Your Directors have pleasure in presenting the Eighteenth Annual Report (BoardsReport) together with the Audited Financial Statements of the Company (Company or TDPS)for the financial year ended March 31 2017.
| ||For the year ended March 31 2017 ||For the year ended March 31 2016 |
| ||(Rs. in Lakhs) ||(Rs. in Lakhs) |
|Revenue from operations & other Income ||38738.07 ||47436.15 |
|Operating Profit (EBITDA) ||3247.46 ||5011.73 |
|Finance cost ||406.17 ||481.45 |
|Depreciation & amortization ||2772.21 ||2837.62 |
|Profit before Tax (PBT) ||69.08 ||1692.66 |
|Tax expense ||60.18 ||194.78 |
|Profit after Tax (PAT) ||8.90 ||1497.88 |
|Add: Surplus brought forward from the Previous Year ||21066.62 ||20911.63 |
|Available for appropriation ||- ||22409.51 |
|Appropriations || || |
|Provision for Dividends and Tax thereon ||- ||1220.12 |
|Transfer to General Reserves ||- ||122.77 |
|Surplus carried to Balance Sheet ||21075.52 ||21066.62 |
Note: The above figures are extracted from the standalone financial statement of thecompany
During fiscal 2017 the company continued to experience challenging circumstances - anuncertain global environment sluggish domestic market scenario and severe competitionboth in the domestic & overseas markets. These challenges contributed to a lower totalincome of Rs. 38738.07 lakhs in Fiscal 2017 (lower by 18.34%) as compared toFiscal 2016. Net sales from manufacturing business was Rs. 30912.57 lakhs compared to Rs.35925.91 lakhs in Fiscal 2016 contributing 79.80% of our Total Income in Fiscal 2017. Netsales from our Project Business was Rs. 6031.46 lakhs compared to Rs. 9609.10Lakhs in Fiscal 2016 contributing 15.57% our Total Income in Fiscal 2017.
Exports and deemed exports contributed 67% of manufacturing Revenue in Fiscal 2017 ascompared to 56% in Fiscal 2016 reflecting our continuing focus on growing our overseasmarkets. Your company continues to add new customers in steam gas turbine hydro &diesel segments in different parts of the world with a growing footprint of generatorinstallations in over 80 countries worldwide .
Earnings Before interest tax depreciation & amortization (EBITDA) decreased by Rs1764.27 lakhs or 35.20% to Rs. 3247.46 Lakhs in Fiscal 2017 as compared to Rs.5011.73 Lakhs in Fiscal 2016. Profit before tax and extraordinary items decreased by Rs.1623.58 Lakhs or 95.92% to Rs. 69.08 Lakhs in Fiscal 2017 from Rs. 1692.66 Lakhsin Fiscal 2016 mainly due to reduced sales volumes. Profit after tax decreased by Rs.1488.98 Lakhs or 99.41% to Rs. 8.90 Lakhs in Fiscal 2017 from Rs. 1497.88 Lakhs inFiscal 2016.
The pending orders as of March 31 2017 are Rs. 35405.45 lakhs comprising of bothmanufacturing (Rs. 29696.22 lakhs) and project business (Rs. 5709.23 lakhs).
The net worth of the Company stands at Rs. 49414.79 lakhs with the accretion of Rs.8.9 lakhs to total reserves during the year.
No material changes & commitments affecting the financial position of the Companyhave occurred between the end of the financial year of the Company to which thesefinancial statements relate and the date of this report.
In view of the reduced turnover and profits the Directors have recommended a lowerdividend of Rs. 1.80 per equity share for the year ended March 31 2017 as against Rs.3.05 per equity share for the year ended March 31 2016. This Dividend is subject toapproval of the shareholders at the forthcoming Annual General Meeting (AGM). Thedividends will entail a payout of Rs. 720.07 lakhs including dividend distribution tax ofRs. 121.80 lakhs.
Particulars of contracts or arrangements made with related parties.
Particulars of contract or arrangement made with related parties referred to in Section188 (1) of the Companies Act 2013 in the prescribed Form AOC -2 is appended as Annexure3 to the Boards report.
Management Discussion & Analysis
Pursuant to Regulation 34 read with Schedule V of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (hereinafter called as LODR / ListingRegulations) with the Stock Exchanges the Management Discussion & Analysis reportcovering operations performance & outlook of the Company is annexed as Annexure 9 tothe Boards Report.
