to Shareholders approval at the ensuing Annual General Meeting. 7(a).
1 2

Names of Related Parties and description of relationship.

Associates Holding Company/ Enterprise Controlled by the Holding Company Power Grid Corporation of India Limited Torrent Power Limited Torrent Private Limited Torrent Energy Limited Torrent Pipavav Generation Limited Torrent Power Bhiwandi Limited Torrent Pharmaceuticals Limited Torrent Cables Limited Gujarat Lease Financing Limited Torrent Power Services Private Limited Heumann Pharma Gmbh & Co. Generica KG, Torrent Do Brasil Ltda. Zao Torrent Pharma Torrent Pharma GmbH. Torrent Pharma Inc. Torrent Pharma Philippines Inc. Torrent Australasia Pty Ltd. Laborotrios Torrent SA de CV Torrent Pharma Japan Co. Ltd Torrent Power AEC Limited Employees Group Gratuity Scheme Torrent Power AEC Limited Officers Superannuation Scheme Torrent Power SEC Limited Employees Group Gratuity Scheme Torrent Power SEC Limited Officers Superannuation Scheme TPGL Gratuity Trust TPGL Superannuation Fund TPL Employee Group Gratuity Trust TPL Employee Superannuation Trust AEC Cements & Constructions Limited

3 4 5

Enterprise Controlled by the Company Key Management Personnel Relatives of Key Management Personnel

TPG Gratuity Trust TPG Superannuation Fund Jagrut Vyas Managing Director R C Singh Director Harsha Vyas, Wife Mahek Vyas, Son Satin Vyas, Brother Meena Vyas, Sister Bhavana Vyas, Sister Chetna Vyas, Sister Pushpa Singh, Wife Wanshraji Devi, Mother Riteshkumar Singh, Son Poonam Singh, Sons wife Master Yajush, Sons son.

Torrent Power Grid Limited

27

28

7(b) (Rs)
Associates controlled by the Company
Year ended 31.03.09 31.03.10 31.03.09 31.03.10 31.03.09 31.03.10 31.03.09 Year ended Year ended Year ended Year ended Year ended Year ended

Related Party Disclosures:

Enterprises Enterprises controlled by the Holding Company
Year ended 31.03.10 Year ended 31.03.09

Holding Company/ Personnel

Annual Report 2009-2010

Key Management TOTAL
31.03.10 77,87,753 77,87,753 3,52,51,328 90,397 5,44,21,984 3,52,51,328 4,63,22,726 31,44,765 4,63,22,726 31,44,765 27,04,571 27,04,571 13,99,944 13,99,944 10,88,603 11,95,906 10,88,603 27,04,571 27,04,571 11,95,906 13,99,944 13,99,944 18,35,715 77,935,000 22,20,00,000 221,815,000 18,35,715 30,00,00,000 299,750,000 156,000,000 66,59,95,000 27,88,463 44,39,95,000 89,99,95,000 27,88,463 59,99,95,000

Year ended

A) Volume of transactions :

Purchase of

Materials

Services

Received

5,43,31,587

Services

Provided

Managerial

Remuneration

Loans Received

Loans Paid

Contribution

to Funds

Equity Contribution

7,80,00,000

B) Balances at the end of the year :

Receivable

Share Capital

23,40,00,000

8) Payment to Auditors: (Rs) Year ended 31st March, 2010 Audit Fees Tax Audit Fees Other Services certificates etc. Reimbursement of Expenses Total 1,65,450 55,150 33,090 554 2,54,244 Year ended 31st March, 2009 1,10,300 1,10,300

9) Employee Benefits: The accounting liability on account of gratuity and leave encashment (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.

Torrent Power Grid Limited

29

Status of Gratuity and Leave Plan as required under AS-15 [revised]: (Rs.) As at 31st March, 2010 Particulars a. Reconciliation of opening and closing balances of the present value of the defined benefit obligation: Obligations at the beginning of the year Current Service cost Interest Cost Actuarial (gain) / loss Benefits paid Obligations at the end of the year Leave Encashment Gratuity As at 31st March, 2009 Leave Encashment Gratuity

26,520 8,96,889 2,254 2,760 9,28,423

56,435 2,73,627 3,243 31,29,900 34,63,205

26,520 26,520

56,435 56,435

b. Reconciliation of opening and closing balances of the fair value of plan assets: Plan assets at the beginning of the year, at fair value Expected return on plan assets Actuarial gain / (Loss) Contributions Benefits paid Plan assets at the end of the year, at fair value c. Net Liability/(Asset) recognised in the Balance Sheet as at 31st March, 2010. Obligations at the end of the year Plan assets at the end of the year, at fair value Liability recognized in the Balance sheet as at 31-Mar-2010. d. Cost for the period: Current service cost Interest cost Expected return on plan assets Net Actuarial loss/ (gain) Liabilities assumed on transfer of employee Net cost 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 31-Mar-2010) Note:

