TPL 2019-2020 - Directors Report - 2 (new Addings)

CONSOLIDATED FINANCIAL STATEMENTSIn compliance with the provisions of Section 129(3) and other applicable provisions of the Act and the IndianAccounting Standards Ind AS-110 and other applicable Accounting Standards, the consolidated financialstatements for the financial year ended March 31, 2020 are attached, which forms part of the annual report.BUSINESS PROFILEThe Company broadly has two segments of operations, viz.,‘EPC Projects’ and ‘Services’.The EPC works are handled bythree ‘Strategic Business Groups’ (SBG), further divided into two ‘Strategic Business Units’ (SBU) each. The ServicesBusiness also has two SBUs.Thus,1.SBG – Industrial Systems with two SBUs: Plant & Systems and Construction & Environment2.SBG – Core Infra with two SBUs: Transmission & Distribution and Transportation3.SBG – Urban Infra with two SBUs: Heavy Civil Infra and Urban Built Form4.SBG – Services with two SBUs: Quality Services and Utility Services.Description about each segment of business activity is given in Annexure -I.DIRECTORS RESPONSIBILITY STATEMENTPursuant to the provisions of Section 134(5) of the Companies Act, 2013, your directors, to the best of theirknowledge and ability, confirm as under:a)in the preparation of the annual accounts for the FY 2019-20, the applicable accounting standards had beenfollowed along with proper explanation relating to material departures;b) the directors had selected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the companyat the end of the financial year and of the profit and loss of the company for that period;c)the directors had taken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of this Act for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities;d) the directors had prepared the annual accounts on a going concern basis; ande)the directors had laid down internal financial controls to be followed by the company and that such internalfinancial controls are adequate and were operating effectively.f)the directors had devised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and operating effectively.DIRECTORSDuring the FY 2019-20, Mr. Sanjay Kumar Banga (DIN:07785948) was appointed as additional, non-executive,non-independent director with effect from December 1, 2019. Ms. Neera Saggi (DIN:00501029), IndependentDirector was reappointed for a term of three years with effect from December 5, 2019. Mr. Bobby Pauly(DIN: 06629688) was appointed as additional, non-executive, non-independent director with effect fromFebruary 12, 2020. Further, the NRC and Board appointed Mr. Vinayak K Deshpande as Managing Director foranother term effective from July 1, 2020 to July 21, 2022. Resolutions seeking shareholders’ approval for theirrespective appointments form part of the AGM Notice.Mr. Minesh Srikrishna Dave vacated his office as director with effect from November 30, 2019 as he superannuatedfrom his services in The Tata Power Company Ltd. Mr. Padmanabha Sinha vacated his office as director with effectfrom February 12, 2020, consequent to his resignation as Managing Partner of Tata Opportunities Fund.Pursuant to the provisions of Section 149 (6) of the Act along with Rules framed thereunder, the independentdirectors have submitted declarations that each of them meet the criteria of independence. There has been nochange in the circumstances affecting their status as independent directors of the Company.During the year under review, the non-executive directors of the Company had no pecuniary relationship ortransactions with the Company other than sitting fee and commission out of profits of the Company. The sitting feeand commission payable to investor representative directors (i.e. Mr. Padmanabh Sinha and Mr. Bobby Pauly) is paidto Omega TC Holdings Pte. Ltd. No sitting fee is payable to the directors representing The Tata Power Company Ltd.as per the decision of that Company. Further, as per Group Guidelines, no commission is payable to directors7

