The Directors have pleasure in presenting the 7th Annual Report of the
 Company together with the Audited Accounts for the year ended on 31st
 March, 2011.
 
 1.  HIGHLIGHTS
 
 The key highlights for the Financial Year 2010-11 are: 
 
 O All round improvement in the financial performance of the Company
 Increase in Revenue by 12.23% to Rs. 6,535.64 Crores Increase in PBDIT
 by 17.68% to Rs. 2,160.40 Crores Increase in PAT by 27.40% to Rs.
 1,065.72 Crores
 
 O Reduction in T&D losses in Ahmedabad, Gandhinagar and Surat
 distribution circles to 7.23% as against 7.62% in FY 2009-10; one of
 the lowest in the country. Reduction in T&D losses in Bhiwandi also to
 17.95% as against 19.33% in FY 2009-10.
 
 O Multi Year Tariff Petition for the second control period from FY
 2011-12 to FY 2015-16 in respect of Ahmedabad Generation (AMGEN),
 Ahmedabad Distribution and Surat Distribution has been filed with the
 Honble Gujarat Electricity Regulatory Commission (GERC) .
 
 O First year of Distribution Franchisee operations at Agra commenced
 from 1st April, 2010.
 
 O The 1,147.5 MW Sugen Mega Power Plant has obtained ISO 9001, ISO
 14001 and OHSAS 18001 certifications.
 
 O The EPC contract for the 1,200 MW Gas based DGEN Mega Power Project
 at Dahej SEZ (being implemented by the Companys subsidiary - Torrent
 Energy Limited) has been signed with Siemens and construction work is
 in progress.
 
 O The 382.5 MW UNOSUGEN Gas based plant, the brown field expansion to
 SUGEN Project has received Mega Power Project Status. EPC Contract has
 been awarded to Siemens and construction work is in progress.
 
 O The third and final phase of 144.5 kms, 400 kV Double Circuit line,
 part of transmission infrastructure from SUGEN Generating Station to
 Pirana sub-station of PGCIL with Loop in Loop out at 400 kV sub-station
 of the Company at Pirana has been commissioned by a subsidiary of the
 Company.
 
 O Entry into renewable energy sector by signing agreement with Enercon
 (India) Limited to commission the 44 MW Wind power generation project
 at Lalpur, District Jamnagar, Gujarat.
 
 2.  FINANCIAL RESULTS
 
 A summary of the financial results for the year under review is as
 under:
 
                                                         (Rs. Crores)
 
                                        For the year      For the year
 Particulars                               ended on        ended on
                                     31st March, 2011   31st March, 2010
 
 Total Income                                6,927.02          5,956.66
 
 Profit before Depreciation, 
 Interest and Tax                            2,160.40          1,835.86
 
 Depreciation                                  392.68            335.35
 
 Interest                                      338.90            314.06
 
 Profit before Tax                           1,428.82          1,186.45
 
 Current Tax                                   285.22            207.50
 
 Deferred Tax                                   99.35            142.40
 
 (Excess) / Shortfall in provision 
 for Taxation for earlier years                (21.47)              -
 
 Profit After Tax                            1,065.72            836.55
 
 Add: Balance brought forward                  499.40            229.12
 
 Less: Statutory Appropriation                   1.00              1.00
 
 Balance available for appropriation         1,564.12          1,064.67
 
 Appropriations
 
 Transfer to General Reserve                   400.00            400.00
 
 Proposed Dividend                             259.85            141.73
 
 Dividend Distribution Tax                      42.15             23.54
 
 Balance carried to Balance Sheet              862.12            499.40
 
 Total                                       1,564.12          1,064.67
 
 3.  DIVIDEND
 
 The Board of Directors has decided that the Company as a policy will
 endeavor to distribute 30% of its annual profits after tax as dividend.
 The said distribution is expected to be in one or more tranches.
 
 In line with the said policy, the Board of Directors has recommended a
 normal annual dividend of 30% i.e. Rs. 3.00 per equity share (Previous
 Year 30% - Rs. 3.00 per equity share) and a special dividend of 25%
 i.e. Rs. 2.50 per equity share on 47,24,48,308 equity shares of Rs.
 10/- each for the FY 2010-11, amounting to Rs. 259.85 Crores (Previous
 Year Rs. 141.73 Crores). With Dividend Distribution Tax of Rs. 42.15
 Crores (Previous Year Rs. 23.54 Crores), the total outflow on account
 of dividend works out to Rs. 302 Crores (Previous Year Rs. 165.27
 Crores). The distributed profits are 28% (Previous Year 20%) of annual
 profits after tax. The proposed dividend would be tax free in the hands
 of the shareholders.
 