Corporate Governance Report
In terms of Regulation 34 read with Schedule V of LODR a Report on CorporateGovernance along with Compliance Certificate issued by Practicing Company Secretary isattached as Annexure 10 and forms an integral part of this Report (hereinafter referred toas "Corporate Governance Report").
Note on Board evaluation Board Diversity Policy Training of independent directors -familiarization of directors Whistle Blower policy / Vigil mechanism Nomination andRemuneration policy form part of the Corporate Governance report.
Declaration by Independent Director
The Company has received necessary declaration from Independent Director under Section149 (7) of the Companies Act 2013 that he/she met the criteria of independence laid downin section 149 (6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligation and Disclosure requirements) Regulations 2015 (LODR).
Policy on Directors appointment and remuneration
The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the board and separate its functions of governance andmanagement.
The policy of the Company on directors appointment and remuneration includingcriteria for determining qualifications positive attributes independence of directorsand other matters as required under Section 178 (3) of the Companies Act 2013 isavailable on the Companys website www.tdps.co.in. There has been no change in thepolicy since the last fiscal year. We affirm that remuneration paid to the directors isas per the terms laid out in the Nomination and Remuneration policy of the Company.
Details of Policy on directors appointment and remuneration form part of theCorporate Governance report - Annexure 10.
As on March 31 2017 the Company has four (4) wholly owned subsidiaries - DF PowerSystems Private Limited (an Indian Subsidiary) TD Power Systems (USA) Inc. in the UnitedStates of America TD Power Systems Japan Limited in Japan and TD Power Systems EuropeGmbH in Germany.
During the year the Board of Directors reviewed the affairs of the subsidiaries. Inaccordance with Section 129(3) of the Companies Act 2013 read with Rule 8 of Companies(Accounts) Rules 2014 the Company has prepared its consolidated financial statementincluding all the said Subsidiaries which is forming part of this Report. Further astatement containing the salient features of the financial statement of the saidsubsidiaries in Form AOC-1 is appended as Annexure 2 to the Boards Report.
In accordance with Section 136 of the Companies Act 2013 the audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on our websitewww.tdps.co.in. These documents will also be available for inspection during businesshours at our registered office in Bengaluru India.
A review of the operations of the subsidiaries is as follows:
During the year ended March 31 2017 the Wholly Owned Subsidiary (WOS) DF PowerSystems Private Limited completed the residual activities in respect of completed projectsand has fulfilled all warranty obligations in respect of EPC contracts undertaken by it.For the year ended March 31 2017 the WOS incurred a loss of Rs. 107.80 lakhs on a totalrevenue of Rs. 297.37 lakhs mainly due to fall in revenues consequent on scaling down ofbusiness.
The operations of this subsidiary have been revived during the second half of the yearbased on certain market opportunities which are promising. The Marketing team has beenstrengthened to meet market requirements which resulted in growing enquiry pipelineresulting in orders during the year. The operations of this Company during the year underreport have resulted in revenue of Rs. 1887.17 lakhs as compared to Rs 451.28 lacsin Fiscal 2016-an increase of about 318% over Fiscal 2016. This increased revenue hasenabled the Company to reduce operating losses to Rs. 70.59 lakhs as compared to Rs 337.75lacs in fiscal 2016 a decrease of 79%.
Major activities of this subsidiary are now conducted through the Companys Branchoffice at Japan. Accordingly the revenues for Fiscal 2017 has reduced to Rs. 932.28 lakhsas compared to Rs 2871.55 lacs In Fiscal 2016 with profit before tax of Rs. 22.06 lacs inFiscal 2017 as compared to a loss of Rs 19.23 lacs in Fiscal 2016.
Certain orders were executed in steam & Hydro segment during the Fiscal 2017resulting in a revenue of Rs. 167.77 lakhs as compared to Rs 1.19 lacs in fiscal 2016. Theloss for the Fiscal 2017 is Rs. 282.83 lakhs mainly due to fixed overheads.
The market in Europe is mainly in the hydro segment from European customers. The Steamgenerators market is improving gradually. TDPS Europe has is enhanced our market outreachin Europe improving access to European customers with potential to grow our orderpipeline.
Internal Financial Control
The Company has designed and implemented a process driven framework for InternalFinancial Controls ("IFC") within the meaning of the explanation to Section134(5)(e) of the Companies Act 2013. For the year ended March 31 2017 the Board is ofthe opinion that the Company has sound IFC commensurate with the nature and size of itsbusiness operations and operating effectively and no material weakness exists. The Companyhas a process in place to continuously monitor the same and identify gaps if any andimplement new and/or improved controls wherever the effect of such gaps would have amaterial effect on the Companys operations.