32,914 72,203 (47,206) 14,70,324 15,28,235

32,914 32,914

9,28,423 9,28,423

34,63,205 15,28,235 19,34,970

26,520 26,520

56.435 32,914 23,521

8,96,889 2,254 2,760 9,01,903

2,73,627 3,243 (72,203) 31,77,106 (27,04,571) 6,77,202

26,520 26,520

56,435 56,435 56,435

8.25% -

8.25% 9.25%

7.25% -

7.25% 9.00%

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 obtained from relevant data of Life Insurance Corporation of India.

30

Annual Report 2009-2010

10)

Earnings per Share (Rs.) Year ended 31st March, 2010 Year ended 31st March, 2009 (50,53,680) 10 3,16,67,466 (0.16)

Profit/(Loss) after tax (Rs.) Nominal Value per Equity Share (Rs.) No. of Equity Shares (Weighted) Basic and Diluted Earnings per Share (Rs.)

97,58,688 10 6,05,75,342 0.16

11) The components of Deferred tax liability and assets as at 31st March, 2010 are as under: (Rs.) As at 31st March, 2010 a) Deferred tax liability: Depreciation b) Deferred tax assets: Preliminary Expenses Provision for gratuity Provision for leave encashment Unabsorbed depreciation Net Deferred tax liability 3,18,23,223 As at 31st March, 2009 -

14,00,272 6,57,696 3,24,313 2,63,17,955 31,22,987

12) Previous year figures have been regrouped and rearranged, wherever considered necessary. Signatures to Schedule 1 to 9

As per our attached report of even date For C.C. Chokshi & Co. Chartered Accountants

S.K. Chaturvedi Chairman Jagrut Vyas Managing Director V.C. Jagannathan Director

Gaurav J. Shah Partner

Kapil Khandelwal Director Nilesh Patel Company Secretary

Ahmedabad, 1st May, 2010

Gurgaon, 30th April, 2010

Torrent Power Grid Limited

31

BALANCE SHEET ABSTRACT

BALANCE SHEET ABSTRACT AND COMPANYS GENERAL BUSINESS PROFILE: ADDITIONAL INFORMATION UNDER PART IV OF THE SCHEDULE VI OF THE COMPANIES ACT, 1956
I Registration Details Registration Number Balance Sheet Date II r 3 r 1 r 0 4 3 6 2 6 0 6 1 0 State Code 0 r r r 4 4 0 0 4

Capital raised during the year (Rs. in thousands) Public Issue Right Issue Bonus Issue Private Placement N I 3 4 4 4 0 4 4 4 0 N N N 0 I I I 0 L L L 0

III

Position of Mobilisation and Deployment of Funds (Rs. in thousands) Total Liabilities Sources of Funds Paid up Capital Reserves and Surplus Secured Loans Unsecured Loans Deferred Tax Liabilities Service Line and 1 3 r 4 9 0 3 5 0 0 0 3 0 0 3 0 1 0 N 1 0 2 0 I 2 6 2 2 8 6 2 4 4 Total Assets Application of Funds 0 Net Fixed Assets and CWIP 1 Investments 0 Net Current Assets L Pre-operative Expenses 3 Miscellaneous Expenditure Accumulated Losses r 3 5 r r 1 2 6 1 9 2 1 9 4 4 6 3 0 4 5 0 2 7 0 6 0 9 6 N N 3 6 2 2 I I 0 2 3 9 L L 6 2 2 8 6 2 4 4

IV

Performance of the Company (Rs. in thousands) Turnover Total Expenditure Profit / (Loss) before Tax Profit / (Loss) after Tax Earnings per Share (in Rs.) Dividend Rate % 4 3 r r r r 4 9 4 4 r r 6 8 ( ( ( r 2 1 1 5 0 4 9 4 5 9 0 4 8 2 5 7 . 2 3 5 8 5 1 0 4 2 2 9 6 -

Generic names of Principal Products / Services of Company (as per monetary terms) Item Code No. (ITC Code) Product Description r r r r r r 4 4 4 4 0 0 N A N A

S.K. Chaturvedi Chairman Jagrut Vyas Managing Director V.C. Jagannathan Director Kapil Khandelwal Director Nilesh Patel Company Secretary Gurgaon, 30th April, 2010
32

Annual Report 2009-2010