 12.  SUBSIDIARIES
 
 The Company has three subsidiary companies namely, Torrent Power Grid
 Limited, Torrent Energy Limited and Torrent Pipavav Generation Limited.
 
 A.  Torrent Power Grid Limited
 
 During the year, the third and final phase of the Project (for
 evacuation of power from SUGEN power generating station) of 144.5 kms
 400 kV Double Circuit line as part of transmission infrastructure from
 SUGEN to Pirana sub-station of Power Grid Corporation of India Limited
 with Loop in Loop out at 400 kV sub-station of the Company at Pirana
 has been commissioned.
 
 The company has filed a petition for determination of tariff for the
 first and second phase of the Project pursuant to the provisions of
 CERC (Terms and Conditions of Tariff) Regulations, 2009.
 
 B.  Torrent Energy Limited (DGEN)
 
 Torrent Energy Limited is implementing the gas based DGEN Mega Power
 Project at Dahej SEZ. It proposes to establish 3 units of approximately
 400 MW each for which the EPC contract has been awarded. Environmental
 clearance has been received from MoEF for 2 units and the Terms of
 Reference for other unit have been approved. EPC implementation is in
 progress. Non-EPC work has commenced and raw water reservoir and road /
 drains are nearing completion. Connectivity and Long Term Open Access
 for 1,200 MW has been granted by the Central Transmission Utility. The
 project is expected to meet 387 MW additional demand of Ahmedabad and
 Surat distribution.
 
 C.  Torrent Pipavav Generation Limited
 
 Torrent Pipavav Generation Limited is setting up the 1,000+ MW
 coal-based power project at Pipavav in Amreli District of Gujarat. The
 project has Coal Linkage of Baitarni coal mines and will meet the
 balance requirement of coal through additional domestic coal linkages /
 imports. Though the Honble Gujarat High Court has approved the consent
 settlement with the land owners, the Company is still facing
 difficulties in land acquisition and efforts are being made to resolve
 the issue. Terms of Reference have been cleared by MoEF and
 environmental field studies have been completed.
 
 D.  Torrent Power Bhiwandi Limited
 
 During the year under review, the Company has divested its shareholding
 from Torrent Power Bhiwandi Limited (TPBL). TPBL has, therefore, ceased
 to be a subsidiary of the Company.
 
 13.  ENVIRONMENT, HEALTH AND SAFETY
 
 The Company accords the highest priority to Environment, Health and
 Safety. The Company has forayed into the wind sector and is in the
 process of setting up the 44 MW wind power project. In line with its
 
 philosophy of according the highest importance to safety in its various
 operations, it is focusing on mitigating high risks in its operations
 at all locations. Apart from laying down stringent operating
 procedures, appropriate technology is also being deployed for
 mitigating risks particularly to human lives. Safety campaigns and
 public awareness programmes have been enhanced.
 
 14.  CORPORATE SOCIAL RESPONSIBILITY
 
 The Companys CSR initiatives are highly influenced by the philosophies
 of its group Founder Chairman, Shri U. N. Mehta. He firmly believed
 that it was the responsibility of every member of the society to give
 back for all the good that the society has bestowed upon them. The
 Company continues to make focused efforts for fulfilling its Corporate
 Social Responsibility, with the thrust areas being education, health &
 sanitation and public awareness.
 
 During the year, the Company carried out the following CSR activities:
 
 • Expansion of U. N. Mehta Institute of Cardiology and Research Centre
 (UNMICRC), state of the art cardiac hospital with 450 beds, which has
 since been completed. The Company has contributed Rs.  4 Crores during
 the year and cumulatively Rs. 15 Crores for this project. The new
 facility would include ICUs and ICCUs, cath labs, AHU rooms, conference
 room, auditoriums and library.
 
 • The Company has completed construction of class rooms at Government
 Primary School, Aanganwadi and play ground for children at Akhakhol
 village, District Surat. The Company provides medical support to
 residents and nutrition support to the children of Akhakhol.
 
 • The Company has also sponsored Shardashish Scholarship Programme
 through U. N. Mehta Charitable Trust, which provided financial support
 to 50 meritorious students from economically weak background.
 
 15.  DIRECTORS
 
 During the year under review, term of appointment of Shri Sudhir Mehta,
 Executive Chairman was pre- closed and he was appointed afresh for a
 period of 5 years effective from 1st August, 2010. Shri Samir Mehta has
 been appointed as Executive Vice Chairman for a period of 5 years
 effective from 1st August, 2010.  Also, the term of appointment of Shri
 Markand Bhatt and Shri Murli Ranganathan, Whole-time Directors were
 pre-closed and they were appointed afresh for a period of 5 years
 effective from 1st April, 2011. Shri T. P. Vijayasarathy has been
 appointed as Whole-time Director for a period of 5 years effective from
 1st November, 2010.
 