Directors Responsibility Statement
Pursuant to clause (c) of sub section (3) of section 134 of the Companies Act 2013with respect to the Directors Responsibility Statement it is hereby confirmed that
a. In the preparation of the annual accounts for the financial year ended March31 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures;
b. The directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at theend of the financial year and of the profit and loss of the Company for thatperiod;
c. The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and otherirregularities;
d. The directors have prepared the annual accounts on a going concern basis;
e. The directors have laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and were operatingeffectively; and
f. The directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
Board of Directors & Key Managerial Personnel
Board of Directors ("The Board")
As per the provisions of the Companies Act 2013 Mr. Mohib N Khericha retiresat the ensuing Annual General Meeting and being eligible seeks re-appointment. The Boardrecommends his re-appointment.
Mr. K G Prabhakar (DIN 07187463) who was appointed as whole time Director of thecompany for a term of three years up to June 28 2018 is proposed to be reappointed for afurther term of 3 years subject to approval of the shareholders of the Company atthe ensuing AGM of the company.
A brief resume and other details of Mr. Mohib N Khericha and Mr. K G Prabhakar asrequired under the Listing Regulations Companies Act 2013 and Secretarial Standard areprovided form part of Corporate Governance Report/ Notice of 18th AGM.
Key Managerial personnel
The services of Mr. N Srivatsa as Company Secretary and Compliance Officer has beenextended for 4 years with effect from February 19 2017. Consequent to the re appointmentof Mr. N Srivatsa as Company Secretary and Compliance Officer he has been appointed asKey Managerial Personnel (KMP) pursuant to the provisions of Section 203 of the CompaniesAct 2013 and Rules thereunder effective February 19 2017 for 4 years.
Mr. Nikhil Kumar Managing Director Mr. K. G. Prabhakar Chief Financial Officer andMr. N. Srivatsa Company Secretary are Key Managerial Personnel of the Company as per theprovisions of the Companies Act 2013 and Rules thereunder.
Risk Management Policy
Pursuant to Section 134 (n) of the Companies Act 2013 and Regulation 21 of SEBI(Listing Obligations and Disclosure
Requirements) Regulations 2015 a Risk Management committee of the Board of directorsof the Company has been constituted. The details of the committee and its terms ofreference are set out in the corporate governance report forming part of this report.While the Company has identified certain major risks and initiated appropriate measures tomitigate the said risks a process to enhance the risk management framework is underway.
The Auditors report for the fiscal 2017 does not contain anyqualification reservation or adverse remark. The Auditors Report is enclosedwith the financial statements in this Annual Report.
The Secretarial Auditors report for the fiscal 2017 does notcontain any qualification reservation or adverse remark. The SecretarialAuditors Report is enclosed Annexure 8 to the Board Report in this AnnualReport.
As provided in the Listing Regulations/LODR the certificate on corporategovernance is enclosed to the Boards report. The said report does not containany qualification reservation or adverse remark.
The current statutory Auditors BK Ramadhyani & Co. LLP Chartered Accountantsretire at the ensuing AGM & are not eligible for reappointment due to mandatoryrotation in terms of Section 139 of Companies Act 2013. Accordingly the audit committeeof the board has recommended the appointment of M/s. Varma & Varma CharteredAccountants Bangalore (Firm Registration No. 004532S) (Varma and Varma) as the statutoryauditors of the company for a period of five consecutive years from the conclusion of theEighteen Annual General Meeting of the company till the conclusion of 23rd Annual GeneralMeeting subject to the approval of the shareholders of the company.
As required under Section 204 of the Companies Act 2013 and Rules thereunder theBoard has appointed Mr. Sudhir V Hulyalkar Practicing Company Secretary Bangalore asthe Secretarial Auditor for the fiscal 2017.
In terms of Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 M/s. Rao Murthy & Associates CostAccountants Bangalore have appointed as Cost Auditors of the Company for the FinancialYear 2017-18.
Extract of the Annual Return
In accordance with Section 134(3) (a) of the Companies Act 2013 an extract of theAnnual Return in the prescribed format is appended as Annexure 1 to the BoardsReport.
Number of Board Meetings
The Board met four times during the Fiscal 2016-17. The details of which are given inthe Corporate Governance report that forms part of this Annual Report. The maximum gapbetween any two meetings did not exceed 120 days as prescribed by the Companies Act2013.