41st Annual Report 2019-2020(Mr. Banmali Agrawala, Mr. Nipun Aggarwal, Mr. Ramesh N Subramanyam and Mr. Sanjay Kumar Banga) who are in fulltime employment of any of the Tata Group companies.Pursuant to section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2020 are:Mr. Vinayak Kashinath Deshpande, Managing Director, Mr. Arvind Chokhany, Chief Financial Officer andMr. B.S. Bhaskar, Company Secretary.MEETINGS OF BOARD OF DIRECTORS AND COMMITTEESThe details of Meetings held during the FY 2019-20 are as given below:Meetings ofDates of MeetingsBoard of DirectorsMay 16, August 20, November 15, 2019 and February 12, 2020 (FourMeetings)Audit CommitteeApril 10, May 6, May 16, June 21, August 6, August 20, September 20,November 4, November 15, December 18, 2019, January 31 andFebruary 11, 2020 (Twelve Meetings)Nomination and RemunerationApril 11, May 16, August 19, November 15, 2019, February 11 andMarch 4, 2020 (Six Meetings)Project ReviewApril 25, June 14, July 18, August 20, September 20, October 17,November 15, December 18, 2019, January 31 and March 13, 2020(Ten Meetings)COMPLIANCE WITH SECRETARIAL STANDARDSThe Company has complied with applicable provisions of the Secretarial Standards issued by the Institute ofCompany Secretaries of India and approved by the Central Government under Section 118(10) of the CompaniesAct, 2013.STATUTORY AUDITORSAt the 38th AGM held on June 23, 2017, the Members approved appointment of M/s. Price Waterhouse & Co.,Chartered Accountants, LLP, Hyderabad (Firm Regd. No. 304026E / E-300009) as Statutory Auditors of the Companyto hold office for a period of five years from the conclusion of the 38th AGM till the conclusion of the 43rd AGM, subjectto ratification of their appointment by Members at every AGM. Such requirement for ratification of appointment ofstatutory auditor at every AGM has been done away with by the Companies (Amendment) Act, 2017 with effect fromMay 7, 2018. Accordingly, no resolution is being proposed for ratification of appointment of statutory auditors at theensuing 41st AGM.SECRETARIAL AUDITORAs per the provisions of Section 204 of the Act, the Company appointed M/s. Shalini Deendayal & Co., PracticingCompany Secretaries to conduct secretarial audit of the records and documents of the Company for the FY 2019-20.COST AUDITORIn compliance with the provisions of Section 148 of the Act, the Board of Directors of the Company at its meetingheld on May 14, 2020 appointed M/s Nageswara Rao & Co, Cost Accountants (Firm Regd. No.: 000332) as CostAuditors of the Company for the FY 2020-21. In terms of the provisions of Section 148(3) of the Companies Act, 2013read with Rule 14(a)(ii) of the Companies (Audit and Auditors) Rules, 2014, the remuneration of the Cost Auditors hasto be ratified by the Members. Accordingly, necessary resolution is proposed at the ensuing AGM for ratification ofthe remuneration payable to the Cost Auditors for the FY 2020-21.AUDITOR’S REPORT AND SECRETARIAL AUDITOR’S REPORTThe statutory auditor’s report and the secretarial audit report do not contain any qualifications, reservations oradverse remarks or disclaimer.There has been no instances of fraud reported by the Auditors under Section 143(2) ofthe Act and the Rules framed thereunder either to the Company or to the Central Government. The Secretarial AuditReport in Form No.: MR-3 is attached to this Report as Annexure - II.8

CHANGE IN NATURE OF BUSINESSThere is no change in the nature of business carried on by the Company during the year under review.MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYThere are no material changes and commitments affecting the financial position of the Company, which occurredbetween the end of the financial year to which the financial statements relate and the date of this Report, exceptthose reported under“Measures taken during Covid -19 Lockdown Period”ENABLING SERVICESHUMAN RESOURCESHuman Capital is our key driver to growth and success. HR function has been playing an important role inattracting high quality talent, developing high potential employees, implementing employee friendly andprogressive policies, employee engagement and capability development for building future ready organization.HR function co-creates annual HR Strategy along with the leadership team to align business objectives withtalent related practices.The HR function is equipped to respond to varied HR needs of the businesses and collaboratewith employees to enable them to have a sustainable competitive advantage as detailed in Annexure – VI.SUPPLY CHAIN MANAGEMENT (SCM)It is the constant endeavor of the SCM Team to minimize procurement cost, to optimize value by identifyingreliable and large turn-over sub-contractors / suppliers, to have an effective credit worthy vendor mix, to avoidmonopolistic situations etc. In our effort towards making environmentally safer procurement, preference is given togreen vendors as detailed in Annexure – VII.CORPORATE SHARED SERVICESINFORMATION TECHNOLOGY (IT)ERP enhancements continued throughout the year across Projects, Supply Chain Management (SCM) and Financefunctions namely Purchase Approval Note, Integration to Vendor & Material Master systems, AP Invoicingintegration, Customer BBU and Billing & MIS. Detailed information is provided in Annexure – VIII.FINANCEYour Company’s Long-Term Credit rating has been affirmed at IND AA (Stable). During the current financialyear, your Company raised Rs. 1,000 crore from the Debt Capital Market by issuing listed unsecured non-convertibledebentures. The Finance Centre of Excellence (CoE), setup in September 2018, is functioning well and hascentralised all vendor bill processing and payment activities for the entire company by being a vital partnerin the accounting process. Your company has a robust Project Cost Management process that providesguidance and direction on how costs are managed from project initiation (Tendering) to execution through arigorous Control Budget (CB) and Cost to Complete (CTC) mechanism that are deeply entrenched in thesystem with a proper quarterly opera

During the year, order booking of your company aggregated to Rs.12,944 crore (previous year: Rs.28,190 crore) resulting in the total order backlog of Rs.53,194 crore. Secured L1 position of orders worth Rs.6,442 crore. Total income of your company aggregated to Rs.10,514 crore (previo