 Shri Murli Ranganathan and Shri S. K. Barua retire by rotation and
 being eligible, they have offered themselves for re-appointment.
 
 For your perusal, a brief resume of the Directors being appointed /
 re-appointed and other relevant details are given in the Explanatory
 Statement to the Notice convening the Annual General Meeting. The Board
 of Directors recommends their appointment / re-appointment for approval
 of the shareholders of the Company.
 
 16.  CORPORATE GOVERNANCE
 
 The governance philosophy of the Company rests on five basic principles
 viz. protection of rights and interests 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.
 
 This report deals with the matters stipulated for the Management
 Discussion and Analysis Report. A report on Corporate Governance also
 forms part of the Annual Report. Certificate of the Auditors regarding
 compliance with the Corporate Governance code is also attached to the
 Annual Report.
 
 17.  AUDITORS
 
 M/s. Deloitte Haskins & Sells, Chartered Accountants, the Statutory
 Auditors of the Company 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 Statutory Auditors of
 the Company, pursuant to Section 224(1B) of the Companies Act, 1956.
 
 Observations made in the Auditors Report are self-explanatory and
 therefore, do not call for any further comments.
 
 18.  DIRECTORS RESPONSIBILITY STATEMENT
 
 In terms of Section 217(2AA) of the Companies Act, 1956, in relation to
 the financial statements for the year 2010-11, the Board of Directors
 states that:
 
 1.  In preparation of the annual accounts, the applicable accounting
 standards have been followed along with proper explanation relating to
 material departures, if any;
 
 2.  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, 2011 and of the profit for the year
 ended on 31st March, 2011;
 
 3.  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
 
 4.  The financial statements have been prepared on a going concern
 basis.
 
 19.  CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 The details relating to technology absorption, foreign exchange
 earnings and outgo prescribed under the Companies (Disclosure of
 Particulars in the Report of Board of Directors) Rules, 1988 (“the
 Rules) are given in the Annexure to and forms part of this report. As
 the Company is not a scheduled industry, details in respect of
 conservation of energy pursuant to the said Rules are not furnished.
 
 20.  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.
 
 21.  APPRECIATION AND ACKNOWLEDGEMENTS
 
 The Directors are pleased to place on record their appreciation for the
 continued guidance and support received from the Central Government,
 Government of Gujarat, Government of Maharashtra, Government of Uttar
 Pradesh, Central Electricity Regulatory Commission, Central Electricity
 Authority, Gujarat Electricity Regulatory Commission, Maharashtra
 Electricity Regulatory Commission, Uttar Pradesh Electricity Regulatory
 Commission, Western Region Power Committee, National Load Dispatch
 Centre, Regional Load Dispatch Center, State Load Dispatch Centre,
 Gujarat Urja Vikas Nigam Limited, Gujarat Energy Transmission
 Corporation Limited, Maharashtra State Electricity Distribution Company
 Limited, Maharashtra State Electricity Transmission Company Limited,
 Power Grid Corporation of India Limited, Gujarat Power Corporation
 Limited, Uttar Pradesh Power Corporation Limited, Dakshinanchal Vidyut
 Vitran Nigam Limited, Paschimanchal Vidyut Vitran Nigam Limited,
 Poorvanchal Vidyut Vitran Nigam Limited, Madhyanchal Vidyut Vitran
 Nigam Limited, Dakshin Gujarat Vij Company Limited, Uttar Gujarat Vij
 Company Limited, Gas Suppliers and Transporters including Reliance
 Industries Limited, Indian Oil Corporation Limited, GAIL (India)
 Limited, Reliance Gas Transportation Infrastructure Limited, Gujarat
 State Petronet Limited and Petronet LNG Limited, Coal Suppliers
 including South Eastern Coalfields Limited, Siemens India Limited and
 Siemens AG, Financial Institutions and Banks including Bank of Baroda,
 Canara Bank, HDFC Bank, IDBI Bank, Infrastructure Development Finance
 Company Limited, Life Insurance Corporation of India, KfW-Germany,
 Power Finance Corporation, Punjab National Bank, State Bank of India
 and UCO Bank. The Board recognizes the contribution of the esteemed
 consumers in the growth of the Company and takes this opportunity to
 pledge the Companys commitment to serve them better. The Board would
 also like to express its sincere appreciation for the commitment and
 contribution of all its employees. The Company also thanks its
 shareholders for their unstinted support.
 
                           For and on behalf of the Board of Directors
 
 Ahmedabad                                                Sudhir Mehta
 
 4th May, 2011                                                Chairman