Conservation of Energy Research and Development Technology Absorption ForeignExchange Earnings and Outgo
Information required under Section 134(3) (m) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules2014 for the financial year ended 31st March 2017 inrelation to the Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo is given in the Annexure 4 forming an integral part of this Report.
Particulars of Loans Guarantees or Investments
Loans guarantees and investments covered under Section 186 of the Companies Act 2013also form part of the notes to the financial statements provided in this Annual Report:-
|Nature of Transaction ||Date of Board Resolution/ Date of Transaction ||Name of the person to whom it is made ||Amount |
|Loan ||06/08/2015/ ||TD Power Systems ||USD |
| ||05/12/2016 ||(USA) Inc. ||100 000 |
|Investment ||03/02/2016 / ||TD Power Systems ||Euro |
| ||02/08/2016 ||Europe GmbH ||75000 |
|Investment ||03/02/2016 / ||TD Power Systems ||Euro |
| ||03/02/2017 ||Europe GmbH ||100000 |
Your Company has formulated a policy on related party transactions which is alsoavailable on Companys website at www.tdps.co.in. Particulars of contracts orarrangements with related parties referred to in Section 188(1) of the Companies Act2013 in the prescribed Form AOC-2 is appended as Annexure 3 the Boards Report.
Particulars of employees
The ratio of the remuneration of each whole- time Director and Key Managerial Personnel(KMP) to the median of employees remuneration as per section in accordance with theprovisions of Section 197(12) of the Companies Act 2013 read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is appendedas Annexure 5 to the Boards Report.
Additionally the following details form part of Annexure 6 to the Boards report.
Details of employees in receipt of a remuneration of Rs. 1.02 crore ormore per year
Statement containing the name of top 10 employees in terms ofremuneration drawn
None of the employees is in receipt of a remuneration of Rs. 8.5 lakhs or more amonth for part of the year. None of the employees employed throughout the financial yearor part thereof was in receipt of remuneration in that year which in the aggregate oras the case may be at a rate which in the aggregate is in excess of that drawn by themanaging director or whole-time director or manager and holds by himself or along with hisspouse and dependent children not less than two percent of the equity shares of thecompany.
Committees of the Board
As on March 31 2017 the Board had four Committees: the Audit committee theNomination and Remuneration committee the Stakeholders Relationship committee and theCorporate Social Responsibility Committee. The detailed note on composition of the Boardand its committees excluding Corporate Social Responsibility Committee is disclosed in theReport on Corporate Governance forming part of this report.
Corporate Social Responsibility Committee
In accordance with the requirements of Section 135 of Companies Act 2013 your Companyhas a Corporate Social Responsibility Committee which comprises Mr. Ravi KanthMantha Chairman Mr. Nitin Bagamane and Mr. Nikhil Kumar as members of theCommittee. The terms of reference of the Corporate Social Responsibility Committee isprovided in the Corporate Governance Report. Your Companys Corporate SocialResponsibility Policy (CSR Policy) is available on the website of the Company atwww.tdps.co.in. Annual report on CSR activities as required under the Companies(Corporate Social Responsibility Policy) Rules 2014 has been appended as Annexure 7 andforms an integral part of this Report.
Your Directors state as follows
1. No significant or material orders were passed by the Regulators or Courts orTribunals impacting the going concern status and Companys operations infuture.
2. There was no issue of equity shares with differential rights as to votingdividend or otherwise.
3. There was no issue of shares including as sweat equity shares or employeestock options.
4. There were no deposits covered under Chapter V of the Companies Act 2013.
5. No money has been provided by the company for purchase of its own shares byemployees or by trustees for the benefit of employees.
6. No subsidiaries have paid remuneration to Managing Director
7. The Company has in place an Anti-Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up toredress complaints received regarding sexual harassment. During the yearunder review there were no cases filed pursuant to the Sexual Harassment of Womenat the Workplace (Prevention Prohibition & Redressal) Act 2013.
Electronic copies of the Annual Report 2016-17 and the Notice of the 18th AnnualGeneral Meeting are sent to all members whose email addresses are registered with theCompany/Depository Participants. For members who have not registered their emailaddresses physical copies are sent in the permitted mode.
Your Directors place on record their appreciation of the contribution and support ofthe employees at all levels. They also place on record their appreciation of the continuedsupport and faith extended during the year by the Companys customers suppliersbankers and shareholders.
| ||For and on behalf of the Board of Directors |
|Bangalore ||Mohib N. Khericha |
|May 18 2017 ||Chairman |